Who's Responsible for Analytics?
You're convinced that you need to ante up and enhance your enterprise analytics capabilities. It's a worthy cause to be sure, but now you need to decide who's responsible for the effort, and that is a vexing question.
At first, the answer seems pretty clear: Analytics uses data, data is controlled by IT people, so IT should bear the responsibility for all analytics. But if you reflect on that simple argument, you'll come to think it may not be so well-founded. This column presents two arguments: one for the chief data officer to control the analytics effort, and another for the CFO to do so instead. As you'll see, there is no "right" answer. Which one you choose will depend on your perspective and on the way your company does business.
Let's consider the CDO argument first, because it seems the most straightforward. The CDO position is relatively new - in fact, many companies have no chief data officer yet - but it is rapidly becoming a position of power. CDOs are responsible for crafting and implementing data strategies, standards, procedures and accountability policies at the enterprise level. They champion data as a strategic business asset and driver of revenue. Basically, the CDO is responsible for data accountability.
Because of that accountability, it seems sensible that CDOs should spearhead the organization's analytics efforts. After all, the person responsible for data quality would be in the best position to make sure that data is exploited for maximum effectiveness and ROI. Putting the CDO in charge of analytics can also be a savvy political move. CDOs typically possess a balance of technical skills, business knowledge and people skills to help them smoothly navigate both technical and political minefields. They can run interference between the competing worlds of business and IT. That's a powerful argument for giving the CDO control over the organization's analytics efforts. But, is it enough?
Data courses through every business function, and, surely, without quality data delivered when and where it's needed, a company cannot function effectively. The function of any analytics effort is to deliver the right data to the right people at the right time, so it can be used to gain actionable insight and facilitate better decision-making, thereby driving greater market share and revenue.
Because of the ubiquity of corporate data and the importance of analytics in decision-making, responsibility for the organization's analytics effort should lie with someone other than the CDO. The next question is to consider where that responsibility should rest, and we might begin by looking at the overhang of financial risk.
Any CEO will tell you that compliance risk management is often their biggest headache. The regulatory environment is constantly changing. Companies need volumes of data to keep up with stringent reporting requirements in order to manage risk effectively. That data must be fed through powerful analytics engines to understand where risks lie and how to mitigate them, all while maintaining profitability and market share.
Typically, responsibility for compliance rests with the CFO, or a combination of the CFO/CIO. So, from a compliance perspective, it would make sense that the CFO should have ownership in the corporate analytics effort.
A second argument can be made for CFO control of analytics: Most data for analytics purposes is either created or used by the finance function. Even sales and marketing data is used by finance in planning and analysis. Because finance uses most of the data in the enterprise, it makes sense that the CFO should be responsible for analytics.
It's a stretch to take responsibility for analytics away from IT altogether, but in many companies, the CFO and CIO work together to ensure that the corporate data and infrastructure meet the needs of the business. Also, the CIO may not be sufficiently versed in the needs of the business to bear sole responsibility for the analytics effort. Finally, many companies don't have a CDO to entrust with the responsibility for analytics. Absent a CDO, the CFO is the logical choice.
I've perfectly straddled both sides of the argument here, but I don't believe that there's one right answer for all companies. I tend to lean toward CFO control, but as the CDO position becomes more pervasive, perhaps the CDO function is really the ultimate home for analytics. Only time will tell. For now, it's up to each organization to decide best for itself. Just make sure that you think it through and weigh all the alternatives. Analytics - and your company's mastery of it - can make or break you.
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