The influence of chief data officer presence on firm performance: does firm size matter?
| Pages | 495-520 |
| Date | 08 April 2019 |
| Published date | 08 April 2019 |
| DOI | https://doi.org/10.1108/IMDS-03-2018-0101 |
| Author | Yu Nie,John Talburt,Serhan Dagtas,Taiwen Feng |
| Subject Matter | Information & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems |
The influence of chief data officer
presence on firm performance:
does firm size matter?
Yu Nie
Department of Information Science, University of Arkansas at Little Rock,
Little Rock, Arkansas, USA
John Talburt and Serhan Dagtas
University of Arkansas at Little Rock, Little Rock, Arkansas, USA, and
Taiwen Feng
School of Economics and Management, Harbin Institute of Technology at Weihai,
Weihai, China
Abstract
Purpose –The purpose of this paper is to investigate the relationship between the chief data officer’s (CDO)
presence and firm performance, and the moderating effect of firm size.
Design/methodology/approach –The performance data for 64 treatment firms with CDOs and 64 control
firms without CDOs is collected from Compustat database. The Wilcoxon signed-rank test is used to analyze
the performance differences between treatment firms and control firms. Hierarchical regression method is
used to test the moderating effect of firm size.
Findings –The results indicate that the profit ratios of treatment firms are significantly improved after the
appointment of CDOs, and the profit ratios of treatment firms are significantly higher than that of the control
firms. For the cost ratios, the findings provide some empirical evidence revealing two of the cost ratios are
lower and only one ratio is higher for the treatment firms after CDOs’appointment. Firm size moderates the
relationship between the CDO’s presence and firm performance indicator, ROS, in the same direction. Firm
size has no moderating effect on relationships between CDO’s presence and other performance indicators.
Practical implications –The findings provide practical insights that will help managers to realize the
importance of CDOs and their work. CDOs would bring some cost to the firms, but they would bring more
profit to firms. In addition, if for large firms, the CDO’s presence would bring more ROS.
Originality/value –The study explores the relationship between the CDO’s presence and firm performance.
It is the first attempt to explore the CDO’s presence and the cost performance in the specific time period, and
the study is also the first attempt to analyze the moderating effect of the firm size on the relationship between
the CDO’s presence and firm performance.
Keywords Firm performance, Chief data officer, Cost ratios, Profit ratios
Paper type Research paper
1. Introduction
In the big data era, data have become a very important asset and a powerful strategic
resource of organizations (Lee et al., 2014). The growth of data warehouses and the direct
access of massive data from various sources have increased the need for high-quality data
in organizations (Lee et al., 2002). However, in practice, poor data quality has substantial
social and economic impacts (Wang and Strong, 1996). In order to enhance the data quality
and further make the best use of the data assets, organizations need to establish
an enterprise-level, executive-rank position to focus on data quality, data analytics,
data architecture and data strategy. That is, chief data officer (CDO) executives, or
CDO-equivalent executives if they are not formally titled as CDO (Lee et al., 2014).
According to Lee et al. (2014), the CDO is an executive-rank officer responsible for leading
the effort to build organizational capability that can energize and sustain the entire
organization and extended enterprise, and enhancing the effectiveness of existing
Industrial Management & Data
Systems
Vol. 119 No. 3, 2019
pp. 495-520
© Emerald PublishingLimited
0263-5577
DOI 10.1108/IMDS-03-2018-0101
Received 8 March 2018
Revised 6 June 2018
31 July 2018
Accepted 8 September 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0263-5577.htm
495
Influence of
CDO presence
on firm
performance
governance by putting data on the organization’s business agenda. And the CDO can be
accountable for a failure of leadership in resolving data problems. Under the leadership of a
CDO, business strategies reflect and exploit data, particularly big data, instead of treating
data merely as a by-product of running the business.
The industry practice has shown the trend of setting up the CDO position. The first CDO,
Allison Sagraves,was established in the M&T Bank in 1991. Before2000, there were only six
CDOs in the world, as shown in Table I. From 2001 to 2010, 35 CDOs, as shown in
Table AI, were appointed. From 2011, the number of CDOs increased sharply. Gartner
estimates that therewere 1,000 CDOs or chief analytics officers in large organizationsby the
end of 2015, up from 400 in 2014[1]. The Shorenstein Center on Media, Politics and Public
Policy at theHarvard Kennedy School of Governmentproclaimed 2015 the Year of the CDO[2].
As of November2016, Gartner estimated that therewere 2,000 people in the world whose titles
include “Chief Data Officer”. Moreover, there were about 7,000 data or information
management and/or analytics VPs and above in the world. And about 4,000 individuals
carried “data officer”(including CDOs) as part of their title. CDOs have been appointed in
many differentindustries, such as global investmentbanks, consumer banks, consumercredit
institutions,financial institutions,IT and data companies, healthcare organizations,US federal
and state governments and US militaryorganizations (Lee et al., 2014). According to Gartner,
90 percent of large organizations will have a CDO by 2019.
The dramatically increasing number of CDOs reveals the emerging trend of CDO
positions in big data era. The academia has paid attention to the CDO trend, as well.
The seminal work by Lee et al. (2014) provided a three-dimensional cubic framework that
describes the role of the CDO. About the impact of the CDO’s presence on firm performance,
only Xu et al. (2016) did a study. They collected two years’performance data and showed
that CDO would increase the firm financial performance. However, they only considered the
profit indicators, without considering the cost indicators, and the time period for measuring
performance is too short. Therefore, our study aims to provide a thorough analysis of the
relationship between the CDO’s presence and firm performance, as well as the moderating
effect of firm size.
In the following, we review the literature about the analysis of CDO, present our
hypothesis and analyze data to support an empirical study of the relationship between the
CDO’s presence and firm performance, and moderating effect of firm size on the
relationship. Finally, we present our findings and conclude with discussion and future
research directions.
2. Literature review
2.1 CDO literature
For the CDO in an organization, a very important study is from Lee et al. (2014). They used a
cubic framework to show that, as an emerging position, CDOs play multiple roles in
the company, namely coordinator, reporter, architect, ambassador, analyst, marketer,
Organization name
First
name
Last
name Job title
Year
appointed
M&T Bank Allison Sagraves Chief DataOfficer and SeniorVice President 1991
University of North Georgia Brandon Haag Chief Data Officer 1991
Paramedic Foundation Nicj Nudell Chief Data Officer 1992
Charles Schwab & Co., Inc. Andrew Salesky Global Data Officer and Senior VicePresident 1995
UBS Jacky Osborne Chief Data Officer 1998
Allstate Corp. Eric Huls ChiefData Officerand ChiefData ScienceOfficer 2000
Table I.
CDOs appointed
from 1991 to 2000
496
IMDS
119,3
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