Will Data-Driven Organizations Please Stand Up

After exper­i­ment­ing with my own per­sonal blog over the past year, I fig­ured it was about time that I ven­tured into the world of cor­po­rate blog­ging. Some of you may have had the oppor­tu­nity of attend­ing my Omni­ture Sum­mit 2009 pre­sen­ta­tion on the “7 Keys to Cre­at­ing a Data-Driven Orga­ni­za­tion”. Oth­ers of you may have seen the same pre­sen­ta­tion as a free web­cast pro­vided by our mar­ket­ing team.

Through an upcom­ing series of arti­cles, I will exam­ine each of the seven key suc­cess fac­tors of data-driven orga­ni­za­tions in more detail. But before I do this, I want to dis­cuss why being data-driven is more impor­tant than ever for orga­ni­za­tions and why so many com­pa­nies still strug­gle with it.

Why Be “Data-Driven”?

In times of eco­nomic growth like we expe­ri­enced from 2005–2007, too many mar­ket­ing deci­sions were made based on intu­ition and gut instinct. Too fre­quently mar­ket­ing ini­tia­tives were not tied to suc­cess met­rics or even mea­sured at all. Hold­ing peo­ple account­able would have inter­fered with work­ing on the next big project or cam­paign. Between the abun­dance of “low-hanging fruit” and the sheer vol­ume of work to be done, mis­takes could be masked or con­ve­niently over­looked.

Now with the recent eco­nomic down­turn, com­pa­nies are being forced to scru­ti­nize their mar­ket­ing spend­ing more closely. Many CMOs have had to sig­nif­i­cantly cut their adver­tis­ing bud­gets, and they have to do more with less. They want to under­stand which cam­paigns, mar­ket­ing chan­nels, and online con­tent are the most effec­tive so they can get the most “bang” for their mar­ket­ing dol­lars. In addi­tion, more and more adver­tis­ers are shift­ing bud­get away from tra­di­tional chan­nels to more mea­sur­able dig­i­tal chan­nels such as paid search, email, social media, etc. In a down econ­omy, data is prov­ing to be a marketer’s new friend.

Why Is It So Dif­fi­cult to Be Data-Driven?

In my five years as an Omni­ture con­sul­tant work­ing with sev­eral For­tune 500 com­pa­nies, I’ve repeat­edly seen how orga­ni­za­tional issues — not nec­es­sar­ily tech­ni­cal ones — have impeded the suc­cess of many well-meaning com­pa­nies in the area of web ana­lyt­ics. Becom­ing data-driven requires more than just tools or tech­nol­ogy — it requires sup­port­ing processes and peo­ple. Too often com­pa­nies obtain the nec­es­sary tech­nol­ogy but don’t add suf­fi­cient resources or make changes to their exist­ing inter­nal processes or culture.

Web Ana­lyt­ics / Gar­den Analogy

When dis­cussing the chal­lenges that orga­ni­za­tions face in becom­ing data-driven, I like to com­pare web ana­lyt­ics to gar­den­ing. Just like in gar­den­ing, peo­ple, processes, and tools are equally impor­tant in web ana­lyt­ics. By con­sid­er­ing all three areas, com­pa­nies are more inclined to become data-driven and suc­cess­ful in even a down economy.

Peo­ple

Look­ing at the “peo­ple” aspects of gar­den­ing, you have the own­ers of the gar­den (senior exec­u­tives) who deter­mine what the pri­or­i­ties are for the upcom­ing “har­vest” (report­ing and analy­sis). They deter­mine what “crops” (data or reports) are needed to sus­tain the orga­ni­za­tion. Sec­ond, you have the actual gar­den­ers (tech­ni­cal staff) who grow the desired fruit or veg­etable plants (imple­ment the tag­ging strat­egy). Third, you have the har­vesters (busi­ness ana­lysts) who col­lect and dis­trib­ute the “pro­duce” to the orga­ni­za­tion when they’re ripe.

I have seen com­pa­nies run into prob­lems when exec­u­tives do not par­tic­i­pate in defin­ing busi­ness require­ments or decid­ing what data is needed. After the “har­vest­ing” has occurred, it’s painful to find out from exec­u­tives that key reports or met­rics are miss­ing. I’ve also seen cases where com­pa­nies don’t have suf­fi­cient or effec­tive har­vesters — leav­ing valu­able data to “rot on the vine”.

Processes

Sim­i­lar to gar­den­ing, processes are equally impor­tant to web ana­lyt­ics. Besides plant­ing (imple­men­ta­tion) and har­vest­ing (data analy­sis), there are sev­eral other processes that impact the suc­cess of web ana­lyt­ics at an orga­ni­za­tion. Your web ana­lyt­ics may need to be “weeded” (data val­i­da­tion) on a reg­u­lar basis to ensure that the data is accu­rate. A con­sis­tent “water­ing” (train­ing) sched­ule may be impor­tant to data adop­tion within your com­pany. Just like in gar­den­ing if you skip a key step in web ana­lyt­ics, it can under­mine a lot of hard work in other areas. What’s the point of plant­ing an exten­sive gar­den if you’re not will­ing water or weed it?

From an over­ar­ch­ing process per­spec­tive, it may also be impor­tant to think of your web ana­lyt­ics as an ongo­ing pro­gram rather than just a one-time ini­tia­tive. Some com­pa­nies may feel as though they have insti­tuted a web ana­lyt­ics “pro­gram” but have really just launched their web ana­lyt­ics as a “project” (e.g., no train­ing or require­ments gath­er­ing after the ini­tial launch).

Tools

When I refer to “tools” of a data-driven orga­ni­za­tion, I am refer­ring to more than just enabling tech­nolo­gies such as Site­Cat­a­lyst or Dis­cover. These prod­ucts may be the shovel or hoe of web ana­lyt­ics, but I con­sider other uten­sils to be equally impor­tant to estab­lish­ing and main­tain­ing a suc­cess­ful web ana­lyt­ics pro­gram. For exam­ple, a web mea­sure­ment strat­egy is a valu­able doc­u­ment in ensur­ing a company’s online ini­tia­tives are aligned with its over­all objec­tives and appro­pri­ate KPIs are pre­de­fined for mea­sur­ing per­for­mance. In addi­tion, larger orga­ni­za­tions may ben­e­fit from a cor­po­rate stan­dards doc­u­ment that defines how vari­ables are allo­cated and how page tags are to be instru­mented. Indeed, there are many com­ple­men­tary tools — out­side of the actual ana­lyt­i­cal tools them­selves — which con­tribute to the suc­cess of peo­ple and processes at data-driven companies.

Author Rud­yard Kipling once stated, “Gar­dens are not made by singing ‘Oh, how beau­ti­ful,’ and sit­ting in the shade.” Get­ting your web ana­lyt­ics pro­gram in order and cre­at­ing a data-driven com­pany is going to require some work. In my next blog post, I will exam­ine the first key to cre­at­ing a data-driven com­pany — secur­ing an exec­u­tive spon­sor.