If big data and analytics are the powerful business resource that I think they are, they need someone to champion and oversee their usage in organizations. The problem is that many organizations don’t really have someone in charge of these capabilities. There is in many companies a leadership vacuum for big data and analytics.
I have written previously about the rise of Chief Analytics Officers and related roles. These jobs are definitely popping up in some companies, but not often enough.
In fact, a recent Deloitte survey of 75 companies in which I participated suggests that responsibility for analytics within companies is all over the map.
I don’t think there is any right answer to the question of who should own the function. Every location and role has both strengths and weaknesses. But some reporting relationships are better than others.
“Business unit or division head,” the winner of this race in terms of frequency, is a somewhat problematic reporting location. If the analytical opportunities within a company are heavily concentrated within a single business unit or division, having the head of that unit own analytics may be logical. Otherwise it’s a suboptimal location, since it means that an enterprise-wide approach to analytics and big data will be unlikely.
CFO is the second most likely place for analytics to report. I actually think there is a strong logic for this, and I wish that more CFOs would step up and take over analytics groups. CFOs are obviously numbers-focused to begin with, and are used to reporting data. They have an enterprise-level mandate. CFOs need to take more of a focus on what underlying factors drive financial performance, and if they owned an analytics group they’d be more likely to adopt it.
The downside of CFO ownership of analytics is perhaps that analytics within organizations would be too financially-focused. Most analytical applications should have a financial payoff, of course, but sometimes a little faith is necessary. Another concern would be too much emphasis on reporting, rather than predictive or prescriptive analytics.
CIOs are the third most likely group to lead analytics. I have no problems with this as long as the IT organization is well-respected, highly engaged with the business, and very knowledgeable about analytics and big data. There are some CIOs, like Filippo Passerini of Procter & Gamble, who have ensured that all three criteria are present—in spades in P&G’s case. Of course, these things are not always true of CIOs and IT. I get lots of complaints about IT organizations not making the data available fast enough, or that they are applying overly burdensome standards and governance approaches to data. And many CIOs confuse providing information and insight with providing technology. There are also some benefits to CIOs being in charge of IT. Like CFOs, CIOs manage an enterprise-wide function—a good thing for leading analytics—and they are clearly knowledgeable about the role of technology itself in big data and analytics.
9% of the organizations surveyed by Deloitte say that analytics reports to the CEO. On the surface, this sounds great. Who wouldn’t want to report to the CEO? No one else can marshal the resources to make analytics successful, and no one else would know better how to make analytics fit the business strategy. But there probably is a downside lurking behind this reporting relationship. I am guessing that in these organizations, the CEO has plenty of other things to do besides deal with analytics and big data. Perhaps in these firms big data doesn’t get the attention and time it deserves. Reporting to the CEO may mean that analytics doesn’t really get leadership from anywhere.
Chief Marketing Officers and “Other C-Suite Executives” together comprise 10% of analytics leaders. Again, that’s fine if a single business function—marketing or supply chain or whatever—drives analytics almost exclusively in your company. Otherwise, if you’re outside of the purview of a functional executive leading analytics, you may not feel that you’re getting the analytical attention you need.
Only 4% of companies had a “Chief Analytics Officer or equivalent” leading analytics, but let me put in another plea for this type of role. If you’re doing anything else in addition to managing analytics and big data, you’re going to be giving this transformational capability short shrift. It would be great if every company thought analytics and big data were so important that they needed to establish a C-level role for it. Someday perhaps this will be the case. But in the meantime, think carefully about the pros and cons of giving analytics to some other senior role in your organization.