Time has come for chief analytics officers

Enterprises looking to enable pervasive data analytics should consider a company-wide CAO-led organization

LAS VEGAS -- Companies seeking to enable enterprise-wide data analytics need a chief analytics officer (CAO) to lead the way, analysts say.

The explosive growth in corporate data over the past few years has created both an opportunity and a challenge for enterprises, they noted at the SAS Analytics 2012 conference here this week.

Extracting business value from the data can offer tremendous benefits to companies. But figuring out how to do that task across an enterprise is a huge challenge, analysts said.

Typically, data analytics teams have focused on departmental data and have mostly not been set up to support decision making across the enterprise, said Will Hakes, co-founder of Link Analytics, an Atlanta-based consulting firm.

The teams today are often organized by business function, residing in marketing, finance or another corporate group, he said. Typically, the departmental analytic groups have reported to the chief marketing officer or chief financial officer.

Moving forward, companies that are serious about analytics should consider creating a central organization responsible for articulating and implementing a company-wide plan for extracting value form corporate data, Hakes said.

"Firms need a big data analytics charter," Hakes said. "The chief analytics organization must rise. We think this is necessary to handle where analytics is heading."

A centralized analytics organization is necessary for companies to enable pervasive data analytics, said Jim Davis, senior vice president and chief marketing officer at SAS.

"I don't know whether that should be called a CAO organization or an Analytic Center of Excellence," Davis said. "People are looking at data more as an asset" to be leveraged for business gain throughout the company.

A core analytics group can help foster the use of standardized reports, analytic models and reliable metrics across an enterprise.

The group can be a conduit of information for what's possible and what's not possible from an analytic standpoint, Davis said. "It's about enabling an information supply chain within the organization," he said.

A CAO-led organization could help companies alleviate problems caused by a shortage of skilled data analytics professionals, Davis added.

An analytics center of excellence could act as a resource and knowledge base for data analysts throughout the company. "They can find out what data sources are trusted, what tools work, what don't and what projects have been performed in the past," he said.

Importantly, companies with a consolidated analytics organization would likely find it easier to hire and retain talent, Hakes said.

To be truly effective, the CAO role should be a leadership post that reports directly the CEO or COO, Hakes said.

Reporting to a CTO or CIO would likely diminish the importance of the role and its ability to effect change, he said.

Ideally, the CAO have a business background, substantial operational experience, strong domain knowledge and a keen understating of how to leverage IT and data analytics tools, Hakes said.

The concept of appointing a CAO to drive enterprise wide data analytics is not entirely new.

A handful of companies, including AOL and Teradata, have appointed executives to the CAO role. Even so, the notion of having a C-level executive in charge of the analytics mission remains very alien to most large companies .

Pushing for the creation of such a role is a huge challenge, Hakes cautioned. "It is not going to be easy. It will be like pushing a giant rock uphill," he predicted.

Even so, it is change that needs to happen if companies are serious about pervasive data analytics, he said.

Jaikumar Vijayan covers data security and privacy issues, financial services security and e-voting for Computerworld. Follow Jaikumar on Twitter at @jaivijayan, or subscribe to Jaikumar's RSS feed . His e-mail address is jvijayan@computerworld.com.

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