Data-centric industries such as financial services, healthcare, and certain government departments employ dedicated teams of data scientists who report to Chief Data Officers (CDO) and CAOs. Though the creation of a separate CAO position is only now picking up pace, the role in itself is not entirely new. Many companies who have been pioneers in the field of decision sciences and analytics, have had senior management executives for data and analytics. But traditionally, these roles folded into Strategy or Marketing. Integrating data and / or analytics responsibilities into a separate team with a corporate level manager is a direct result of the increasing focus on assimilation of data and analytics across business units.


So, what conditions led to the need for a CAO? Primarily, two:

  • The data revolution forced businesses to ask the question, ‘How can I get all my data in place?’ With the advent of Big Data, companies began asking, ‘What can I do with all my data?’ Most of these companies have built sound infrastructure for capturing data from various channels. Now the focus is on gleaning insights from this data, and making it actionable.
  • Companies are investing heavily into developing predictive and optimization models, and complex rule-based decision engines. All these moves are aimed at migrating from a reactive approach to business to a proactive view, driven by sound analytics.

The Utility of a CAO

A dedicated CAO can ensure effective ROI of data and analytics investments across different business functions, consistently measure the impact of analytics, and champion the cause for innovative analytics opportunities.

Skeptics point to the fact that creating a new C-level role may not be impactful. After all, analytics needs to be treated as central to the overall strategy, and hence should be a priority across the C-suite and not limited to one executive and team.

But in my view, whether as a C-level function or as a federated role, the importance of using analytics to drive decision making cannot be ignored. Many experts agree that the CAO’s role may eventually be folded into Strategy or Marketing. But for the foreseeable future, having a CAO to harness data and analytics capabilities is a step in the right direction.

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