by Minda Zetlin, Thor Olavsrud

What is a chief analytics officer? The exec who turns data into decisions

Feb 02, 202110 mins
IT Leadership

A chief analytics officer leads an organization's data analytics strategy, driving data-related business changes in an effort to transform your company into a more analytics-driven one.

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The chief analytics officer (CAO) is a senior-level executive that heads up a company’s data analytics operations, transforming data into business value, and drives data-related business change. The chief analytics officer often reports to the CEO.

Chief analytics officer role

The chief analytics officer oversees an organization’s collection of data and its use to create analytics and business intelligence models. The CAO works closely with the CIO to establish the infrastructure required for analytics. The CAO may also be responsible for the creation of data warehouses, formula data governance and management frameworks, and reporting and visualization tools.

Chief analytics officer responsibilities

Key chief analytics officer responsibilities include:

  • The chief analytics officer oversees the analytics function, including data analytics and data science. The role sets strategic priorities for the function and identifies new business opportunities based on data.
  • Collaborating with the C-suite. Driving business transformation with data insights requires close collaboration with the business and IT to understand needs, generate business value, and communicate results.
  • Building analytics capabilities. The chief analytics officer is responsible for defining and driving analytics and business intelligence initiatives. This often includes assessing the current state of data and analytics capabilities, developing an analytics strategy, working with the IT function to develop data infrastructure, and creating and executing a product development roadmap.

Naming a chief analytics officer sends a powerful signal to the entire organization about the importance of data analytics. Chris Mazzei had been at consulting giant EY for almost 20 years before becoming the company’s first chief analytics officer in 2014.

“EY was in the process of launching a new global strategy,” he says. “We had a new chair and a new CEO. It was more and more obvious to the leadership team how important data and analytics were going to be to the future and also how they were already starting to affect all our existing businesses.”

At the time, he says, many of EY’s business leaders were using data in various ways, but “they weren’t joined up in a way we thought made sense,” he says. “We didn’t have a high degree of confidence that we could move as fast as we wanted to.” Although most analytics functions still take place within EY’s business units, Mazzei now leads a global team charged with providing analytics tools throughout EY and helping to accelerate the movement toward a more analytics-driven company.

Bringing analytics into decision-making will quickly prove its worth, he adds. For example, a private equity company that was planning to buy a consumer food business hired EY to perform due diligence before the deal was finalized. Because Mazzei and his team believe social media analysis can add valuable insights to that process, the company deployed two teams, one doing a traditional financial analysis, the other doing a social media analysis as well.

The social media analysis turned up a big problem. “We saw in a couple of categories there was starting to be increasingly negative sentiment around the taste of some products,” Mazzei says. “We dug into it a little, and it turned out they had a major quality issue at a couple of their plants. That led the private equity company not to do the deal, and we would never have found that in a traditional financial due diligence because it hadn’t worked its way into the financial results yet.”

Chief analytics officer vs. chief data officer

The chief analytics officer role is often viewed as interchangeable with that of the chief data officer. When surveying about the role, research firm Gartner makes no distinction between the chief analytics officer, chief data officer, and chief data and analytics officer roles.

“The word ‘analytics’ is misunderstood,” explains Andrew White, research vice president and distinguished analyst at Gartner. Different organizations mean different things by it, and some use phrases like “business intelligence” or “knowledge management” instead, he says. As a result, “the chief analytics officer can come from two places. Either the role is interchangeable with the chief data officer or else the company wants an analytic strategy function that provides reports to everyone. In some companies that’s a function of the chief data officer; in others it might be a separate body.” In the long run, he predicts, “the titles will all roll up into chief data officer.”

Others make the distinction that the chief data officer’s responsibility is managing data, a technology role, while the chief analytics officer’s responsibility is leading data analytics, a business role. Chief analytics officers often have a data science background, whereas chief data officers may not.

Some believe that, although managing data and leading data analysis are two different functions, they should both belong to the same person. “If you look at the evolution of the titles, most leaders in analytics and data want to own both the data strategy and also analytics,” says Guy Gomis, partner at the recruiting company BrainWorks. “Because of that interest and because it makes sense, most smart companies are combining the two functions into one.” But others argue that there’s a subtle but important difference between a chief data officer and a chief analytics officer, and that difference has to do with transforming data into measurable business benefits. “I think ‘analytics’ better describes the challenge to the organization than ‘data,’” says Colin Zima, chief analytics officer at data analytics platform Looker. “I prefer to be chief analytics officer rather than chief data officer,” he adds.

Whatever the position is called, NewVantage Partners has found that the role is still in its formative stages. In its 2020 NewVantage Partners Big Data and AI Executive Survey, the firm found that 72% of firms say the chief data officer/chief data and analytics officer function remains an unsettled role, and only 28% of respondents described it as successful and established. Additionally, NewVantage found that 49% of firms (up from 38% percent in 2019) are looking for outsiders to fill the role rather than promoting from within.

What to look for in a chief analytics officer

What’s the ideal background for a CAO? “If you peel it back and look at the work, generally speaking analytics and business intelligence is often performed by very different types of people than data science,” says Chris Galy, chief people officer at real estate marketplace Ten-X. “Analytics and business intelligence aggregate a bunch of data and try to make meaningful insights to forward a business or culture initiative inside a company. Data scientists are a much different breed of folks, thinking about architecture.”

“A chief data officer is most likely a technology person who’s been in data management and understands data quality and processes,” says Justin Cerilli, who heads the data and analytics practice for consultancy Russell Reynolds Associates. “They have tech backgrounds but aren’t deep data scientists. We’ve seen them come from big services companies like Accenture.” Analytics executives do have deep data science backgrounds, he says. “Some come from companies like McKinsey or Bain.”

But it’s a mistake to focus just on data’s “hard” skills, because mastering organizational dynamics and spreading the word about the benefits of data analytics may be the most important part of the job. “Often people in chief roles become stewards for organizational change and organizational adoption,” says Karen Crone, chief human resources officer at human capital management company Paycor. “It goes back to painting a picture and sharing a vision,” she says. “You’re taking ownership and accountability for the whole in a chief role. If I’m taking my own HR data to an analytics person and asking for help, or sales data for the sales leader and so on, that’s different from someone sitting at the top of the organization and understanding the interrelations of sales data and HR data. That’s the difference between service and evangelism.”

How to succeed as a chief analytics officer

EY has found that about two thirds of the companies that have made a big investment in data analytics have failed to see it pay off — “and a good part of that is leadership,” Mazzei says. “We have found that early in the lifecycle of having this role in place, organizations tended to focus disproportionately on the technical capabilities of the individual in that role.” Technology and data science skills are “necessary but insufficient,” he says.

“We found there are two or three key elements a person in this role needs. It’s an innovation role. They have to understand the business deeply and see in the business model of the company where there are opportunities to drive value and how they can help create competitive differentiation. And then they need to be a solution architect who can design something that can impact the business,” he says.

Not only that, Mazzei says, but the CAO must occupy the middle ground between business and technology teams. “They have to build really strong, productive relationships within the organization. That has tripped up many a CAO at our clients.”

Those relationships are vital because to add value, a CAO must be able to instill new ways of doing things throughout the organization. If a CAO is doing the job right, “You’re changing business processes,” he says. “You’re using a very different type of insight to help the business makes decisions.”

Chief analytics officer salary

According to jobs and recruiting site Glassdoor, the average chief analytics officer salary is $200,000 per year, with the upper range for salary at $375,000 annually.

Chief analytics officer jobs

A recent search for chief analytics officer jobs on LinkedIn showed positions available in a range of industries, including healthcare and financial services.

A sampling of chief analytics officer job descriptions shows key area of responsibilities such as: establishing a long-term vision for data and analytics; designing operational processes; leading and developing a core team of data scientists and project managers; collaborating with stakeholders to integrate data sets and develop data-informed strategies in service of stated goals; and developing analytics capabilities across the organization through technology implementation, best practices, and training.

Companies are looking for, for example, team leaders with management experience, excellent analytics skills paired with strong understanding of management priorities, vision for how data can be used to optimize services.

The article was originally published on Nov. 1, 2017.