Data is cheap; strategy still matters by Jason Lee
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The document outlines Bain & Company's insights on leveraging big data and analytics to improve business operations and outcomes. It discusses the importance of strategy, data governance, and organizational capabilities in driving value from analytics investments. It highlights case studies from various sectors illustrating challenges faced by companies and the need for effective data management and usage to enhance decision-making processes.
Data is cheap; strategy still matters by Jason Lee
- 1. Big Data Day LA 2017 Data is cheap, strategy matters
- 2. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 2 Jason 1991 U of Utah GSB: consumer decision making & quantitative methods & start working with Jordan Louviere, āgodfatherā of discrete choice modelling (conjoint) 1997 2002 2008 2011 2016 Australia on projects for Qantas, NAB, Telstra, etc.; startup Test & Learn platform for online marketing optimization; start up automated data mining BAIN & COMPANY as a specialist in primary research & marketing analytics; develop Bain's Net Promoter Score analytics platform MANAGER in growing analytics team; HBR article with Eric Almquist "What do customers really want?ā SENIOR MANAGER; building advanced analytic team, test & learn and data science capabilities PRINCIPAL; upgrading operations and supply chain analytics capabilities
- 3. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 3 Bain capability areas Results Delivery Strategy Customer Strategy and Marketing Performance Improvement M&A/Corporate Finance Organization Information Technology Digital Advanced Analytics
- 4. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 4 We support our clients to realize the potential of Big Data / Advanced Analytics, answering four questions Org & capability development Results delivery How can Advanced Analytics help us improve products and processes? How can our data assets help us transform our existing business? Enter new ones? Advanced Analytics StrategyAdvanced Analytics Decision Support Business Outcomes How do we manage the change process? How do we develop our organization and capabilities to enable our strategy? 2 4 1 3
- 5. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 5 BIG DATA AND ANALYTICS IS DISRUPTING BUSINESS PROCESSES AND MODELS ā72% of companies predict their industry will be affected in the next three years.ā HBR research 2016 āAI may soon replace even the most elite consultants.ā HBR article July 24,2017 āJeff Bezos overtakes Bill Gates to become world's richest man.ā Forbes, July 27, 2017
- 6. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 6
- 7. HOTEL CO UTILITY CO RETAILER CO
- 8. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 8 HOTEL CO NEEDED A NEW MODEL ARCHITECTURE AND WAY OF WORKING TO DRIVE ADOPTION Major performance improvement program with increased focus on Customers and Marketing Centralize Direct Marketing analytics and adopt best practices and increase coordination across properties SITUATION COMPLICATION Growing Advanced Analytics team building improved and increasingly complex models Stakeholder mistrust and Analytics team defensiveness Model complexity and lack of documentation make it difficult to scale, evaluate & communicate
- 9. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 9 UTILITY CO STRUGGLED TO DELIVER VALUE FROM DATA AND ANALYTICS INVESTMENTS Utility Co on multi-year journey to reduce operations costs and improve customer experience CEO frustrated at lack of results to show for its Advanced Analytics credentials and āBig Dataā projects SITUATION Lack of coordination across business unitsCOMPLICATION No clear strategy to prioritize and monitor analytics use cases Data is siloed and Data Science talent dispersed
- 10. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 10 RETAILER CO. NEEDED NEW TOOLS TO STAY AHEAD OF SUPPLIERS AND COMPETITORS SITUATION Retail Co. has long history of year or year cost cutting, but facing increasing price competition Suppliers increasingly sophisticated; Buyers need new tools to support negotiations Data was inconsistent and lacked clear ownershipCOMPLICATION Buyers were not using all the data they could to improve negotiation outcomes Lack of tools to support insight discovery
- 11. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 11 MOST BUSINESSES ARE STRUGGLING TO CAPTURE VALUE FROM THEIR BIG DATA AND ANALYTICS INVESTMENTS Companies deploying into production Companies investing in big data āMany big data projects don't have a tangible ROI that can be determined upfrontā āLack of effective business leadership or involvement in data initiativesā āPilots and experiments are built with ad- hoc technologies and infrastructure that are not created with production-level reliability in mindā Gartner October, 2016
- 12. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 12 MAJORITY OF ANALYTICS TIME IS SPENT ACCESSING, JOINING, PREPARING, CLEANING OUR CLIENTSā DATA Analytical time spent on data preparation
- 13. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 13 What we frequently hear from our clientsā¦ ā¦ and the root causes that typically go unseen! āIt should not take weeks to get this information!ā Lack of strategy Poor data governance Over complexity Lack of ownership Poorly integrated systems Data & analytics silos āWe need a single view of the customer!ā Underinvestment in data engineering Culture & org structure
- 14. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 14 INSIGHTS ADOPTION Incorporate insights and prompt decisions DATA VIZ AND DELIVERY Insights, Interactive reports, and Visualization DATA SCIENCE Talent & tools Balance rigor with complexity DATA ENGINEERING Get the data right: what, how, when Clear strategy to select and solve concrete problems BUSINESS CONTEXT VALUE FROM ANALYTICS AND DATA IS ONLY AS GOOD AS THE WEAKEST LINK BEHAVIOR, CULTURE & PROCESS CHANGE
- 15. HOTEL CO UTILITY CO RETAILER CO
- 16. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 16 HOTEL COās REVAMPED āECOSYSTEMā IMPROVED PERFORMANCE, ADOPTION, AND VALUE BUSINESS CONTEXT DATA ENGINEERING DATA SCIENCE DATA VIZ AND DELIVERY ā¢ Build collaborative model of engagement between CoE and SteerCo to ensure alignment among stakeholders and a shared path forward ā¢ Enable dialogue with IT on ongoing requirements to improve hardware and systems performance (e.g., QA, disk space, memory) ā¢ Improve the efficiency of the model through simplification and increased automation, improved responsiveness, added discipline INSIGHTS ADOPTION ā¢ Foster transparency through formalized communication processes ā¢ Unit leaders own the model impact on unit objectives ā¢ Faster and standardized reporting, frontline metrics ā¢ Sharable materials (e.g., data dictionary, model summaries, validation docs)
- 17. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 17 UTILITY COās NEW ANALYTICS COUNCIL BROKE ORGANAZION SILOS TO PRIORITIZE USE CASES AND MONITOR IMPACT BUSINESS CONTEXT DATA ENGINEERING DATA SCIENCE DATA VIZ AND DELIVERY ā¢ Steering committee identifies and prioritizes use cases and monitors impact ā¢ Audit of existing and potential data sources across business units ā¢ Deliver Value from combining and adding new data sources ā¢ Pilot āHub and Spokeā Analytics Council to coordinate and collaborate across business units INSIGHTS ADOPTION ā¢ Deliver code for production models ā¢ Interim dashboards and decision support tools ā¢ Translate model performance and insights into frontline metrics ā¢ Interactive visualizations for validation and common view of ātruthā
- 18. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 18 RETAILER CO NEGOTIATED DOWN SUPPLIER COSTS WITH HIGH IMPACT VIZUALIZATION TOOLS AND ON-DEMAND METRICS BUSINESS CONTEXT DATA ENGINEERING DATA SCIENCE DATA VIZ AND DELIVERY ā¢ Drive cost reduction by empowering buyers with new and better information on SKU performance ā¢ Connect Household transaction data to Buyersā SKU cost data ā¢ Develop innovative metric to measure SKU substitutability INSIGHTS ADOPTION ā¢ Buyers use dashboards before and during negotiations to drive cost savings ā¢ Build dashboards allowing buyers to visualize SKU opportunities and demonstrate results in supplier negotiations
- 19. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 19 STRATEGY STILL MATTERS ā While data and computational power are increasing, people and organizations have limited attention and energy ā Focus is key DATA ARCHITECTURE, GOVERNANCE, AND ENGINEERING ARE HIGHLY UNDERVALUED - Take up more than 50% of the effort and are core to analytics success COMPLEXITY CAN KILL ā not so much in the model itself but in how it affects processes and decisions PEOPLE MATTER ā for success analytics needs to consider the impacts on employees and customers FINAL NOTES Winning with Big Data is about STRATEGY, CULTURE, ORGANIZATIONAL CAPABILITIES, and governs the way we implement algorithmsā¦
- 20. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 20
- 21. This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent DRAFT