According to a new report from Forrester Research, more companies are hiring chief data officers. The study, which was based on a survey of 3,005 business and technology decision-makers across the globe, found that about 45% of firms have already appointed a chief data officer, and an additional 16% plan to create a CDO role within the next 12 months.

What does the growing CDO role mean for CIOs and the companies they represent?

Why hire a CDO?

The role of the CDO varies across organizations, but it tends to include things like data management, data governance, data analysis or the delivery of insights. Overall, CDOs tend to serve as a bridge between IT and business groups, and the hiring of one often demonstrates a company’s desire to sharpen its focus on data. Or, if a company lacks adequate data governance practices, a CDO may be called in to bolster those capabilities, the Forrester study noted.

But the Forrester study also found something else: Companies that have CDOs appear to perform better than those that don’t. According to the study, 54% of companies with 10% year-over-year revenue growth or more have CDOs, while 33% of companies with less than 4% revenue growth have them.

Room for both?

A 2014 study by Gartner predicted that by 2017, almost two-thirds of organizations that have both a CIO and CDO role will have axed one in favor of the other. But more recent evidence suggests there is plenty of room for both roles within an organization.

While CIOs manage many of the day-to-day IT tasks within an organization, CDOs may be assigned to take on more strategic analytics roles. For many companies, that makes sense, because few CIOs today have the bandwidth to manage internal technology operations and figure out how the company can extract value from the overwhelming proliferation of data available today. But that type of separation may also lead to friction between CDOs and CIOs.

Forrester said another potential challenge for CIOs could be the lack of a template for how the CDO fits inside an organization. Most CDOs report to either the CEO or CIO. In some cases, CDOs may even move around a company as they work with different business units to extract value from data.

Keys to success

Companies that employ both CIO and CDO roles say clearly defining responsibilities and encouraging collaboration are important to a successful relationship. Companies considering hiring a CDO in addition to their current CIO should therefore push for a clear demarcation between the roles and also strive to define clear principles of ownership, purpose and use.

Finally, companies should ensure the CIO is included in at least some of the more innovative new undertakings assigned to the CDO so they don't feel as if they are simply “stuck managing the plumbing.”