Last month I talked about how the initial high of being able to capture and manipulate large volumes of data is fading and that we are collectively looking toward what is coming next. A significant part of this is a shift toward realizing the value of data quickly and intuitively. The possibilities that were once hidden deep within mountains of data, are just now being uncovered in ways that deliver competitive advantage. I believe one of the massive challenges still facing today’s businesses is around identifying the information that is valuable and turning it into ways that any stakeholder, whether business user or data analyst, can use it to maximize productivity. The biggest question related to the end goal is which path you take to get there.
Visualizing data is one capability and a powerful one that allows you to see your data on charts and graphs in ways that easily identify successes, problems and trends, among other things. It is being incorporated into more and more BI strategies to help drive revenue back to the bottom line by helping analysts’ reduce project costs or drive productivity, for instance. But without a strategic approach to obtaining answers for the day-to-day challenges facing organizations, failure is imminent. The key to being successful with visualizations – and for being successful across your entire BI strategy for that matter – is ensuring priorities are established. Consider this: before spending all of your money on a super sound system for your car, you may want to invest in a navigation system to ensure you can get where you want to go easily. The same can be said of any organization’s data strategy. Why invest in the bells and whistles if you haven’t yet determined the core problems you need to solve?
Every company looking at implementing an information system should be asking itself whether visualization is enough?
The simple answer is almost always, “No.”
In a recent column [link] I argued that most data in an organization can be presented three ways: Reporting, Dashboarding, and Visualization. The first goes to the rank-and-file, the second to management and the third to the company’s information analysts. As such, each has its own constituency arguing that it should be the priority recipient. More often than not, the analysts win this debate because they are the information experts in the organization and, increasingly, because Visualization has a hot currency at the moment.
The truth is that the prioritization is what will set apart the companies that succeed and those that are constantly playing catch-up. The crucial need in any enterprise is the effective dissemination of useful data to the people in the organization making important daily, even hourly, decisions about the near-term health of the company. And the best way to do this is to put into place automated systems that capture, process and distribute that data. In other words, Reporting.
Only after this function is in place and providing the information lifeblood to the organization, can you move on to the next priority which empowers management to track the metrics of the use of this information in an intuitive, productive way: Dashboarding.
Finally, when the company is making effective use of its information resources and management is keeping an eye on this effectiveness, the company has the luxury of taking the analysis of this information to a higher level. Now the company can look at it from different perspectives, experiment with different hypotheses and search for hidden (and potentially transformative) insights in the data: Visualization.
We begin with Reporting because it is largely automated, it has an immediate impact on the bottom line of the company, and because that effect can be empirically measured and the entire system fine-tuned for maximum impact. By comparison, Visualization is artisanal, hand-crafted and, to use the British term,bespoke. Its impact can be enormous but hard to predict or even incrementally fine tune.
This is not to belittle the art of visualizing business information. It has the potential to be a hugely powerful capability in a company’s BI toolkit. But if you are buying cars you don’t start with the Ferrari as an everyday driver — and only then buy the reliable station wagon. Instead, you take care of the basics – i.e, this quarter’s revenues, sales pipeline, marketing budgets, etc. — and then indulge in the luxury of looking for the break-out solution that will define your company five years hence.
Despite the obvious logic of this strategy I guarantee that a lot of companies out there will still start with Visualization tools – and then wonder why the results they were promised fail to appear. When it comes to Business Information technology, rationality often takes a back seat to novelty and corporate politics. Senior management wants Visualization because they hear it is the next big thing. And information analysts, like the IT professionals of old, often have undue influence on corporate decision-making when it comes to anything having to do with data.
So how can companies keep their BI priorities straight? A very good solution is one that we’ve discussed often recently: establish the office of Chief Data Officer and give that person ultimate control over the flow of all data inside the company. Because he or she has responsibility for making the most effective distribution and use of company data, the CDO alone is in a position to bring some rationality to those priorities. In the long run, just this decision – and the savings on misdirected or premature purchasing decisions — will pay for the creation of this new C-level job.