I've written quite a bit about unsuccessful Information Engineering projects; now I want to write about a successful one.
How can you change a company? Give people the information they need to make decisions they never thought they could and that changes how they think about the enterprise. The trouble is, any organization will put up a lot of resistance to change.
In 2002 I managed a Life-Time Value (LTV) project at a Large Telecommunications Company (LTC) that did change the enterprise. LTV is an attempt to measure the overall economic impact of each customer to the enterprise over their expected life. Ideally this is concrete numeric data so we can ask “Is this customer worth $300 in new equipment for them if they will stay with us for two more years”?
The LTV project allowed people to think about the business in new ways, the project was embraced by the Chief Marketing Officer, and the project saved $15 million each year in direct marketing costs while adding to the revenue from marketing programs simply by not spending money to retain customers that LTC was losing money on.
There are a lot of articles about how to do LTV calculations. This time I want to talk about all the corporate politics around sheparding the LTV project to success.
Showing posts with label information. Show all posts
Showing posts with label information. Show all posts
Sunday, March 30, 2008
Friday, March 21, 2008
Good Data, Bad Decisions
Barnaby S. Donlon in the BI Review (http://www.bireview.com/bnews/10000989-1.html) gives a good description of how data goes to information, to knowledge, and then to decisions. He's saying all the right things, and all the things I've been hearing for years, but you know -- I don't think it works anything like that.
When we start with the data, it's all too much. It's too easy to generate endless ideas, endless leads, endless stories. I've seen it happen when an organization suddenly gets analytic capability.
Before, the organization was very limited in it's abilities to make decisions because they had limited information. The organizational leaders have ideas, and because of the lack of information they have no way of deciding what is a good idea or a bad idea. After the organization starts an analytic department, then suddenly every idea that the leadership gets can be investigated. The paradoxical result is that the leadership still can't make informed decisions. Every idea generates an analysis, and virtually every analysis can generate some kind of results. Without data, the result is inertia; with too much data the result is tail-chasing.
The right way to do this is to begin with the end. Think about the decisions that need to be made. Then think about how to make those decisions in the best possible way. Starting with the end means the beginning -- the data, the analysis, the information -- is focused and effective.
When we start with the data, it's all too much. It's too easy to generate endless ideas, endless leads, endless stories. I've seen it happen when an organization suddenly gets analytic capability.
Before, the organization was very limited in it's abilities to make decisions because they had limited information. The organizational leaders have ideas, and because of the lack of information they have no way of deciding what is a good idea or a bad idea. After the organization starts an analytic department, then suddenly every idea that the leadership gets can be investigated. The paradoxical result is that the leadership still can't make informed decisions. Every idea generates an analysis, and virtually every analysis can generate some kind of results. Without data, the result is inertia; with too much data the result is tail-chasing.
The right way to do this is to begin with the end. Think about the decisions that need to be made. Then think about how to make those decisions in the best possible way. Starting with the end means the beginning -- the data, the analysis, the information -- is focused and effective.
Information Design: What does it take to be successful?
All of the examples that I have given are of poor information design. Some of them have had more or less success, but they all had substantial flaws. There's a reason I'm saying that information design is a missing profession.
Why is it so hard? First off, true information design projects are fairly rare. BI is usually about straightforwards reporting and ad-hoc analysis. People don't get much of a chance to practice the discipline.
Information design requires a lot of other disciplines. It takes statistics but isn't limited to statistics. Data mining can help but can easily bog down a project in complicated solutions. It requires being able to think about information in very sophisticated ways and then turn around and think about information very naively.
It requires knowing the nuances of an organization. Who are the clients? The users? What is the organizational culture? What does the organization know about itself? What does the organization strongly believe that just isn't so? It's not impossible for an outside consultant to come in and do information design, but it is impossible for a company to come it with a one-size-fits-all solution. When it comes to information design, one size fits one.
Because the profession of information design hasn't been developed yet, it isn't included in project plans and proposals. For two of the projects above information design wasn't even thought of and for the third it wasn't done well because the clients true needs weren't uncovered.
Why is it so hard? First off, true information design projects are fairly rare. BI is usually about straightforwards reporting and ad-hoc analysis. People don't get much of a chance to practice the discipline.
Information design requires a lot of other disciplines. It takes statistics but isn't limited to statistics. Data mining can help but can easily bog down a project in complicated solutions. It requires being able to think about information in very sophisticated ways and then turn around and think about information very naively.
It requires knowing the nuances of an organization. Who are the clients? The users? What is the organizational culture? What does the organization know about itself? What does the organization strongly believe that just isn't so? It's not impossible for an outside consultant to come in and do information design, but it is impossible for a company to come it with a one-size-fits-all solution. When it comes to information design, one size fits one.
Because the profession of information design hasn't been developed yet, it isn't included in project plans and proposals. For two of the projects above information design wasn't even thought of and for the third it wasn't done well because the clients true needs weren't uncovered.
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