Chief analytics officer (CAO): The seat of wisdom?

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Chief analytics officer (CAO): The seat of wisdom?

Sharon D'Souza, Reporter

Organizations are starting to appreciate the benefits that business intelligence (BI) offers in terms of fueling sales initiatives and improving overall product and enterprise management. It is no surprise then that companies have started moving towards making taking information analysis operational.

One sign of it is

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the rise of a new kind of CXO, the chief analytics officer (CAO), who would manage the flow of information through the various enterprise-wide processes.

Are you cut out to be a CAO?

Ensuring a single version of the truth, quick availability of information, better management and usage of information, and better informed decisions are the responsibilities cut out for anyone hoping to become a chief analytics officer. (See box: Role of a Chief analytics officer)

The chief analytics officer need not be one of the current CXOs, the CAO can also be someone lower down the line with the ability to extract those nuggets of information that make the difference. “I have observed such persons in finance, MIS, marketing, and sometimes even in IT,” comments Arun Gupta, CIO at Shoppers Stop, who himself is a great believer in the BI cause. But he isn’t the first. Many CIOs and IT professionals are beginning to see the sun rise on the post of chief analytics officer.

Role of a chief analytics officer

The CFO manages information related to finance and accounting and the CIO embraces all IT functions. However, the chief analytics officer may need to be a jack of all trades. The industry participants envision that a chief analytics officer (CAO) will require independent charge of reporting either to the largest consumers of information, or to the CEO and board of directors. He may not be required to be strongly aligned to any one function, but must do justice to information requirements across all functions of the enterprise from marketing, sales, operations, purchase, and HR, to office functions such as general administration.

The CAO embodies all these roles, with strategy planning at the back of his mind. Listed below are some of the potential responsibilities of a chief analytics officer:

  • Analyze data with a 360-degree enterprise view
  • Alert and highlight deviations
  • Monitor trends
  • Provide all possible reports for a context
  • Perform exception analysis
  • Contribute to business strategy
  • Equip stakeholders with the information to manage internal and external teams

Chief analytics officer: Raison d'être

The post of chief analytics officer is not all sunshine and rainbows, though. The cons include misuse of the position by individuals turning into power centers and starving other parts of the company of information. The other side of the coin being that the entire weight of data management falls on the shoulders of the chief analytics officer. The organization may come to look upon him as an information genie to turn to whenever in doubt.

The other question being asked is whether adding another designation will solve the gamut of information issues that organizations face. Pratap Gharge, vice president and CIO at Bajaj Electricals, says, “The CIO is, in most cases, the bridge between the business and the IT. He has a panoramic view of what and how information needs are addressed in the organization. If you have a CAO, the CIO’s profile will be stepped upon.” Further playing down the importance of CAOs, Gharge says, “There usually is one individual who evangelizes business intelligence and analytics in every team.”

Resonances of an earlier debate about whether a CIO was needed at all can be heard in rebuttal. T.G. Dhandapani, CIO at TVS Motors argues, “Departmental leads who deal with report generation are vertically-focused; they severely lack the bigger picture [thus creating room for a separate CAO role].”

Verticals that may set the trend

The adoption of a chief analytics officer would also depend on the company and the vertical it belongs to. For instance, finance and telecommunications, followed by retail, are already ahead of the curve on adoption of analytics. They potentially seem as the early initiators of this designation.

Manufacturing still seems sleepy-eyed to investing in complex BI systems being content with ERP reports. If not completely dedicating a profile to enterprise-wide data management, sooner or later they will have to realize the benefits of operational BI.

With increased adoption of business intelligence (BI) and allied technologies, scores of C-level executives are warming up to the idea of a new chief officer position. With information needs on the rise, perhaps the time has come for another designation, another command center for the organization’s operations.

 

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