Becoming Data Driven 101: Planning for Success
Tom Davenport, Babson College
Bill Franks, Teradata
Bill Franks is the Chief Analytics Officer for Teradata and author of the books Taming The Big Data Tidal
Wave and The Analytics Revolution. Franks is
a faculty member of the International
Institute for Analytics, and an active speaker who has presented at dozens of events in recent years. His blog, Analytics Matters, addresses the transformation required to make analytics a core component of business decisions.
Tom Davenport is the President’s Distinguished Professor of IT and
Management at Babson College. He is also the
co-founder of the International Institute for Analytics, a Fellow of the MIT Center for Digital Business, and a Senior Advisor to
Deloitte Analytics. He teaches analytics and big data in executive programs at Babson, Harvard Business School, MIT Sloan School, and Boston University. His most recent book is Big Data @ Work.
Varieties of Data Driven
Data-driven
organizations
Data-driven
culture
Data-driven
strategy
Data-driven
decision making
Data-driven
marketing
Data-driven
executives
Data-driven
industries
Data-driven
supply chain
Data-driven
design
The
Data-driven
life
Data and analytics drive most aspects of the company!
– Most decisions and actions based on data and analytics
– Business processes digitized and create data as they operate
– Data is consistent throughout organization and of high quality
– Data heavily used in operations and in customer offerings
Data-driven organizations
don’t have perfect data
– But it’s governed well,and is good enough for widespread use
Can you share some of the benefits of being a
data-driven organization?
Customer Insight
•
Gathering and analyzing data
from all customer transactions
– Demographics
– What you buy
– What you look at online
•
Examples of data-driven
customer insights
– A billion dollar loyalty database
at Caesars
– Data-driven customer
relationships at RBC
Operational Efficiency
•
Using data and analytics to deliver dramatic
improvements in operational performance
– Supply chain
– Manufacturing
– Service and sales processes
•
Examples of data-driven operational efficiency
– New metrics and optimized manufacturing operations
at McCain Foods
– Using sensors in POS devices at NCR to identify likely
failures before they happen
– Shorter waits, less blood use at Cleveland Clinic
– Data-driven operations at Uber, AirbNb
Benefits of Being Data Driven
Better Financial Management
• Optimize use of financial resources and understand what drives performance
– Risk analysis
– Testing capital investments
– Predictive performance management
• Examples of data-driven financial management
– Real-time, one-version-of-the-truth financial
decisions at Boeing
– Assessing service-based
profitability at TD Bank
Creation of New Products and Services
•
Offering products and services based on data
and analytics
– Online companies
– Traditional industrial firms
– New business units
•
Examples of data-driven products and services
– Precision agriculture services at Monsanto
– Predictive maintenance services at GE Aircraft
and Energy
– “People You May Know” and others at LinkedIn
– New business units at JPMC, Barclays
What are the key choices an organization needs to make
when becoming data driven?
Key Choices in Being Data Driven
Internal or external focus? Offense or defense? Infrastructure or business applications? Transactional or behavioral data? Descriptive analytics or predictive and prescriptive? Human or automated decisions?Can you explain the various levels of data-driven
organizations?
Data-Driven Strategy and Competition • Data products and services
• Operational and pervasive data-driven decisions • Management of structured and unstructured data • Enterprise focus on data and analytics
Data-Driven Competencies • Advanced analytics usage • Evidence-based culture
• Big data exploration and pilots
• Executive engagement in data initiatives
•
Organizations progress
through defined stages of being
data driven
•
Doesn’t work to strive for the
highest stages without achieving
the lowest
•
But useful to know the purpose of
completing the initial stages
– Not just for their own sake
Three Stages of Data-Driven Organizations
Foundation
• Transaction systems • Data warehouse
• Structured data reporting • Basic governance
•
Good transaction systems to
provide data
– ERP, CRM for example
•
A place to store the data for
analysis – typically a warehouse
or mart
•
Some ability to do descriptive
analytics on the data
– Reports, scorecards/dashboards,
queries
•
A governance structure for
key data
– For integration, common data
Foundation Stage
Foundation
• Transaction systems • Data warehouse
• Structured data reporting • Basic governance
•
Widespread use of predictive
and prescriptive analytics
•
A culture that emphasizes
analytical decisions
•
Some exploration and analysis of
unstructured big data
– Clickstream, social media, text
•
Executives on board
– Aware of the potential, engaged
in the execution
Data-Driven Competencies Stage
Data-Driven Competencies • Advanced analytics usage • Evidence-based culture
• Big data exploration and pilots
• Executive engagement in data initiatives Foundation
• Transaction systems • Data warehouse
• Structured data reporting • Basic governance
• Some development of data and
analytics-based products and services for customers
• Analytics and automation embedded
within systems and processes
• Widespread use and integration of
both structured and unstructured data
– Experiments with Hadoop, data
discovery, and data lakes
• Enterprise roles and responsibilities for
data and analytics
– CDO, CAO
Data-Driven Strategy and Competition Stage
Data-Driven Strategy and Competition • Data products and services
• Operational and pervasive data-driven decisions • Management of structured and unstructured data • Enterprise focus on data and analytics
Data-Driven Competencies • Advanced analytics usage • Evidence-based culture
• Big data exploration and pilots
• Executive engagement in data initiatives Foundation
• Transaction systems • Data warehouse
• Structured data reporting • Basic governance
Financial Services Firms
• Wells Fargo • Capital One • Citi • JPMC • RBC • Toronto Dominion
Online Businesses
“Data driven from birth”
• Google • eBay • LinkedIn • Facebook
Retailers
• Walmart • Target • Williams-Sonoma • Macy’s • Tesco • 1-800-Flowers.comData-Driven Strategy and Competition – Who Does It?
Questions & Answers
