SLC NEWS

Are you Data-driven or Data-distracted?

By Jim Crompton

There is so much discussion these days about the importance of analytics. Most everyone would agree
that to achieve real value from these new statistical tools, your organization needs to have a data-driven
culture. But are you Data-Driven or Data-Distracted?

But what do we mean by “Data-Driven” or better yet “Business –Driven ‘? "Data Driven," from a business
perspective, is about competing on analytics. Big data initiatives get more support when driven by a
specific business requirement. Analytics programs should focus on metrics and processes with top
management priority, such as how to reduce operating costs, improve operations reliability, prevent fraud
before it can do damage, or shift resources proactively to where analytics show demand is headed.

"Business-driven" analytics, versus “technology-driven”, is a critically important differentiator and it is

clear that this must be management led. Most business users, who are subject matter experts in their
own areas of concern, have little interest in the technology details. Some still resist using BI and analytics
tools, preferring to do their own analysis on spreadsheets or just go with gut feel and intuition.

Organizations are vulnerable if they convince themselves that by merely installing packaged solutions
they will have become "data-driven" and ready to conquer the world with analytics. According to TDWI
(The Data Warehouse Institute), here are two key points that organizations seeking to become more
data-driven should address:

#1: Know more about your data. Unless organizations know where their data is located and how it is
being used, they will fall short of creating the strategic asset that they envision. The chances are too high
that as users try to perform analytics across sources, data quality, profiling, and metadata errors will
increase the "noise" level so high that the effort will grind to a halt in confusion.

#2: Take data governance seriously. Pressures are rising on organizations to take better care of
customer data and adhere to regulations governing the use of information. Governance policy
enforcement involves identifying, securing, and managing data in multiple systems at multiple locations.
Without reliable and repeatable methods of understanding where data is and how it is being transformed,
organizations will struggle to respond to current regulatory obligations and address future ones.

It is far too easy to lose the focus on data and fall into the trap of focusing on technology. In a recent
TDWI interview with Marc Demarest, CEO at Noumenal, Inc., Demarest makes the point about how easy
it is to become technology-driven or data-distracted.

Marc Demarest: “I am not sure I know why we seem to want to drift from conversations about data, as the
raw material for decision-making, to other kinds of conversations. I've always assumed that the drift
stems from a lack of comfort we have, collectively, with decision-making as a process problem with our
precursor discipline, decision support systems (DSS). DSS is largely about non-technical factors — about
people, organizations, and politics and how and why companies do (and don't) model their decision-
making processes, and let data drive their decision-making processes and outcomes. DSS is
sociotechnical, not technical. It is more concerned with the sociological problem than the technical
SLC NEWS

infrastructure required to support decision-making.”

“We seem to prefer a periodic change in vocabulary. We used to talk BI, and now we talk analytics, but
the things we talk about don't change, and those things are, largely, compiled things. Shiny,
programmatic objects. Many of us are technologists, or think we ought to be technologists, and so we drift
in the direction of technology more or less naturally. Those of us who aren't technologists by inclination
find ourselves being pulled by the technological center of gravity into largely technical discussions,
particularly when we hear statements -- often from suppliers -- that this or that technology inherently
provides some kind of competitive advantage or uniquely offers the opportunity to discover "new insights"
in our company's data.”

What do I mean by distracted? If you have just purchased and installed a new Apache Hadoop
infrastructure and you are looking for a business case to justify the purchase, you are distracted. If you
are still trying to find a data volume with sufficient data quality to use your new data appliance or in-
memory storage unit or advanced analytics platform, you are distracted. If you have a job opening out in
the market for a data scientist and you have to admit you really don’t know what it is that you are looking
for and you still can’t fill your traditional data manager positions, you are distracted.

It is easy to get distracted by shiny new objects. There is a lot of competitive peer pressure to always
have the latest technology gear and not fall behind the latest release. New technology acquisitions, along
with maintenance of current infrastructure, make up most of the IT budget. When the IT departments
worries more about the Technology than the Information, and when business users run away from data
responsibilities and hide behind data access interfaces, you are kidding yourself if you think you are data-
driven and the business value you are expecting will remain on the shelf.

Becoming “Data-Driven” is not easy and takes a lot of work. It is often seen as the unsexy, behind-the-
scenes work that you wish someone else would take care of. Data is not a corporate asset just by saying
it, but the data-driven journey is worth the effort.

Jim Crompton is currently the Managing Director at Reflections Data Consulting as well as the SME/Senior Architect at Noah
Consulting, LLC. He has almost 37 years with Chevron where he was named a Chevron Fellow in 2002. He retired from Chevron in
2013. Jim is a frequent speaker and author on Digital/Intelligent Energy and the Data Foundation. Jim is the co-author of the book
titled "The Future Belongs to the Digital Engineer" with Dr. Dutch Holland.