Data Driven : Digital Marxism
Anyone can create value with the right dataFebruary 2014 By Geoff Wolf
It is the combination of people and tools that create value of any kind, in any industry. In the world of data and analytics, the data or processes themselves are meaningless without a person to make it all happen and to interpret the result. Sure, computers and databases can churn out value, but they have to be loaded with programs and rules first—not to mention the strategic understanding afterward.
Data: Then and Now
Years ago, before 24k modems and couplers roamed the landscape, marketing was dominated by a combination of calculators, yellow legal pads, ledger sheets and mainstream retail marketing practices.
Attribution and investment decisions were built on a foundation of focus groups and old-fashioned research. Then came the world of Lotus spreadsheets, manual reporting and blazing 56k modem speeds. The tools of the trade that created data and analytics value, up until this time, were controlled by a single person with 10-key calculators, Lotus programs and green bar printouts in-hand.
Next came 800 numbers, the Internet, more powerful computers and more complex direct marketing practices. All of this meant more and more data started becoming available. Because of this, the tools necessary to create value from data and analytics needed to become more powerful, too.
It makes sense that the investments necessary to develop new tools to keep up with the voluminous amounts of data arriving would only be available to those with enough cash to make the commitment. Thus, the tools and practices necessary to create value moved into the hands of the larger entities. The single person with a calculator was replaced by a team with relational databases to leverage. Amazing things were accomplished with the never-ending stream of new data, which continues today.
However, technology also has been expanding as rapidly as the volumes of data. We have now gone full-circle in regard to the tools necessary to create value from data and analytics. Extremely powerful tools are becoming available and are returning the "tools of production" back to a single person, with very affordable processing speeds and gigabytes of storage at their fingertips.
All that's necessary to create value now is the time to learn the new tools and keep up with programming enhancements that arrive almost daily. It's safe to say a single person can now deliver 80 percent of the value of a full-scale relational database investment. It also is a good bet that 80 percent is enough to provide all of the data and analytics most businesses have the bandwidth to act on at any given point in time.
During the next year, this column will explore this new world of opportunity that is unfolding in real time. We will look more in detail at:
- Handling offline analytics in a new query and reporting environment.
- Corralling Web data into a more useful tool chest.
- Salesforce data and how those elements may be enhanced to drive more meaningful relationships.
- Integrating point of service (POS) data in a more useful manner, without slowing down the register.
- Bringing all these media analytics into a common arena for discovery and actionable strategies.
At the end of the day, it's all about using analytical tools to create value from data, what the cost and ROI is on that process and how well actionable tactics are developed to create success. Let's look at an example.
The CEO is looking for a 10 percent increase in profitable sales next quarter, and calls the team together to develop a plan for this to happen. The first step for any business, small or large, is to get all of the data from the prior quarter into a single view and look for strategic levers to pull. That's right, it's the analytical team that all eyes are focused on right out of the gate. The team would dive into their databases and reporting practices, which probably include a number of people, tools and resources. There are as many variables of these practices out there as there are people reading this column. Returning to management a while later with prior season data and recommendations would be followed by a back-and-forth process during the next couple of weeks, and a strategy would be finalized.
What if a single person had the tools to take a simple transaction file and serve up a dashboard of key performance indicators (KPIs) that could drive, in real-time, a discovery process with the team to solve the problem of developing a strategy for achieving 10 percent growth next quarter? And all of this in a single meeting?
On the chart (to the left) is a sample set of metrics that can be driven, today, in real-time, to drive the discovery process. Imagine replacing these KPIs with whatever your brand needs to drive success. Now imagine you can combine any of these elements in a relationship manner to discover strategies. Imagine all of this from a transaction file.
This year, we'll dive into the future with columns that look at our brave new world. In regard to the "what if" scenario above: Are we there yet? As an infant, yes we are! Hang on to those baby toes and here we go. A revolution has begun to rock the data world.
Geoff Wolf is EVP of client strategy at the Mission, Kan., direct marketing agency J. Schmid & Associates. Reach him at firstname.lastname@example.org.