Data Alone Is Not Enough

The Limitations of Data and Analytics

"I'm a data person." I have identified as a data person for the last decade, and recently, I realized that's a lie. I am not a data person because data people are in denial. 

For years, data teams have been working towards making better tools to make it easier to consume analytics. They have been working harder and harder towards self-serve analytics and reporting. But the reality is that better data and better analytics is the wrong goal. Reporting is a gateway drug, but more than reporting, analytics, and visibility alone will be required to drive change in a company. We need to focus on being more efficient, on being more profitable, and on building better organizations- on driving actual organizational change. 

Reporting, visualization, and analytics are helpful because, when done exceptionally well, they can help you understand where to direct your focus. Still, analytics, in themselves, do not drive changes. Knowing that your conversion rate is going down does nothing to improve your conversion rate. Understanding which marketing campaigns are working well does nothing to help you understand where to allocate your future marketing dollars- and it most certainly does not answer the "why" question. Why is a particular marketing campaign outperforming others? No reporting is going to tell you that. 

Data initiatives are too focused on democratizing access to information and not focused enough on driving business impact. No amount of information will alone drive change in an org. For meaningful change, companies need their information tied to the tooling that allows them to drive change. 

Don't identify actionable insights; take action.

Data and analytics teams have become increasingly important in organizations in recent years. Data teams are piecing together data in the warehouse because companies are scattered across systems. Data teams are often an arms-length away from the actual work and the data being generated. To build relationships with stakeholders and domain experts who are doing the work, data teams must do a significant amount of reporting. This reporting work is fine when it's a part of toll-paying to eventually move up the data team maturity scale into insights and predictions. Still, with so many data sets and across many functions in a company, many teams never break out of their reporting roles. 

So, for everyone else in a company, I ask you this: stop waiting for some report to save you. Stop being at the mercy of your data team. Stop asking them for numbers because the numbers won't do anything. Instead, focus on what results you’re trying to drive toward.

If our overall conversion rate is down, I want to see if there are any trends in the demos where it's down or if it's an overall decrease. If it's across the board, let's see if there were any changes to the checkout process or website that align with the timeline of the change. Oh, we ask for login at the top of the checkout process now instead of at the end? Great, let's revert. 

Our margins on our goods are getting better lot over lot, but this last one is super high. Even if a data person catches this, it is unlikely they have the context to address this. The data doesn't include that you had to pay a rush delivery fee because some packaging got lost, but you know that, and you've already addressed the root cause problem. 

Data is only valuable when strategically used to improve efficiency, profitability, business growth, and better organizations. This requires setting clear goals, identifying actionable insights, and prioritizing initiatives based on their potential impact. But if data is wholly divorced from the work of the business, then reporting is just a distraction. 

Instead of Asking Better Questions, Identify Target Outcomes

For companies with physical goods, where inventory is the most considerable expense, finance and operations professionals play a critical role in ensuring the company has the right amount of inventory to cover demand while keeping costs under control. As we like to say: not enough inventory = lost sales, too much inventory = tied up resources. 

While data and reporting are important tools for these professionals, their time would be better spent identifying target outcomes instead of just asking better questions about data. As Taylor Murphy wrote, "A 1st order need is one that is critical to the functioning of the company" and data is a second order need. By focusing on clear outcomes, finance and operations professionals can work towards achieving these outcomes and driving the business forward- without losing time to anticipating all the ways they might want to slice and dice a data set. This more practical approach allows the business to prioritize actions and make data-driven decisions that align with the company's overall strategy rather than getting bogged down in the details of data and reporting.

Better visibility is rarely the answer. When you do the work day in and day out, you already have a sense of the answer. In all my years of working in data, I’ve seen over and over that data is usually only confirmatory and is rarely groundbreaking. You might not have known if the volume was 10 or 10.2 K, but you knew what the right answer was kinda sorta.

Moving to action

At Turbine, we're building financial software for companies with physical inventory. We want to address these problems by the ability to actually drive changes in an org, not just look at pretty charts.

If you're tired of talking about metrics and ready to focus on driving changes, sign up for our waitlist or drop us a note at hello@helloturbine.com, and take a step towards driving actual changes in your organization today.