How would you describe your data? That is a phrase you’ll never hear outside of a Data Scientist cocktail party. But it’s an important question.
Descriptive Data, or “Why did that happen?” is where the past 2 levels really starts to sing. Now that your reporting supports business intelligence you can start to dig even deeper
Digging deeper with data sounds intimidating but it doesn’t have to be. Your BI level information works well for short term understanding and is almost a real time indicator of your business. Learning WHY it happened factors in variables that would never cross your mind.
So we used the teddy bear example of business intelligence. You can correlate data points to see beyond the obvious. Descriptive Data takes that even further by looking at the data correlations you might miss and brings them to your attention
For example: Using our Teddy Bear company, your reporting and BI indicate there is a spike in sales around February and then again around December. It shouldn’t come as a shock that these are connected to the holidays. If that is a shock, you might want to get out of the teddy bear business.
Descriptive Data looks deeper into the data and notices things that seem obvious but aren’t always clear. In this case it tells you that dads and husbands buy the bears in February and that mothers buy bears in December.
Not the most groundbreaking discovery either, that is pretty common sense for those holidays. However, it also tells you that its dads under 40 but over 27 who are buying the bears. Its moms 20-35 who are buying the bears later in the year. This insight translates to better accuracy with sales and marketing efforts.
Machines don’t find this kind of work tedious or boring, like most of us would qualify it. Because its a machine you can run these kinds of reports all day every day. To do this by hand would take weeks or months. A machine can do it in minutes.
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“Business Intelligence” as a term always has some interesting visuals in people’s minds. If you instantly flashed to James Bond or Maxwell Smart…you’re our kind of people. *high five*
Business Intelligence is looking at your viable data and deciphering “what is happening right now?”. Knowing what is happening helps you repeat success and avoid failure in the future
A great analogy for Business Intelligence (BI for the cool kids) is the car. Your business is your car, its constantly generating data. The miles per gallon calculation, the miles to your next oil change, tire pressure and so on. The BI part of your car is the dashboard. You get real time feedback from the car on things like RPM and your speed. You also get neat little lights when you’ve broken something. Tire gets low? There’s a light. Oil needs a change? There’s a light. Engine detonated at 7000 RPM? There’s a lot of smoke, maybe some fire, and then a light.
Ok, so you understand what BI is on a broad spectrum. That should be easy to spot with your reporting right? …not so fast. Somethings are easy to spot in data and others are buried deep in the bowels of your data set.
For example: If you’re a toy company selling teddy bears you would understand why you see spikes in your data around Valentines Day and Christmas. People buy more teddy bears around that time of year. Mystery solved. Business Intelligence takes that a step further and shows you the real time data. Its being broken down and put into a format you can make decisions with. Because you can see your business running to plan there are no “lights” on your dash. If something is out of the ordinary then your BI solution would let you know instantly you need to fix something.
So now you know you’ve got a correlation in your data that wasn’t what you thought. Thank you BI for proving I don’t understand my business right? Wrong. Using BI you can now formulate marketing efforts to lengthen that time frame for purchase, hold off on pricing reductions until after your busy time to keep your margin’s high, increase your inventory a week earlier to prevent early outages, and more
You can now see deeper into your business than ever before because you know what just happened. The more accurate the data you input into your reporting now, the more impressive the results will be as you get further down the line in Data Hierarchy
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Reporting is the first step on this journey with Data Hierarchy for several reasons. Reporting is the “what happened?” part of looking at your business.
If a company doesn’t track and understand “what happened” then how would they implement Artificial Intelligence to give them suggestions on data? Better yet…how do you file your taxes without some kind of basic reporting? If you’re going to start making data driven decisions, you need to have data…good data.
Reporting takes on all kinds of forms. The key is to have it in a format that is viable. Notice the word “viable”? That was intentional, the definition of Viable is as follows:
Viable: vi·a·ble /ˈvīəb(ə)l / adjective “capable of working successfully; feasible.”
If your reporting is a color coded spreadsheet in excel with abbreviations for fields that only make sense to you and the other person who uses it…you barely have reporting. Arguably color coding is as effective as a wall covered in handwritten post it notes. (please don’t be “that guy”)
Remember, the long term goal is to have your data work for you, not you work for your data. So your reporting data needs to be in a format that is easily understood by others and computers alike.
There is no shortage of software to make reporting work. The number one problem people run into is cross platform reporting. Which can be easier to fix than you think.
If you’ve got one platform for sales, another for orders, and yet another for payments…oh and the one for accounting. You may have given up trying to find a single system that does it all. Don’t worry, you’re not alone.
You’re actually in the majority with that problem. So much so other companies saw a need to fix that, and they did! These platforms take some skill to connect them but that’s part of the setup process.
Once you have connected all your data inputs into a Viable data set you can do amazing things.
Also is your data accurate? Do you have a system that requires a data field to be entered every single time? Do you have a (lazy) sales person who is putting “asjkdjkldfshjkfadsjkhasdfjklhsdf” in a vital field out of frustration and lack of understanding?
Educating your team(s) that data, good information or bad information, being accurate is vital to being able to fix problems for everyone. If your data is all smoke and mirrors you’ll never be able to do anything of value with it.
Going forward you’ll be able to quickly jump back to the previous segments by following the hyperlinks below.
At Contemporary Analysis we do Data Science Consulting. A large number of the people reading this just said “huh?” and that’s fine…that’s what this is for.
Data Science is in integral part of everyday life at this point and you just don’t know it. As a society we’re generating more data than ever before. Smart businesses are tapping into that data to do things that were previously unheard of.
Take Facebook for example. 20 years ago Facebook didn’t exist, now people are addicted to it and seemingly can’t live without it. But even then, people are still weary of the dreaded “Facebook algorithm” that cuts 50% of the posts you might want to see. That algorithm is data science at work
That’s right, you’ve generated enough data that Facebook wrote some code to cut 50% of your friends out of your life. You didn’t interact with them enough, they didn’t post enough, there are hundreds of reasons why that system feels like your college roommates buddy from down the hall with the cat doesn’t need to be at the top of your feed. It also looks at what you read on a regular basis and then tries to predict what you would want to read next.
So to help people truly understand what we do as a company, and to help you hire us. (let’s be honest) We put together a series on the sophistication of data usage as businesses mature that we call the Business Data Hierarchy. The goal of this series is to help people and companies understand where they are now, and where they could go with data driven decision making.
We’ve written the series to be informative and insightful, with a splash of humor mixed in to keep you awake through the whole process. If you like it or if you feel like someone needs to read this…we ask that you share the info or…better yet…get them in touch with us and we’ll bring the show to you! The pyrotechnic guys tell us we’ll need a 25’ ceiling for the fire and lasers…Hey, it’s a good show.
…this will also be the longest post of the entire series, don’t worry!
When you look at Data, and what it can do for you and your company, there are six different levels of Data Hierarchy. It’s a hierarchy because each level is codependent on another.
These levels are important to understand because jumping from one to another, without a long term goal, can be cost prohibitive. This is even more devastating when you finally get your executive level to believe in the power of data, and it breaks the bank in the execution.
There are consultants with lovely summer and winter homes who have paid for them “skipping” to the end and then back billing/building the solutions.
To insulate against catastrophic failure of a data-driven initiative we at Contemporary Analysis (CAN) have created a Data Hierarchy to help companies understand where they are and more importantly, where they are going. This understanding helps drive the strategy and vision needed to be successful. These levels are
(CAN) have created a Data Hierarchy to help companies understand where they are and more importantly, where they are going. This understanding helps drive the strategy and vision needed to be successful. These levels are:
Reporting: Tracking and “What happened?”
Business Intelligence: “What just happened?”
Descriptive Data: “Why did that happen?”
Predictive Data: “What is going to happen next?”
Prescriptive Data: “What should we do to make it happen?”
Omnipotent AI (Skynet): “Automated Doing of its own recommendations” a.k.a. “Terminator Movies”
Every business is trying to move “forward”. If you work for a company whose response is anything but “forward” or “more” start polishing up your resume, you’ll need it sooner than later.
Most companies are so focused on today’s business they don’t know what the path to the future looks like.
Imagine you tell a CEO you’re going to walk a mile to get another 1 million in sales. Most CEO’s would look at the distance and agree that a short distance is worth the time and effort to get the additional revenue.
You and your team(s) work feverishly to get from point A to point B as quickly as possible. You cross the finish line and there’s your 1 million. The CEO checks the box and there it is, project complete.
Now imagine if you told a CEO you’re going to get 20 million in sales. After the confused look and possible laughing subsides you tell them how. Instead of a mile, you have to walk 15 miles. But you’re not going to do them all in 1 year. Instead you’re going to walk that distance over 5-6 years. You’ll measure success with each mile you pass and each mile will result in ROI for the company.
You also let them know that you can cover the ground when and how you want to. If one mile is too tough to work in the time and effort this year, you postpone it to the next. If, as you’re walking, a business need changes and you need to walk a completely different direction you can. The steps remain the same but the road you use to get there is slightly different.
Understanding the long term goal allows you and your team(s) the ability to work smarter not harder. You’re building toward the vision at every turn so you have little to no wasted effort. And, because you’re building over time, you can staff accordingly for each mile and access the right talent at the right time
Part of CAN’s role is being that “Data Visionary” that helps you see over the horizon with possibilities. The hardest part of this whole process is getting the decision makers in an organization to embrace the culture of change.
“We’ve done it this way for __X__ years and it works just fine.” Is becoming the leading indicator of a dying business. If you’re 40 years old the technology available today wasn’t even conceptualized when you were in grade school. “We’ve done it this way for 50 years…” means you’re already behind the curve.
The posts that will follow will walk you through each level of the Business Data Hierarchy concept. We’ll be sure to include examples that are relatable. The subject matter can be a bit dry, so we’ll also make sure we include some humor along the way to keep things lively. We’re a Data Science Consulting firm..not monsters after all.
Posts will be made to our blog and to our LinkedIn page. We encourage you to share, re-post, forward, email, and contact us if you have questions at any time.
Contemporary Analysis had not one, but two of our guys speaking at InfoTec 2019!
Nate Watson, President of Contemporary Analysis, gave a talk about how to hire and retain Data Scientists. Data Scientists are some of the hardest people to find on the planet currently. Video of Nate talking to “Spaceman Tom” below:
Gordon Summers, our Chief Data Scientist, spoke about his book “Leading a Data Driven Organization: A Practical Guide to Transforming Yourself and Your Organization to Win the Data Science Revolution“. Gordon does a great job framing the importance of data driven decision making in today’s business setting.
The book is available on Amazon in both paperback and digital versions below:
CAN realized this years ago and that’s why we built the Omaha Data Science Academy. (ODSA) The Academy allows up and coming talent access to not only our cadre of instructors but a growing community of Data Scientists.
We had a great time meeting new people and reconnecting with old friends. AIM continues to put on great events to support the tech community in Omaha. We’re honored to be a part of it and looking forward to next year!
March 16th 2019 – Contemporary Analysis (CAN) sponsored the St Patrick’s Day Parade float for the Omaha Crawl for Cancer. Nate Watson, President of CAN, helped bring the Crawl for Cancer to Omaha and has been helping organize it ever since.
Here are just a few of the photos from the parade this weekend. Needless to say, we got into some Shenanigans and gave away over 5000 pieces of candy in the process!
Special thanks to all of the “Crawlenteers” who showed up to walk in the parade and hand out candy! See you this summer for the crawl!
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