Why it is important to discover the pile of data you’re sitting on
It’s a famous sentence that occurs in numerous exciting and thrilling movies: “Come out, come out wherever you are…”. It indicates a breaking point in the storyline of every movie: will the person that’s hiding under the bed be found or not? The same reasoning can be applied to data: are companies able to find the data that’s hiding underneath the beds of different departments and change their storyline? And if they find the data, will they be able to get their happy ever after?
Like in every story, the road to success is paved with obstacles. In our story we want to reach the highest step on the data-driven maturity ladder. But before reaching the top, you will need to face 5 challenges along the road: data usage, data storage, data analysis, data governance and KPI’s and metrics. If you want to build your roadmap to a higher maturity level, you first need to understand where you stand today. You need to assess the level and potential development areas of each of those 5 challenges. But let’s tackle one at a time! Data usage is the one we’re dealing with in this article.
But what do we mean with 'data usage'?
The term 'data usage' consists of multiple components. Assuming you already discovered the first piece and you know which data is lying underneath your bed, the next factor you should look at is whether you share your data with the rest of the company. And are the other departments sharing their data with your department as well? The final component is knowing whether your company is using all their data to spot market opportunities. It’s the cohesion of all those components that defines which level of data usage you currently have.
To define the steps you should take, you need to know where your company stands today. As a benchmark, you can compare your own answers with those of the Yearly Marketing Survey 2018. You will notice that Belgian companies are currently still quite dispersed around 3 levels: siloed, cross- departmental and recognizing market opportunities and innovations. So time to take the bull (or in this case the departments) by the horns and assess where YOU are!
At The House of Marketing, we are strong believers that data-information is available somewhere, and all you have to do is ask. Our suggested approach is to specify a contact person per department and go through a predefined list of questions together. It’s important to not only look under your own bed, but to look at all other departments. Unfortunately, too often we notice big differences between departments when it comes to data sharing: finance might be sharing their database of bad debt only with customer care. When marketing is left in the dark, it will still send promotions to those customers. Not so beneficial, right?
So, from the start, it’s important to be thorough and include all departments. Define some key questions that you want to ask the respective departments, which will allow you to get a first indication of your data usage level. But don’t forget to analyze the results! Are there any discrepancies in the answers or are departments lacking behind compared to others? Make sure you have an unambiguous view! If this isn’t the case, sit down with the departments involved and get to the bottom of the discrepancy.
Examples of questions to determine your data usage level:
- Is your department a data generator or a data consumer?
- Which data sources can you access in your department? (E.g. CRM, ERP, Excel, …)
- How do you use data most often? E.g. in analyses/reports/dashboards or to calculate your ROI.
- Do you share your data with other departments?
- Do other departments use your data?
- Do you receive data from other departments?
- If you have a new business question, do you build on what has been done in other departments to tackle this or do you start from scratch?
- Does the management use data to support or inspire their (strategic) decisions?
- Expressed as a percentage, how many of your management decisions are data-driven?
- Do you integrate external market data to extend your insights with benchmarks?
- Are you able to spot trends by using your data?
You now have all the cards in hand to define your data usage level which will enable you to formalize the next steps. At The House of Marketing, we defined 4 different levels: crawl, stand, walk and run. By defining the level for each of the 5 challenges on the road to your data-driven future, you will be able to define the company’s overall level. When focusing on data usage, we’ve created the following maturity definitions:
Crawl: This is the most juvenile level possible. These are companies that haven't realized yet that they generate data, and decisions are based on gut-feeling. They miss opportunities and have no clue about who their customers are. In the current age, these companies are falling behind and will need to act fast in order to stay competitive.
Stand: Companies at a standing level have their data in silos. Each department is using its own data but the sharing principle is not promoted yet. All data stays within the department. Often, we see that each department deploys its own tools, which makes sharing even more complicated. The company doesn’t build its strategy on common KPIs, for which each department provides its data to feed the strategic dashboard; instead, everybody delivers their own piece of the puzzle without being able to see the full picture.
Walk: They are almost there! Being at the walking level means companies have learned to share data across departments. Their view on performance is not limited to their own data sources, but they see the effect of their actions on other departments as well. The departments are working together to reach their goals. Input from others is included in the analysis to have a 360° view.
Run: This is the most mature level you can reach in data usage. If you’ve reached this level, it means your company is using the insights it gains from the data to recognize opportunities or define where to innovate. Data is seen as a company-wide asset, the power of data has been unlocked and is being leveraged as a competitive advantage.
Based on the description above, you might already have a hint of your company’s level. But be careful, as mentioned earlier: make sure you get the input from all departments before you categorize yourself!
Once you’ve defined which level you’re at, how do you get from one level to another?
From crawl to stand:
1. Create awareness within the company. Employees need to realize that everything they do generates data, and that this data is a valuable resource.
2. Try to find the driver for each department which will motivate them to allocate time and effort in discovering and using their data. Make sure they understand the value of their data and learn to work with it.
3. Map your data. It allows you to visually show underlying connections and is a valuable document in future steps.
4. Create reports. Ask people what they want to see, and visualize it in an appealing way. Make sure people understand what they are looking at and make sure they know how to use it.
From stand to walk:
1. Raise a specific business question and define which data sources you need to solve it.
2. Collect the data from around the company. The data map created earlier might come in handy now to define where the necessary data is.
3. Garbage in equals garbage out: Take a look at the data sources, do they contain everything you need, are they consistent in format? If they aren’t, take the time to adapt them! It’s better to start from the root then to end up with unusable data.
4. Merge your data by connecting the data sources you need. Make sure you connect your sources (not taking an extract and putting them in a spreadsheet!). It will allow you to use those connections for other business questions as well, which will benefit the whole company.
From walk to run:
1. Tackle the biggest business question of them all: give management the necessary insights based on company-wide data. Make it accessible and readable for them, build dashboards.
2. Gain some credibility. Management needs to be sure they can rely on the data before they use it as guidance. Start with making “smaller” decisions based on company-wide data and measure the results.
3. Repeat. If management isn’t convinced the first time, don’t lose hope. Change takes time, especially changes in the mindset.
Be aware that if you want to reach the highest level, you are dependent on the 4 other dimensions. They all need to move in the same direction to get the desired result. In the following articles, you’ll learn more about the other 4 components that will help you climb the data-driven maturity ladder.
Can’t wait? Download the Yearly Marketing Survey 2018 and get a hint of what’s yet to come!