In a world increasingly driven by data, key questions come up. What data matters? How does a company really take advantage of it? How do you know when you may be dealing with too much data? We asked Robert Moore, CEO of RJMetrics, to help us draw some lines around the tsunami of data inundating us.
Companies have always relied on data for business decisions. What is different about data today than a few years ago?
The depth and breadth and sheer volume of data about any given topic has grown in a very meaningful way. The price of storage has plummeted, so it now costs a whole lot less to store it and with cloud-based storage there is also a decreased cost for maintenance of the storage. The cost associated with collecting, storing, and transferring data is so extremely low that any company can afford to do it.
What are the sources of this data?
Companies can now accumulate billions of data points about the people who interact with their business. There are so many touchpoints with customers that have evolved over the last several years that did not exist before, thanks to the revolutions around mobile, online content marketing, and online retail in the way people make purchases and interact with retailers. It used to be at a website there might be a single analytics platform in the background keeping track of how many pages you visited and how much time you spent on each page. Now the analytics see so much more, and the intermingling of those data points is creating an extreme breadth of information that a company can know about its customers.
Why is this important?
It is important in that it changes behavior for the better. For example, if a retailer is aware that I have looked at a certain product in the past and they can deliver me an ad that is more relevant it makes everything more efficient. Advertising dollars are not being wasted. It contributes to my efficiency as a consumer, the efficiency of the advertising spend of the retailer, and the efficiency of the overall economy.
What are the keys to handling data?
There is a potential to waste energy in things that are not important. One thing we focus on is making sure that you don’t just look at data, but that you have very specific goals around data. And that you know the questions you are trying to answer and how those answers are going to change how you interact with the customer and how you develop your product. If you are not going into it with intent around a particular outcome, you get into this data fog and risk “analysis paralysis” where you are drowning in data and you don’t know what questions to ask.
What role will data play in the future of work?
One of the biggest impacts will be around the ability to make high, leveraged use of brilliant people’s time. There is a lot of plumbing and scaffolding that needs to be in place to make effective data-driven decisions. In the new economy of data tools are replacing 80 percent of that legwork. You can now use a platform in the cloud and rely on third party companies to take care of the data collection and transfer and modeling and presentation so your team can focus on asking the right questions.
How will this data evolution affect the future of work?
It is going to allow companies to be more efficient and grow faster. Ultimately that will result in more jobs being created, more economic activity, more wealth, and more efficiency. The question is what types of jobs these will be. What companies can do is to take the engineering talent that used to be responsible for data-related work and steer them back into innovation, creating novel ideas and core product initiatives. The number of people needed to do the data work will go down, but that doesn’t mean overall employment will go down. It empowers companies to employ more people in what are frankly more interesting positions.
How would you describe a successful data driven company?
The bigger question is whether data is really the secret to success for a lot of businesses. If you do not have products that people want to buy, or if you have cultural problems in your business, you are less likely to succeed even if you have an amazing data infrastructure. It boils down to product and execution, and data is a critical part of the execution. For a business that is not data driven, that does not mean you cannot be successful. It is like a 2×2 matrix. Are you good at data, yes or no, and do you have all the other stuff figured out, yes or no. You could be in one corner or another and be successful. But if it is no on both you are likely to fail, and if it is yes on both, you are likely to succeed.
How does an organization make judgments about data?
It centers around creating goals and specific questions that should be answered within workflows for people and how the data will get used. Combine that with the opportunism of accepting that you don’t know today what questions you might need to be asking tomorrow. In that way, you create workflows around data for your teams so they don’t drown in data. But make sure to collect data that you might need later, even if you don’t need it today. You can do that because storage is so inexpensive.
By collecting data you might need later, but don’t now, can you end up with too much data?
It is possible to store so much data that it has an economic effect, even as cheap as storage is. So you need to understand what data you want – such as about the populations interacting with your business – and what sources of data are more ephemeral. If you are interested in social media data, the last five days of it is more relevant than the last five years, the way social media changes. You need to recognize what information is going to be valuable in the long term, such as data tied to revenue-generating events, who bought what when from you, and where did they come from?
How will data reshape the CIO’s office?
The CIO is being recast as the chief innovation officer, though as always, they remain the arbiter of tools and technologies. That mandate has not changed, but the landscape of tools, and what is required to implement them, have changed. Assessing third party tools and techniques is becoming a larger share of the CIO’s job than the management of the people implementing them. It has gone from a problem of not having enough third party tools – so the CIO needs to hire people and build processes – to where we are now, with too many tools, so the CIO must decide what to use and what not to use. That’s an interesting evolution.
Your company appears to be mostly made up of millennials. Why is that?
I can sum up what millennials are looking for in their careers in one word: Impact. The reason we have been able to attract a workforce with a lot of millennials is that we are in the process of solving a big, challenging problem unique to the times we live in. We take advantage of the most exciting and new technology out there. As products like ours change the way businesses are allocating their workforce toward things that are more impactful and innovative, it dovetails extremely well with the desire of millennials to work in environments where that is the mandate. You get a virtuous cycle where people seek out companies with a lot of innovation, and that innovation is enabled by those same people.
Robert Moore is CEO and a co-founder of RJMetrics, a six-year-old Philadelphia-based company that offers an analytics platform designed to help online businesses make smarter decisions with their data.