As we begin a new year, every brand and business should adopt the resolution to become more data driven—as both a means to better target and serve clients and customers, and to streamline and optimize business strategies and operations. New research from data-driven business strategic advisors NewVantage Partners offers a progress report on the state of corporate data initiatives. The firm has released the results of its annual data and AI leadership executive survey. The theme of the 2022 executive survey is The Quest to Achieve Data-Driven Leadership: A Progress Report on the State of Corporate Data Initiatives.
“The ten years of the survey provide a useful measure of progress—or the lack thereof in some respects—in how companies are managing these important initiatives,” said NewVantage Partners CEO and founder Randy Bean, and Thomas H. Davenport, author of the landmark study Competing on Analytics, and a Fellow with the firm, in the foreword to this year’s survey. “From 2012 to 2022 the survey has assessed the initiatives that large companies are focused on, where they are investing and the returns they are getting, the roles assigned to manage data, and the issues that cause significant challenges.”
Key findings of the survey:
Investment in data and AI initiatives continue to grow as efforts deliver measurable results
Investment in data and AI initiatives continue to grow—the 2022 survey indicates that 97.0 percent of participating organizations are investing in Data initiatives and that 91.0 percent are investing in AI activities. This year, 92.1 percent of organizations report that they are realizing measurable business benefits, up from just 48.4 percent in 2017 and 70.3 percent in 2020.
Achieving data-driven leadership remains an elusive aspiration for most organizations
Organizations still face a potentially long road ahead of them in their efforts to become data driven. Less than half of respondents replied that they were competing on data and analytics—47.4 percent; only 39.7 percent reported that they were managing data as an enterprise business asset; barely over a quarter (26.5 percent) report that they have created a data-driven organization; and just 19.3 percent indicate that they have established a data culture.
AI initiatives are accelerating, but implementation of AI into widespread production remains low
Organizations report a more than doubling of AI initiatives that have moved into widespread production—26.0 percent, up from just 12.1 percent in 2021. Yet, this continues to represent a small proportion of companies that are using AI on a widespread basis. Overall, 95.8 percent of organizations have AI initiatives that are underway in pilot of limited production.
Becoming data-driven requires an organizational focus on cultural change
For the 4th consecutive year, over 90 percent of executives (91.9 percent in 2022) point to culture as the greatest impediment to achieving this business outcome. Only 8.1 percent cite technology limitations as the primary impediment.
The Chief Data and Analytics Officer (CDAO) role continues to grow and evolve, while turnover and stability remain challenges in what is still a new role
The percentage of organizations that have appointed a Chief Data and Analytics Officer (CDAO) continues to increase—up from just 12.0 percent in 2012 when this survey was first conducted to 73.7 percent in 2022, a decade later. Challenges remain however as 59.8 percent of organizations continue to report that the role is nascent, evolving, or subject to turnover.
The CDAO role is focusing in on business growth and analytic outcomes
It is notable within the past few years how the CDO role has evolved to encompass analytics as an expanded CDAO function—44.3 percent of CDAOs now come from a data analytics or data science background, contrasted with 29.1 percent from a data management or data governance background.
Data ethics will be the next major frontier for leading organizations
Less than half of organizations (44.2 percent) report that they have well-established policies and practices in place governing data and AI ethics and the responsible use of data. Less than a quarter of data executives (21.6 percent) believe that the industry has done enough to address data and AI ethics issues and standards.
The 2022 survey, the 10th since its inception in 2012, reflects a record number of participating organizations—94 Fortune 1000 or leading organizations, including the broadest range of participating organizations yet. Among Fortune 50 participants are CVS Health, United Health, Exxon Mobil, Cigna, JPMorgan Chase, Fannie Mae, Bank of America, CitiGroup, Facebook, Wells Fargo, Humana, MetLife, and Freddie Mac. First time survey participants include Albertsons, Exxon Mobil, Facebook, Inspire Brands, John Deere, Levi Strauss, McGraw Hill, National Football League (NFL), Schnucks Markets, Stanley Black and Decker, and the Department of Defense, the US Office of Personnel, and Virgin Pulse. This year, a record 77.0% of respondents held the role of Chief Data Officer or Analytics Officer (CDAO).