A: There needs to be a strong focus on data governance and analytics guidance. You need to consider what guardrails and best practices you’re going to put in place in your organization or team.
Data governance is like a playbook for the company that determines rules for how each team will use data. If you don't have data governance in place, you may have one group that defines the variable one way, another group that defines the variable a different way, and the two won’t ever come together in reporting, let alone analytics.
Companies also need to focus on building a strategy first, not on collecting data first. A lot of organizations will say, "We've got a data lake, capture everything and dump it there. We'll find amazing insight into our customers and customer journey." You’ll never get to insights that will lead you to action that improve business results. Instead, if you say, "Hey, we need to increase online sales by 50 percent in 2020," all of a sudden, it's going to have a downstream effect. You’ll know what data to collect and analyze to get insights that improve business outcomes. So start with a strategy.
And then there are going to be probably three to five key business objectives, or KBOs. The five levers that are going to influence that strategy.
You could almost think of it like a car. Your strategy is to drive from Anaheim to San Francisco. There are a few key levers in the car, like the gas pedal, and getting the car itself. Your strategy is to get in the car and go, and you've got a key business objective to stick your foot on the gas pedal and go.
And within a KBO, you have KPIs. What are the key performance indicators that your key business objective is influencing your strategy? Going back to the car example, when you hit the gas, you have a KPI gauge of how fast you’re going — the speedometer. And your miles per hour is a KPI that you can potentially track.
So you need a strategy, three to five KBOs and then probably no more than three to five KPIs for each KBO. Once you have that in place, you're going to define the tactics that you need to take to influence every KPI. For instance, a retailer has determined that they needed to grow online revenue by 50 percent. One of their key business objectives would probably be to increase average order value by X percent. So you’re going to look at the KPI for average order value. And what are the tactics to take to actually accomplish that? Is it going to be cross-selling in the order cart process? Is it going to be discounts in promo codes you email out? Those are the tactics that you apply. So if you funnel all that down, you figure out what you're going to do. Then you collect all the data on all those tactics, all those engagements that you create, and all that funnels right back up to support the strategy.