Inside the Biz with Jill Dyche

Are You Really Ready for Data Governance?

In which Jill makes excuses for people who make excuses.

Fall conference season has (mercifully) come to an end, and I can finally reflect on what I learned on my most recent tour of industry and vendor events.

(Editorial aside: I don’t know about you but I like Vegas, I love New Orleans, and if I see Orlando again it’ll be too soon. Note to conference organizers as you finalize your 2010 event planning: The Big Easy still needs our cash!  Let’s go back. The jambalaya’s on me!)

Anyway, I’ve been speaking and writing a lot about data governance, and presentations at TDWI, SAS, Teradata, and various clients have placed me squarely in the crosshairs of people aiming for effective data governance programs. It’s interesting to hear their questions, particularly as they voice concerns about data governance adoption in their organizations. One question I get in almost every session is a variation of this one:

Alright Miss Fancy Pants, why is it that every time a so-called expert talks about a major business initiative they bring up change management? Why can’t we just launch data governance without all the change management fanfare? Why can’t we just ‘get ‘er done?’

Answer: I don’t know, why can’t you? Or, more aptly, why haven’t you?  Not trying to be argumentative here, but 1) my pants are just black wool crepe, trouser-cut, which I think is more understated than fancy, and 2) it’s just that the most effective data governance programs are often also the most disruptive. And, simply put, disruption makes people nervous.

Professor Robert E. Quinn at the University of Michigan Ross School of Business writes about taking people out of their “normal states” (aka, their comfort zones) and painting a picture of what they need to do. In a seminal Harvard Business Review article in 2005 called “Moments of Greatness: Entering the Fundamental State of Leadership,” Quinn described true leaders as ready to “venture beyond familiar territory to pursue ambitious new outcomes.” If that’s not data governance, I don’t know what is.

After all, the “normal state” in most companies often means contradictory policies, multiple versions of the truth, absence of true data ownership, selective collaboration, and decision-making in a vacuum. Data governance is the opposite of all that.

“We couldn’t afford to experiment with data governance,” says Kevin Davis, Director of Research Initiatives at a major southeast retailer. “We retained a consulting firm to teach us the foundational stuff and we followed their advice. That included a lot of deliberate structure, education, evangelizing, and expectations management.” Davis and his team faced the additional challenge of coupling their company’s new data governance strategy with a major MDM technology acquisition. “We knew we only had one shot at getting it right,” he says.

True, it’s easier to avoid sticking your neck out. And in some cultures (particularly in high-tech companies, but that’s another blog post altogether) wholesale changes to policies and processes can actually begin from the bottom-up. It’s not only less disruptive, it demonstrates value to incent widespread adoption. Bottom-up data governance is a legitimate and proven approach. But at the end of the day, your strategy needs to include a plan to broaden governance beyond the initial domain. After all if you’re not sharing data across organizations and business processes you don’t need data governance.

According to Professor Quinn, change happens when someone is “jolted out of his comfort zone…driven to clarify the result he wanted to create, to act courageously from his core values, to surrender his self-interest to the collective good, and to open himself up to learning in real-time.”

Are you ready to get out of your comfort zone? Then maybe you are ready for data governance!

(P.S.: I’m discussing data governance yet again with Initiate Systems CTO Marty Moseley in a December 3rd webcast. Register here!)

Photo by p_x_g via Flickr (Creative Commons License)

They’re Baaaack! IT Spending in Retail Returns

In which Jill peeks into the pipeline—and sees retail for a change!

In the arena of retailing, we’re all players. But many of us are also spectators, sitting high up in the stands and watching as the game plays out. Lately, the retailing game has been a blood sport, and household names—Circuit City, The Sharper Image, and Linens n’ Things among them—have been casualties.

We’ve been working with retailers since Walmart got its first data warehouse (my partner, Evan, was one of the system engineers on their first Teradata installation), since Kmart beamed POS data over satellites, and the apocryphal diapers-and-beer saga went mainstream. In those early days, it was all about analyzing POS data. Subsequent merchandise management and supplier exchange initiatives cemented the need for IT as both a strategic and operational enabler.

In the early 2000s, as they struggled to implement customer loyalty programs and endured criticism for over-investing in CRM technologies, retailers curtailed their IT spending. They had data warehouses—often several—and kept their attention focused on enterprise applications and e-business capabilities. With the exception of some beleaguered grocers and a sprinkling of catalog companies, we didn’t see many retailers spending on either consulting services or new software solutions.

But things are changing in retail, due in large part to five key areas that retailing executives have earmarked as strategic priorities:

Social media: It’s one thing to create a corporate avatar, set up a Twitter account, and lure customers to your Facebook fan page. It’s another thing altogether to proactively collaborate with customers on product ideas, garner feedback on service improvements, cement your brand messaging, and monitor the buzz. Retailers are getting serious about social media. After JCPenney ran a contest asking customers to post photos in their Penney-purchased apparel, the retailer’s Facebook fan base began increasing by a few thousand a day. “It’s a much more significant part of our marketing mix and it will continue to be a bigger part of our marketing mix,” said a Penney exec about social media.

Survey software: Put simply, retailers are formalizing feedback mechanisms, and executing on their findings. Several retailers we work with have announced new “Voice of the Customer” programs, driven by C-level executives. While most large retailers continue to rely on market research, they’re combining it with customer surveys at the time of purchase in their brick-and-mortar locations as well as on-line. Discounts on future purchases not only get customers coming back, but shopping via different channels—customers who shop across multiple channels are known to be more profitable—thus increasing the retailer’s share of wallet.

Master Data Management: Retailers not only need to manage customer relationships, they must share that data across sales channels, locations, and brands. Retailers came late to the MDM party but they’ve taken a seat and are listening to the music. More than ever, retailing executives are seeing the business impact of so many silo-ed applications and are mandating a “single view” of their customers. MDM not only promises to help retailers harmonize individual customer records across channels and brands, it helps them reconcile their product catalogs and store locations and standardize pricing. Welcome to MDM, retailers, pull up a chair!

Retail in the cloud: Retailers still hamstrung by headcount and IT budget cuts are turning toward the software as service (SaaS) model to enhance both operational and analytic capabilities. Many are looking to hosted services companies like PivotLink and Retail Solutions to deliver self-service, web-based analytics or to provide POS and inventory data to suppliers. Larger retailers may look to outsource customer identification and data enrichment functions by leveraging third-party providers like Acxiom. Mid-market retailers in particular have been looking to the cloud to enhance their reporting and data quality capabilities without adding headcount or hardware.

On-demand reporting: As they increasingly compete on service, retailers are exploring ways to deliver customer intelligence to front-line sales staff. “We use a range of analysis tools, from basic reporting to statistical modeling tools,” explains Kakoli Seal, Vice President of Customer Insight and Database Marketing at Saks 5th Avenue. “But getting information into the hands of our sales associates so they can deliver superior service is a priority.” Saks 5th Avenue uses sophisticated clienteling software to deliver customer contact and other details to its associates. Similarly, a specialty retailer uses mobile dashboard vendor Webalo to deliver purchase history to sales associates, thus enabling them to advise customers as they shop.

With all the emerging technology hoopla, retailers are still focused on two main issues: managing inventory levels and retaining customers. Both involve a little art, a little science, and leaders who are willing to question established industry norms. Indeed the days of unwieldy enterprise applications and IT infrastructure overhauls are a thing of the past in retailing. In their quest to be nimble, retailers are seeking new solutions—and fast.

Interested in learning more about how retailers are re-embracing business intelligence? Read Jill Dyché’s latest white paper: Information for Everyone: BI Evolving in Retail. Download the paper here.

photo by NNECAPA via Flickr (under Creative Commons license)