Prof Yudhvir Seetharam | The evolving role of the chief data analytics officer in SA businesses

Data is much more than numbers on a spreadsheet. For today's business, it is the foundation of decision-making, efficiency, and innovation. In fact, businesses the world over now recognise data, and its effective analysis, as indispensable drivers of sustainable business success. The increasing complexity of data ecosystems and the rise of artificial intelligence (AI) and machine learning (ML) have massively transformed how organisations handle and use data. As a result, the role of the Chief Data Analytics Officer (CDAO) has also evolved - shifting from the purely technical position it once was to a strategic function that requires the effective balancing of innovation with risk management. This shift is necessary for businesses to continue thriving in an ever-increasing complex environment. 

From IT support function to strategic leadership role :

Not long ago, the CDAO's primary function was to analyse data in order to guide business processes, particularly in the areas of marketing, sales and product development. As such, data analytics was largely seen as an IT function, with the CDAO often reporting to the chief information officer or a similar executive.

Today, the CDAO's role has expanded significantly. The proliferation of AI and machine learning has not only increased the importance of data, but also introduced new risks. These range from the financial and reputational costs of adopting emerging technologies to ensuring compliance with regulations such as South Africa's Protection of Personal Information Act (POPIA). As a result, many businesses have expanded the CDAO's role to incorporate and work more closely with risk management functions. Increasingly, these professionals now liaise regularly with Chief Risk Officers, often guiding and advising on pertinent IT-related risks, including the ethical use of data.

Beyond risk management, the modern CDAO is also tasked with fostering a culture of data-driven decision-making. This involves breaking down silos between departments and ensuring that data insights are embedded into every aspect of the business. He or she also plays a crucial role in enabling businesses to move from reactive to proactive data use. Rather than simply managing existing data, CDAOs are required to harness advanced analytics to predict trends, optimise operations and even create new revenue opportunities. Their ability to demystify complex data ecosystems and provide clear, actionable insights is essential in maintaining a competitive advantage.

Increasingly, the CDAO is also seen as something of a change agent, responsible for promoting data literacy across the business and empowering executives, managers and employees to make informed decisions based on data rather than intuition. This goes hand in hand with helping to build a more risk-aware culture through training, regular audits, robust reporting protocols and well-defined contingency plans. This imperative is crucial for many job functions that have a "fear of becoming obsolete". With the proliferation of AI, some functions are concerned that their jobs will be replaced by these robotic processes. While AI does have the ability to increase efficiency and effectiveness, the CDAO must ensure that it is used responsibly and alongside human capabilities. This balancing act ultimately increases not just the bottom line of the business, but also improves customer experience.

A seat at the board table:

However, despite the vastly expanded scope of their responsibilities, and the strategic risk identification and business growth functions they fulfil, many CDAOs still lack direct representation at a board level. This misalignment can be detrimental to businesses, as strategic decisions often involve data-driven initiatives. Without direct input from a CDAO, organisations risk missing out on opportunities, or worse, implementing data strategies without fully understanding potential risks.

There are three possible solutions to this challenge. Firstly, forward-thinking organisations could create a dedicated seat for the CDAO at board level, ensuring that data and AI risks and opportunities are managed proactively, at the highest possible level in the organisation, rather than reactively by a line function. If direct board representation isn't an option, then boards should at least invest in data literacy training for their members, equipping them with a foundational understanding of data risks and governance principles. Or the third option would be to appoint experienced data analysts as board advisers, ensuring that data-driven decisions are made with the input of a qualified expert.

The future of the CDAO role:

As South African businesses continue to navigate the fast-changing digital landscape, the role of the CDAO will only become more crucial. Organisations that fail to recognise the strategic importance of this role risk falling behind the competition in an era where data is an invaluable asset, but also has the potential to be a significant liability.

To stay ahead, businesses need to more fully integrate their CDAOs, and indeed all their data leaders, into executive decision-making processes, invest in upskilling initiatives and ensure that risk management is an inherent part of all their data strategies. It's not just about safeguarding their operations; it's key to unlocking the full potential of data to drive innovation, efficiency, and long-term success.

*Prof Yudhvir Seetharam, Chief Analytics Officer at FNB South Africa.