Chief analytics officer: The ultimate big data job?

Using analytics to drive revenue

At Dovetail Health, hiring a CAO signaled the company's desire to think more strategically about the data it was collecting through its medication management solutions. "The data they are collecting in patients' homes is very unique and extremely credible," says David Veroff, Dovetail's most recent CAO (at press time, Veroff had accepted an offer to become SVP of analytics at Silverlink Communications). "This was a rich asset they hadn't leveraged as much as they'd like to."

Veroff's initial focus was on applying analytics to help Dovetail improve patient outcomes based on the combinations of medications they take. His team made early headway in optimizing its patient enrollment processes, using predictive analytics to identify patients who are more likely to enroll and maintain their medication regimens.

But Veroff sees even more potential in using analytics to identify new business lines and other revenue opportunities. "What if they find a tremendous new insight about how certain types of patients have likelihoods of significant barriers in the way they manage their health?" he says. "That's important not only for [Dovetail's] operations, but also for its business strategy, because those insights become sellable assets, which can lead to more service lines."

In this regard, the CAO is no different from the rest of an organization's executive team, says Veroff. "Everyone is held accountable for top-line growth," he says.

Revenue growth is also one of the goals for Chris Mazzei, global CAO at EY, which has committed $500 million to building out its analytics expertise through its Global Analytics Center of Excellence. "We are interested in building our core consulting business, but we are more interested in transforming into an organization that leverages analytics in everything we do," Mazzei says. "My role is to look across all of the analytics skills and initiatives going on throughout the organization and identify what we should be doing across business units on an enterprise basis. Analytics are core to our growth strategy."

Catamaran's analytics team has already seen tangible gains from scouring cross-functional data sets to become more predictive and proactive. One recent project examined trends involving compound medications -- prescriptions that are mixed at a pharmacy. Because the FDA doesn't regulate compound medications, there are wide variations in use -- a trend that Catamaran analysts projected would drive sharp increases in costs for its clients in the near term. Senior leaders, after reviewing the findings, quickly introduced a robust clinical program to ensure the safe and effective use of these compound drugs as well as monitoring them. Clients quickly signed up for the program.

"Without the analytics team, we wouldn't have found that needle in the haystack," says Marks. "It wasn't even on the radar of our product development teams. We were able to bring those insights to light and create an offering ahead of the marketplace."

CAOs and CIOs: Allies, not adversaries

Having the CAO sit outside of IT certainly has the potential to cause friction with the CIO. But CIOs should view their analytics colleagues as allies, not adversaries.

"From a CIO's perspective, I would look at the CAO as someone I can benefit from," says analyst Reed. "While I'm thinking about analytics maybe 10% of the time, they're thinking about it 100% of the time. The work they're doing will benefit me and give me time back to focus on managing the technology environment, which is becoming increasingly complex. I see it as a winning partnership."

CAOs, for their part, see IT as a critical partner. Veroff, for example, says that during his time at Dovetail, he was "joined at the hip" with the company's chief technology officer, Doug Fleming. "In order to do sophisticated analytics, I had to have data management structures that were accessible," Veroff says. "And [Fleming] was building applications that are really going to leverage [Dovetail's] analytics. So we were probably in contact four times a day, trying to stay in sync."

One important skill for CAOs is their ability to act as a conduit between IT and the rest of the business. "One of my roles is to bridge the gap between the technology teams and business teams," says Marks. "We're not necessarily IT, but we understand the nuances. And we also understand the business needs. We're really a translator -- we turn data into a common language that both business and IT can understand."