Measure Everything with Data…Then Make Decisions
So why make a wild guess when you can make informed decisions right? Having a data-driven business is becoming an essential thing rather than a trend. That is even more understandable when you look at the top companies in the world by market value. These are all companies whose business models are fueled by data, a big change to what used to be the biggest deal some time ago: petroleum. This company discovered that data is the biggest competitive advantage a long time ago and had inspired a big wave of followers looking to hop in that same wave. The premise is easy: get to know your market by collecting and analyzing its data and optimize your business based on those insights.
So how to start? Collect that data!
You need to collect that data but first, you need a team that will help you to do so. Having a bunch of data is one thing but to be able to get value from it is a totally different monster. You need to collect data and make sure that it is of good quality and is all well structured, in a way that it could be actionable, then you need experts to take action on it. The collection and QC will take a big amount of your time, which is something we all trying to improve. Those folks will probably have some experience in data science and a combination of skills that are high on demand: statistics, coding, and business savvy. The data collection part most likely is best fitted for your IT team rather than your BI team but both teams should work together because even though the IT team will most likely build all the data collection structure it will be the BI team who will probably make the most use of it.
Most likely you will have all that big data stored in a data warehouse(cloud-based hopefully) and will use different platforms to extract that data, explore it, and gather those insights that will give your business that competitive advantage. This seems simple but is very complex, especially for legacy businesses who are still struggling with the digital transition and places where there’s no data culture or understanding. I like to visualize a simple data analytics pipeline in this way:
Data sets the tone and we all should follow
So when you are a true data-driven business your whole business model changes starting with the organization structure. Things change from the traditional triangle with the CEO at the top and a bunch of leaders at different levels until the bottom. When the business decisions are based on data, and that data is available to all levels in the organization, then why wait for the big guy at the top to give the thumbs up? Having data available and using it to make decisions means that the CEO most likely will be able to make the same decision as the guy who is a couple of levels below. At the end of the day they both will be looking at the same number! This will naturally change the traditional triangle-shaped business organization to a flatter model with fewer leaders in the middle and more people working together at the same levels.
A basic step forward in this direction is to democratize your data by visualizing it and making it available for everyone, probably in a web-based location, where all stakeholders can visit to answer those questions by themselves. Easy looking, functional, and rich in data dashboards which data is streamed straight from your warehouse or main source and updates at a healthy frequency could help you with that. There are a bunch of tools for that matter from the still free Google Data Studio to leaders like Tableau or Power BI to tools tailored for specific industries like the marketing focused and recently acquired by Sales Force Datorama.
Getting that data-driven mentality to the next level.
When you have your BI team and business model built around it your business meetings will start by looking at data: how our KPIs are doing? Then start making questions around those numbers: Why? When? Who? Hopefully, you have your data well structured, the tech available and the team to take care of those questions. You don’t want just a report telling you what’s going on but you want to understand why. That means going to another level of BI, a step forward that will be reached when your business is starting to mature into this data-driven mentality. I usually like to think of 3 levels of data analytics:
To get from that first basic level to a more advanced level you need upgrades in every part of your BI team. That’s because is very possible that the guys who helped you to create those visualizations and reports and then got into analyzing the data to give you insights won’t necessarily be the same guys that will be able to get your business there. At least you will need a more advanced skill set and tech to get there which could come from new hires(and expensive ones indeed), train your current employees, or look for outside help from a consultant group.
Now if you get to that third level with all those machine learning algorithms and predictive intelligence you will be into something. Once you are there you will like to adjust your whole business around those data-driven algorithms which will tell you what you need to do or just let a machine do it. This will make your BI team the organization's rock stars and your business one of those that will have a competitive advantage against most. This could also lead to a bunch of daily work being automated and positions eliminated in the way which goes back to the flatter business organization we talked about earlier but that is another topic to talk about. Also at this point, your digital business will look something like this:
This goes for all kinds of organizations with adjustments in tech and talent depending on how much you need it to scale and your budget. There are so many examples of how data have led to improvements in different fields from sports to politics. Being able to collect data, mine it, visualize it, analyze it, and take action on its insights is the way to go and if you are not into it or are struggling in one of these steps you must scream for help because disruption is in its way to visit you and the news won’t be friendly.
