Will the data-driven inherit the enterprise?

I like to tell my students that the data-driven will inherit the enterprise. I start what amounts to a dialog by asking my students to pull out their cell phones or tablets. I then ask them to push an application. With this, I ask them about the currency of data for their selected application. I then let them know that this kind of mentality is changing how just about every CEO thinks about data. Clearly, those of us working in enterprises are witnessing the emergence of the data-driven enterprise as CEOs demand their data now. Clearly, CEOs have learned from mobility what Derek Abell had attested many years ago—“control is different than reporting in that it implies the possibility of management intervention” (Derek Abell, Managing Dual Strategies, pg. 274). Today’s managers tell me that they want to make decisions as they are needed from timely, trustworthy data.

Age of productivity versus the age of engagement

In the era prior to mobility—let’s call it the age of productivity, CEOs and their management teams made decisions from a mix of backward facing data and forward facing gut feeling. To be fair, forward facing gut feeling was often derived by using backward facing historical data to predict or forecast the future. The problem is that the cycle of measurement, forecasting, planning, and re-measuring was pretty slow. At the same time, you never knew in a timely fashion if you missed a target. You only knew something had gone wrong or is not working when you have analyzed the data post event. At the same time, age of productivity measurement and forecasting wasn’t always very accurate, but it was the best one could do. And all businesses had an equal data disadvantage.

But this is no longer the case for an emerging vanguard. The emergence of what we can call the age of engagement has made decision making done the historical way a competitive disadvantage. At the same time, the nature of data has changing too. In the age of productivity data was an artifact and captured from events like transactions. In the age of engagement, data becomes the fuel from which enterprise leaders drive and shape business outcomes. Here, data is no longer just determined by application features and requirements. Instead, data is driven by business strategies and improvement requirements. And to respond to the real time nature of business, this means clean and consistent data is needed at every stage of the data lifecycle. In other words, data needs to be in synch and related including from new sources such as social media and IoT based sensors. It should be clear that taking this step will give data-driven leaders the information needed for business competitive advantage compared to what we can call the data hangers on.

Timely, trustworthy data changes everything

According to Lisa Joy Rosner, McKinsey and Company has found putting data at the center of business increases ROI by 20%. She also says that Gartner has found in fact that 69% of marketing executives say their decisions are or will be quantitative based. This provides context for a September 23rd, Wall Street Journal Article. In this article, Suzanne Kapner found that retail jobs are changing. “Retailers’ powerful chief merchants once lionized for their knack from spotting trends, are finding their intuitions being displaced by algorithms. And their companies increasingly are relying on number crunching rather than the merchant’s instinct”.

The WSJ says that “driving this trend are big data tools popularized by online retailers that take the guesswork out of picking goods”. Retailers say that they are looking for new skills in marketing and merchandizing—they want right brain creativity and left brain analytical skills. Some retailers have for example started using Google Analytics to pinpoint holiday food trends. In this approach, they look at ingredient and recipe searches by state. Armed with this data, merchants are able to use spikes in searches to decide how much to stock. One merchant put it this way, according to the WSJ; the science of retailing comes down to presenting, allocating, and replenishing merchandise. For retailers, the toughest thing to do is to get the right product, the right style, and the right quantity”.

Will data orientation change other enterprise roles?

I believe that the answer is yes. Today’s managers need to lead by superior data capabilities. Whether the enterprise strategy is efficiency or effectiveness, data should be an essential business capability. The right to win of enterprises and the continuing viability of leaders today is determined by the data orientation. It is more and more clear that those with a data oriented will inherent the enterprise. For an example, just look at Target’s CEO. If we are going to become data ready enterprises – i.e. to have repeatable processes around how data is accessed, managed, or governed, we need different approaches too. It is clearly not too late to become data ready and unleash the potential locked up within their data.

What has been missing to date is holistic data management platform that provides the data architecture needed to continuously deliver the traditional and forward facing data needed to make the right decisions when they are needed. To accomplish this, what needs to be delivered is data that is clean, safe, and connected all at the same time. This data needs to be easily accessible whenever, wherever, someone needs it whether the data is in the cloud, on-premise or hybrid.

Parting remarks

So I have said it. The data-oriented will inherit the enterprise. What is more and more clear is that the emerging vanguard will use data to create what could become overwhelming competitive advantage. The question is are you going to lead or lag this change? Lagging clearly, could cost you your enterprise franchise.

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Twitter: @MylesSuer