The Golden Triangle of Analytics
The Three Must Haves for Successful Information Systems
Leaders of successful and ambitious companies usually have the honesty to recognize that when it comes to analytics, they frequently are not getting visibility into the information they want to see.
For example, there may be gaps in the level of data granularity, whether in sales, operations, or HR. Or perhaps the systems are not flexible enough to run what-if scenario modeling. Or the information is not self-serve, and the business relies too much on IT to build reports.
These scenarios can lead to spreadsheets running amuck, leaving one thinking, “How do we get Excel under control?” “How can we better systemize processes to get the data we truly need?” “How do we better enable our users to gain insight?”
The Three Must Haves
Delving deeper into first principles, we can reduce this pattern of inquiry into at least three must-haves for successful information systems, each of which is harmoniously tied together to provide systemization of processes, increased accuracy and understanding of data, and spreadsheet reduction.
The three must have’s are:
- Self Service Culture
- Spreadsheet Efficiency
- Meaningful Information
Each of these areas is a golden mean between organizational vices. The article, The Competing Dualities of Business Analytics and How to Find the Golden Mean, describes the organizational vices in depth.
The three golden means are intrinsically linked. You cannot impact one without affecting another. This interdependent relationship between the golden means creates a trio named “The Golden Triangle of Analytics.”
The following diagram shows the Golden Triangle of Analytics, with each focus area a side of the triad.
If the Golden Triangle is applied correctly, it can yield a high degree of organizational flourishing. If not applied correctly, it can act as a triple constraint model, yielding analytics project failure.
Flourishing or constraint? Is the glass half empty or half full? The perspective, my friend, is in the eye of the beholder and how you use the triangle. For example, a baseball bat. Used correctly, it can hit home runs. Misused or inadequately applied, it can accidentally clunk the umpire in the head. The choice is yours.
Triangular Dependency
Most people in modern IT have heard of the classic Iron Triangle of time, cost, and quality. This three-way relationship is fundamental to many different aspects of technology, including but not limited to project management, business process improvement, and solution development. The iron aspect of the triangle comes from the notion that you cannot increase or decrease one side without impacting the others. For example, for me to reduce the cost of an IT project, in turn, I cannot do that without impacting time and quality. Or, supposing we wanted to increase quality, this likewise would require an extension of time and cost. Neither side works in a vacuum, and all sides are intertwined. The relationships are immutable.
This principle of triple constraint translates to the Golden Triangle of Analytics. You cannot affect one of the axes without the participation of the others. No different than the Iron Triangle of cost-time-quality, the golden means of business analytics: information, spreadsheets, and culture are highly interdependent. Ignore this interdependency at your peril.
Take, for instance, a hypothetical company called ABCCorp facing an Excel Hell problem.
The Tragic Tale of ABCCorp
Spreadsheets are rife throughout ABCCorp, there is no one version of the truth, and the analytics in each critical business functional area are siloed.
Supposing ABCCorp seeks to solve this problem. The article Understanding the 7 Types of Spreadsheets — The First Step of Managing Excel Hell explores the spreadsheet use cases that organizations face, which ones are healthy and which ones create dystopia. ABCCorp sets out on its solution endeavor, beginning with identifying the 7 types of spreadsheet use cases. This is a good start. One cannot fix what one cannot first clearly identify.
The spreadsheet investigation effort, in turn, naturally triggers investment into projects and tools that promote, enable, and foster spreadsheet efficiency and a nurturing of self-service culture. As you will recall, spreadsheet efficiency and self-service culture are two of the golden means of business analytics and act as one of the hypotenuses of the Golden Triangle. However, what about the other side of the Golden Triangle: meaningful information?
Supposing the technologies, people, and processes that ABCCorp invested in to provide spreadsheet efficiency and a flexible self-service culture are magnificent, but data flowing through the tools is dirty, cluttered, and convoluted, with multiple versions of distorted meaning, leading to distrust. The lack of meaningful information neutralizes the spreadsheet efficiency and self-service investments. The age-old adage rings true here: garbage in, garbage out.
ABCCorp project leadership, confounded by the lack of success of their initiative and under pressure to realize gains on their capital investment, now falls subject to a fight-or-flight response. They are faced with a choice: kill the project and cut their losses, aka flight. Or resort to force to push it to success, aka fight. ABCCorp decides to opt for the fight response.
What part of the company to better apply the force? IT. The fight response transforms IT into the Dark Lord of the Sith. ABCCorp implements an IT Guided approach to help bridge the deficiencies of the system and help give the users the data they need, thus violating the golden mean of self-service culture, which is what they set out to achieve in the first place. Sadly, once the cultural bastion collapses, the ABCCorp users will naturally resort back to spreadsheets, Excel Hell, commencing a complete and total collapse of the Golden Triangle. Return to square one. What a waste of time and money.
Unfortunately, this tragedy I am describing around ABCCorp happens to many organizations. I have witnessed it firsthand. Companies tend to fixate on one of the hypotenuses of the Golden Triangle and forgo the others. Thus the aspects of business analytics success are hampered. As if staring into the eyes of Medusa, the Golden Triangle can be transformed to stone, becoming inflexible, unyielding, and constraining, leading to an analytics fool’s paradise and eventual loss of time, revenue, and worker productivity.
Flourishing: How to Achieve Triangular Expansion
Realizing the right balance on all sides of the Golden Triangle is vital to enable business analytics to flourish within a company. Gaining equilibrium and increasing the three-way relationship, all the segments in harmony, triangular expansion, is critical. If one side grows, the others must develop also. If one side shrinks or is neglected, it will tear the others down.
Attaining triangular expansion can be a tightrope. For each of the golden means, there are two vices. Since the Golden Triangle dictates that progression must occur across all the golden means, this would indicate while there are three things you need to get right, there are six things you can get wrong. Two-to-one odds of failure (see The Competing Dualities of Business Analytics, and How to Find the Golden Means, for more on this ratio).
These two-to-one odds are why implementing analytics in large organizations can be inherently challenging. While there are obstacles to face, it is not outside the grasp of a company armed with the proper knowledge and mindset. A holistic approach involving people, processes, and technology is required to achieve trilateral growth and not fall into each duality’s vice traps.
While people, process, and technology are all instrumental ingredients in each bastion of the Golden Triangle, every segment has its emphasis area. The following heuristic illustrates the people, process, and technology centricity of each bastion of the Golden Triangle.
Culture is cultivated through people. Establishing roles, responsibilities, and ownership is vital. How analytical projects and departments are staffed is of crucial importance. Diplomats and liaisons bridge the divide between the technical engineer and the businessperson. The correct balance of individual autonomy versus collaboration cannot be overlooked. These features and more are critical in creating a homogeneous culture that can foster flexible self-service and an information driven business.
Whereas culture emphasizes people, deriving meaningful information requires a more process-oriented approach. One that involves the integration of XP&A-based methodology, hub and spoke decentralized design principles, the correct balance of the mundane-complexity relationship, master data management strategies, and information as a product mindset, ultimately leading to truth, trust, knowledge, and understanding.
Spreadsheet efficiency deals with a more technology-oriented slant, starting with assessing the seven types of spreadsheets, a correct balance of Excel versus web UX interfaces, understanding BI, EPM, predictive, no SQL modeling, write-back, cloud, and their adequately applied use cases. The spreadsheet is at its core in 1960s technology and permanently fixes analysis to an X-Y constraint. With the correct technologies, a business can move beyond two dimensions into multi-dimensional analytics.
Finally, leadership. Without decisive leadership, there is no driving force to lend impetus to triangular expansion. In my experience working with mid to large-scale enterprise organizations, I cross paths with many high-powered individuals, from the c-suite to middle management, who buy into the “Field of Dreams Ideology.” Field of Dreams, if you recall, was a 1989 film about a guy’s mysterious journey to build a baseball field where the ghosts of great players emerge and play. “Build it, and they will come.” This quote is one of the famous lines from the movie. While Field of Dreams is genuinely inspirational, when it comes to business systems, the “build it, and they will come” doctrine is a fixed fantasy, which leads to an end-user no-show. Leadership must be active, not passive, embracing change management and fostering an environment where disciplined analytics is a norm, not an afterthought. This starts at the top.
Early in my career, I worked with highly progressive companies that were, for their time, at the cutting edge of business analytics. I will never forget the CFO of one organization; whenever she was presented with a report, she would ask, “where did this information come from?” If the information was derived from a source other than the chosen BI system, she would dismiss the report and respond, “get it into BI, and I will look at it.” This approach was a life lesson for me in disciplined top-down leadership, and this simple question had a transformative effect on the outcome of the BI system. To this day, that was one of the most successful long-term implementations I have ever been involved in.
The correct balance of spreadsheet efficiency, meaningful information, and flexible self-service, combined with dedicated leadership, will drive the expansion of the Golden Triangle. The Golden Triangle provides the soft gains, which in turn, facilitates the hard gains. Only when the Golden Triangle grows will the hard gains of time, cost, and quality be realized.
About the Author
Scott Gehring has over 30 years of experience in global enterprise information systems and holds several patents for his work in varying industries. As a pioneer in the field of analytics, he has been an influential industry leader in defining best practices around system design, implementation, integration, and operations. Scott has built hundreds of solutions for companies ranging from small-mid-business to large-scale enterprise organizations, helping to drive process improvement, tighten the link between business and IT, and provide the latest innovations in information technology.
www.scott-gehring.com
www.linkedin.com/in/scott-gehring/
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