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How to create a data-driven dynasty Best Practices Guide How to create a data-driven dynasty Identifying key focus areas to foster a more data-centric environment and generate increased ROI from digital analytics investments Today, most companies rely on digital analytics tools to measure the performance of their online marketing initiatives, such as websites, campaigns, mobile applications, and so on. Although most marketers understand the value of data and have a strong desire to become more data-driven, many organizations still struggle to tap into the full potential of their digital analytics investments. In many ways, executives at these companies may feel as though they’re still waiting for the promised returns from these powerful, but often underutilized tools. In their data-driven journey, some organizations have realized that simply having a digital analytics tool in place is not enough. Indeed, technology is only one of several key factors needed to be successful in digital analytics. This white paper is designed to help executives identify key focus areas that can foster a more data- centric environment and generate a greater return from their digital analytics investment. And it provides digital analytics practitioners with strategies for overcoming common challenges that may limit the adoption of digital data and the success of a digital analytics program.Contents In this paper, you will be introduced to a new digital governance framework and maturity model that will1: Playing or playing to win help you in establishing a best-in-class digital analytics practice and data-driven culture at your2: Parallels between sports and organization. We explore several key factors—leadership, strategy, people, process, technology, and digital analytics organizational dynamics—that contribute to the long-term success of any digital analytics program.3: Building a data-driven dynasty These concepts were developed and refined by working with hundreds of companies at different stages3: A balanced approach in their digital analytics maturity. Although each organization faces unique challenges in its data-driven4: Digital governance factors journey, these concepts and best practices will help you identify critical gaps and deficiencies in your11: The path to a data-driven dynasty current approach, and provide a guide for establishing a data-driven dynasty at your company. If you12: Common pitfalls along the data- want to use digital data to inform decision-making and optimization efforts, this paper lays a crucial driven journey foundation for accomplishing these goals.13: Laying a solid foundation14: Case study: Skandinaviska Enskilda Bank Playing or playing to win15: Building a roadmap for your data- When it comes to digital analytics, is your company playing or playing to win? There is a difference. As driven dynasty any avid sports fan can attest, there are many professional sports teams that field a team of players year15: About the Author after year but don’t achieve much success—especially not postseason success. One wonders if the team has a long-term game plan. Some team owners appear to be content with mediocrity — and even when losing money in the process. On the other hand, there are some sports teams that strive for something higher—to become champions and in some unique cases—dynasties. The National Hockey League’s (NHL’s) Edmonton Oilers won five Stanley Cups (1984–90). The Chicago Bulls won six National Basketball Association (NBA) championships in eight years (1991-98). Michael Schumacher and his Ferrari team won five straight Formula One World Championships (2000-04). Why were these teams so successful? You might say having superstars like Michael Jordan and Wayne Gretzky probably didn’t hurt. However, before you drop everything to recruit an analytics all-star, consider how the Bulls and the Oilers went seven and five years, respectively, with their superstar players before winning their first championship. In actuality, it was a combination of different factors that made all these teams truly successful.
Parallels between sports and digital analytics There are interesting parallels between the world of sports and the world of data analytics. Let’s take a closer look at several components that were integral to the success of these championship teams. Leadership—When you evaluate successful sports teams, you’ll typically find they are owned and managed by people who are prepared to make the necessary investments in talent, equipment, and facilities. Their coaches are adept at extracting optimal performance from players and developing strategies that take full advantage of their unique talents. In many cases, these championship teams also have strong team captains who both inspire greatness and lead by example. Guidance and sponsorship from company leaders will help digital analytics to prosper within your company. Strategy—These high-performing teams have a clear vision of what it takes to win championships. They share a common strategy for how to achieve their goals—the entire team, from players toCreating a sustainable data-driven coaches, is determined to do whatever it takes to fulfill their objectives. Frequently, less successfuldynasty takes: teams are not unified or aligned in their approach, which leads to suboptimal results.• Guidance and sponsorship from company leaders A clear digital strategy enables your digital analytics group to align its measurement activities to the• A clear strategy to unify priorities key priorities of your business and thrive as an integral part of your organization.• The right mix of people and resources People—Most fans acknowledge that championship teams are made up of more than just one or• Well-defined processes to obtain two all-star players. Even superstars, such as Michael Jordan and Wayne Gretzky, needed a solid efficiency and effectiveness supporting cast of teammates before they could compete for a championship. The legendary racing• The right technology driver Michael Schumacher needed equally talented engineers, mechanics, and pit crew members• A company culture that fosters on his Ferrari team in order to dominate Formula One racing. success Having the right talent and sufficient resources on your digital analytics team is crucial to your long-term, data-driven success. Process—The managers and coaches of championship teams are constantly developing and refining their tactics to help their teams execute more efficiently and effectively. These teams develop specific plays and in-game strategies that help them to beat their opponents. Remember that a superior team can be defeated by an inferior competitor when it fails to execute its game plan. To have an effective digital analytics program, it is important to develop internal best practices and well-defined processes. Technology—Many professional athletes depend on high-quality equipment to successfully perform their roles. In some professional sports, such as auto racing or cycling, technology is a major component of the sport. Frequently, not having the right equipment can actually put athletes at a major disadvantage compared to other competitors. In digital analytics, technology plays a key role in fostering a data-driven organization. Organizational dynamics—Championship sports teams forge a winning culture that permeates their entire organization. Everyone puts the greater goals of the team before individual agendas or internal politics. None of these championship teams immediately started with a winning culture— over time it was developed, nurtured, and enshrined. Plugging in a digital analytics solution will not automatically transform your company into a data- driven organization—a data-driven culture will need to be purposefully cultivated over time. Championship teams bring together all of the required pieces on a repeated basis to form legendary sports dynasties. They clearly play to win, not just play. When it comes to digital analytics, we’re striving for sustainable excellence—not just a few consecutive winning seasons. However, companies that want to create a data-driven dynasty can follow the example of championship sports franchises by focusing on these six key areas: leadership, strategy, people, process, technology, and organizational dynamics. These areas form the foundation of the Digital Governance Framework. How to create a data-driven dynasty Best Practices Guide 2
Digital Governance Framework Building a data-driven dynasty• Leadership—Executive buy-in and support for the digital analytics Through the sports analogy, you have learned about a new framework for analytics governance— program the Digital Governance Framework. Just like championship teams, your company must address• Strategy—Clarity and alignment several different areas in order to sustain its data-driven success, which requires more than just an around key business goals for emphasis on data management or governance. evaluating online performance• People—Resources, expertise, and Digital governance creates an environment where digital analytics can succeed. It encompasses not the appropriate team structure to only data measurement aspects, but also taking action on the data and deriving recurring value run an effective analytics practice from it. Being an “action-agile” organization goes hand-in-hand with being data-driven because• Process—Procedures, policies, most companies will want to quickly translate business insights into tangible optimizations. Rather standards, and workflow for deploying and using digital data than focusing on just data collection when considering the key areas of this framework, think more effectively holistically about how the data within your organization can be turned into action on a regular and• Technology—Right analytics, timely basis. Your organization needs to be both data driven and action agile. (Note: For this white optimization, and digital marketing paper, data driven will refer to being both data driven and action agile.) tools to meet key business needs• Organizational dynamics—Culture, The Digital Governance Framework includes another somewhat sticky factor that influences your internal politics, and history that company’s evolution to becoming more data driven—organizational dynamics. It is often the influence analytics adoption elephant in the room that people rarely talk about, but face every day in the workplace. This factor is comprised of your company’s culture, its internal politics, its history with analytics in general, and the specific reputation of your web analytics program. These different aspects of your organization create an environment that makes your company supportive, neutral, or resistant to being data driven. A balanced approachUltimately, your organizational At a high level, this framework may look similar to the familiar IT governance framework ofdynamics determine whether “people, process, and technology” that various technology vendors have espoused for enterprise ITyour company is going to face anuphill battle or gain some downhill systems, for example, customer relationship management (CRM), enterprise resource planningmomentum in its data-driven quest. (ERP), business intelligence (BI), and so on. However, upon closer evaluation the DigitalYour corporate environment affects Governance Framework differs from the traditional model in some subtle but important ways.your initial approach. Over timethe organization dynamics can bechanged and then the new dynamicscan influence future efforts. Figure 1. Digital governance requires a balanced approach As shown in the diagram above, the framework emphasizes the interdependent relationships between the different factors in the model. Some people might argue that you could simplify the framework by including leadership in the people category and strategy in the process category. However, these two areas play critical roles in creating a data-driven organization and need to be kept separate to emphasize their importance. It really begins and ends with leadership. Although senior management initially approved the budget for your current analytics solution, that can’t be the extent of their involvement. Without executive sponsorship and buy-in, your program will go nowhere. It happens frequently—talented, intelligent analytics professionals become trapped in providing little more than technical support and basic reporting. They are unable to take their programs to the next level without senior management involvement. How to create a data-driven dynasty Best Practices Guide 3
Next, you need to have a clear digital strategy with well-defined, agreed-upon business goals and key performance indicators. It’s hard to provide relevant reports, meaningful analyses, and impactful optimizations if your digital strategy is nonexistent or ambiguous. Because digital analytics is ultimately about optimizing online performance, it is critical that your analytics team understands what needs to be measured. Your team might be able to guess what’s important to the business, but it’s much more effective if key stakeholders can clarify and agree on what needs to be measured and optimized. Although gaining organizational alignment may be easier said than done, it’s a crucial step because your digital strategy will provide a foundation for all of the other factors.Organizational dynamics are like a Strategy is dependent on leadership because senior management’s input is essential to clarifyingcrosswind that influences how you the digital strategy. The rest of the traditional factors—people, process, and technology—balancebalance the people, process, and upon strategy because it influences all of these factors in different ways (for example, where totechnology factors. allocate analytics staff, what analyses to perform, what analytics tools to purchase, and so on). The balancing analogy highlights the importance of taking a balanced approach with people, process, and technology. If your company loads up on technology without having sufficient resources or processes in place, your approach will tip over and you won’t be able to achieve your goal. Organizational dynamics are like a crosswind that influences how you balance the people, process, and technology factors. Initially, you may need to counterbalance a particular strong crosswind in a certain way (for example, using more processes to overcome cultural challenges) and then adjust or rebalance your approach as these winds can change direction over time. Digital governance factors We’ve covered the six top-level categories, and now we’ll examine the subcomponents that make up each category. As you review the different subcomponents within each category, you may notice that a particular element could have been included in a different category. Although some subcomponents spanned more than one category, they were positioned where they made the most strategic sense. In addition, the categories and subcategories within the Digital Governance Framework are also relevant and applicable to other related areas, such as testing and content management. However, for the purposes of this white paper, we will only examine each category from the perspective of digital analytics. Figure 2. Digital governance category breakdown How to create a data-driven dynasty Best Practices Guide 4
Leadership Leadership is critical—it provides the foundation for a successful digital analytics program. Leadership consists of four subcomponents: sponsorship, buy-in, communication, and accountability. Sponsorship First, you need to have effective executive sponsorship—someone who has sufficient influence and authority within the organization to make things happen. The program will achieve limited success without an executive sponsor who is both committed and involved. To be truly effective, this internal champion should possess some level of self-interest in the program’s success or a passion for creating a data-driven environment. Executives who are involved but not committed might attend meetings—but because they do not believe in the importance of analytics, no real progress will be made. Executives who are Leadership committed but not involved might believe in the value of digital analytics, but they won’t be• Sponsorship effective because they don’t dedicate enough time to support it properly. An effective sponsor will• Buy-in ensure the digital analytics program stays in line with the corporate strategy and top priorities,• Communication protecting it from conflicting initiatives or internal politics and helping address any limiting factors,• Accountability such as resource or budget constraints. Management buy-in Second, you need to have management buy-in across your leadership team to create a data-driven organization. It can’t just be left up to the executive sponsor—you need multiple change agents to drive adoption. One senior executive in a large corporation—even the CEO—cannot drive adoption alone. The responsibility for creating a data-driven dynasty needs to be shared by the entire leadership team. With different departments and teams owning various parts of digitalThe four P’s of executive sponsorship marketing initiatives, it is critical that all groups share a common strategy to foster a data-drivenPrioritization—To be success- environment. In some cases, lack of support from one team can undermine the efforts of otherful, digital analytics needs to be groups who are dependent upon their collaboration. The executive sponsor can play a key role inaligned with key business goals. Theexecutive sponsor provides crucial winning over the executive team by sharing examples that demonstrate the value of digitaldirection to the team, ensuring the analytics. In addition, many analytics teams have launched internal roadshows to raise awarenessdigital analytics program is always in and win support from executives and their direct reports.line with the corporate strategy andtop priorities. CommunicationProtection—The executive sponsor Leadership needs to play a key communication role. Effective communication from managementplays an important role in protecting can accelerate user adoption of data-driven practices. If your management team wants thethe digital analytics team from other organization to become more data driven, it’s important to let the employees know it’s a priority.conflicting initiatives or corporate Typically, what’s important to your boss is important to you. By sharing a data-driven vision andpolitics. repeatedly reinforcing this message (for example, sharing examples of data-driven successes),Problem solving—Using their clout management can help everyone throughout the organization get on board.or influence within the organiza-tion, the executive sponsor steps into remove any problems that could Accountabilityimpede the success of the program, Finally, management plays a key role in holding people accountable—employees, teams, partners,such as resource or budget constraints. and most importantly themselves. Without accountability within an organization, the dataPromotion—The executive sponsor becomes “nice to know” instead of “need to know.” When no one is held accountable for onlineplays a key role in championing the performance, nothing will change because there is no urgency to operate differently. Organizationsbenefits of digital analytics, holding that invest in analytics and optimization only to maintain the status quo are funding an expensivepeople accountable, and promot- business proposition. Managers need to change the perception that accountability is abouting data-driven wins within the discipline and punishment, and instead associate it with learning and improvement. Leading byorganization, especially among otherexecutives. example is essential—leaving little room for anything but data-driven decision making. AlthoughSource: Dykes, Brent. 2011. Web Analytics senior executives have the discretion to rely on their intuition when making key business decisions,Action Hero. Adobe Press. purposefully using and trusting the data can have a positive effect that spreads throughout the entire company. How to create a data-driven dynasty Best Practices Guide 5
Strategy Management guru Peter Drucker once said, “What gets measured, gets managed.” Understanding the business strategy is critical to effective digital measurement and ensuring the right things will be optimized. Strategy is divided into three main areas: focus, alignment, and innovation. Focus Focus emphasizes the organization’s understanding of key business goals and strategic initiatives to achieve those objectives. It’s critical to understand how these goals are prioritized as well as their scope (for example, only this country, only these brands, or only these websites) and timing for completion. In addition, focus also includes defining the key performance indicators (KPIs), such as online revenue or order conversion rate, as well as the associated targets for those metrics (for example, increase online revenue by 20%). When referring to strategy as a key factor, it’s not about Strategy analyzing the actual business or digital strategy—but how clearly that strategy is communicated,• Focus understood, and agreed upon throughout the organization. If an organization’s strategy is• Alignment understood and can be measured, the effectiveness of the digital strategy will be clear.• Innovation Alignment One of the biggest challenges is ensuring alignment between your company’s current strategy and the deployment of your analytics solutions. Organizations are rarely static—leadership changes, business strategy evolves, websites are redesigned, new products or services are introduced, new marketing campaigns are launched, new marketing channels appear, new partnerships are formed, competitive landscapes shift, and so on. Without proper alignment between your implementation and the current digital strategy, the reporting and analysis may be irrelevant or less useful to the business. Your measurement strategy needs to be dynamic and adjust as changes occur within your business. Having a representative from the digital analytics team on a digital marketing steering committee can ensure that the team stays on top of what’s happening within the business and any potential shifts in priorities. Innovation If your company has covered the first two foundational areas, it can then focus on innovation. From a strategic perspective, if your organization is successfully collecting the right data on a consistent basis, you are in a position to innovate, turn your data into a competitive advantage, and take your business to the next level. Your organization will be able to explore new applications and new ways to extract even greater value from your digital data. Your company may even be able to transform your data into unanticipated revenue streams via new products or value-added services for your customers or partner networks. The opportunities are limitless once the foundational pieces are in place. People Despite ongoing advancements in analytics technology, human beings will continue to play a central role in the success of digital analytics. The people category consists of four subcomponents: resources, expertise, structure, and community. Resources One of the main aspects of any analytics or optimization program is resources. You’ll need to consider many factors to decide how to staff your analytics team. Based on the number of internal customers across your business teams and the overall complexity of your business, you’ll need to determine the right amount of analytics professionals to meet the data-driven needs of your organization. The different roles and responsibilities need to be defined in terms of business People reporting, deep-dive analysis, technical deployment, and project management.• Resources• Expertise You’ll also need to decide the appropriate mix and allocation of internal staff and external• Structure consultants, which may depend on your organization’s maturity level with digital analytics (less• Community mature organizations may require more consultants), as well as staffing constraints (it may be easier to hire a contractor than get more headcount). Finally, your organization will need to determine how to best hire and retain this unique breed of talent. Although you can always recruit seasoned analytics talent from other companies, more and more organizations are finding success in grooming college graduates into future analytics experts. How to create a data-driven dynasty Best Practices Guide 6
ExpertiseExpertise relates to the types of analytics skills and knowledge that are required by yourorganization’s analytics staff, business users, and senior executives. Each group will have related butvastly different needs. For example, your analytics power users will need extensive training on youranalytics solution to take full advantage of its capabilities. Business users need role-specific trainingon how to quickly access the key day-to-day information and reports they need for their position.Executives won’t necessarily need or want extensive product training, but instead need training onhow to interpret metrics and reports so they can make informed business decisions. Yourorganization will need different training approaches for onboarding new staff as well as helping yourcurrent employees to develop their expertise over time. Other considerations include how muchemphasis will be placed on cross-training, whether your firm will leverage internal and externaltraining programs, and how those courses will be administered—web based or instructor led.StructureStructure is a major people-related consideration in the Digital Governance Framework. Digitalanalytics teams are typically organized in one of three ways: decentralized, centralized, or hybrid(hub-and-spoke), as shown in the following figure. Today, most organizations rely on a centralizedmodel where all of the analytics resources report into a single corporate team (colocated ordistributed), or a hybrid approach where a core analytics team manages the overall analyticsprogram and collaborates with distributed analysts within each business unit. The hybrid modelcombines the advantages of the centralized approach (standardization, shared training and bestpractices) with those of the decentralized approach (provides more flexibility within business unitsand allows analysts to be closer to the business).Figure 3. Analytics team structuresThe ownership of the analytics team also continues to be a topic of debate (sometimes heated)among organizations. When web analytics first emerged as a technology, the group was part of theIT function; however, over the past five years more analytics teams have shifted away from IT tothe business side, such as marketing or e-commerce. The optimal structure for your analytics teamwill depend on your company’s digital strategy, its unique organizational structure, and thematurity level of your company.CommunityAlthough overlooked, community is another key consideration. The well-known saying “it takes avillage to raise a child” is appropriate for digital analytics programs as well. You want to encouragethe creation of an analytics community within your company where members can learn from eachother and share experiences, ideas, and best practices. When you have distributed analysts andbusiness users across different business units and countries, the digital analytics communityprovides valuable support to new users as well as opportunities for more advanced users to sharetheir collective wisdom. Community can be fostered in a number of different ways, such as a simpleemail distribution list, internal wiki, corporate chat groups, scheduled monthly calls, and workshops. How to create a data-driven dynasty Best Practices Guide 7
Process If your company wants to be successful with its analytics and optimization efforts, it will need to establish and streamline its analytics-related processes and workflows. There are four main types of processes: deployment, usage, sustainability, and change management. Deployment Deployment covers the various processes related to implementing tags and configuring your analytics solution in an efficient and effective manner. At a basic level, analytics tagging should be built into the current web development process—and not be a recurring afterthought. Organizations should have a formal process for gathering business requirements for new projects, and a robust quality assurance process for tagging before it goes live. Without well-defined processes in the deployment phase, key data needed by the business can be left out due to incomplete requirement Process gathering, introducing unnecessary risks and delays due to last-minute code fixes. It can also erode• Deployment confidence in the data if it’s frequently implemented incorrectly. Larger corporations with several• Usage analytics deployments occurring concurrently need to involve project managers.• Sustainability• Change Management Figure 4. Sample deployment process for analytics projects Usage Once an analytics solution is in place, how your company uses the tool becomes important because you’ll want to maximize your investment. Usage means you are establishing and leveraging best practices for reporting and deep-dive analysis. For example, is your team monitoring how much time and effort is being spent on reporting instead of deep-dive analysis? If your analysts are being bombarded with reporting and analysis requests each week, do you have a system in place to help prioritize those requests? If you’re familiar with digital analytics, you also know that there’s more than one way to answer a particular business question or report on performance results. For routine reports and business questions, it may be helpful to agree on the best approach to ensure numbers match up properly regardless of who is building the report or performing the analysis. Sustainability Sustainability focuses on having the right infrastructure and procedures in place to support or sustain your analytics efforts postdeployment. These processes ensure that your analytics and optimization initiatives do not go off course in six to 12 months. Some examples of sustainability practices include documenting each deployment for future reference, establishing and enforcing corporate standards, creating a centralized knowledge base of metrics and reports, providing ongoing “open office” hours for analysis and reporting questions, clearly defining escalation paths for analytics issues, and scheduling periodic implementation reviews. By focusing on sustainable analytics, you’re managing digital analytics like a program instead just a project or set of projects. How to create a data-driven dynasty Best Practices Guide 8
Change management Many organizations are looking to change their current culture to one that is more data driven. In order for this to happen, leaders, employees, and partners may need to adjust existing attitudes and behaviors. Change management is about managing the people side of change. A wide variety of change management tactics can be employed in order to achieve this type of organizational transformation. These tactics can include focusing on short-term wins to build internal momentum, evangelizing the successes of the program throughout the company, and creating optimization checklists to turn behaviors into habits. Like it or not, if you work in digital analytics you need to be a change agent. Technology Along with the previously mentioned factors within the Digital Governance Framework, technology also plays an important role in creating a data-driven organization. The technology should act as an enabler—empowering your organization to obtain data and act on it. Technology does not refer to just your analytics tools, but to all of the technologies that form your digital marketing infrastructure (content management systems, testing, targeting, internal search engines, social media, and so on). When evaluating the different aspects of technology, there are five key considerations for digital analytics: solution fit, enterprise class, integration, empowerment, and automation. Solution fit First, you need to ensure there’s a good solution fit between your current business needs and digital marketing technologies. Are you able to perform the necessary analysis and optimization based onTechnology your current toolset? For example, if you need to analyze marketing campaigns across online and• Solution Fit offline channels, only certain analytics tools are capable of handling this kind of request. In another• Enterprise Class example, if your company would like to optimize its online user experience but its legacy content• Integration management templates are inflexible, the business won’t be able to act on any of the analysis findings.• Empowerment Whenever there’s a poor solution fit between your business needs and the available technologies,• Automation you’re essentially using the wrong tools for the job. When an athlete doesn’t have the right equipment for a particular sport, the activity becomes more difficult and time-consuming. The same problem can occur with digital analytics—technology can get in the way or it can enable success. Enterprise class If you work for a medium-to-large-size business, you’ll probably need enterprise-class analytics and optimization tools. In other words, are your analytics tools scalable and reliable? Do you have sufficient levels of support and professional services? Do you have adequate application program interfaces (APIs) and user administration tools? Do you own your data? Although a homegrown solution might have been sufficient when your company was smaller, a rapidly growing and expanding company needs enterprise-class analytics and optimization tools. Integration Companies are frequently using various tools to measure and optimize different areas of their digital marketing (for example, social media, email, targeting, and so on). Integration between technologies is critical because companies can benefit from integrated data and workflows that streamline processes, provide better insights, and enable greater agility to seize. Empowerment Achieving adequate staffing levels can be challenging—making empowerment even more crucial. In order to have your analytics resources focused on the most strategic projects, you’ll need to democratize the data and empower disparate business users to answer routine business questions themselves. Analytics tools can enable business users to access data through online dashboards, Excel-based scorecards, scheduled custom reports, and other ways. Automation Automation can offset resource bandwidth issues. Whenever a company can substitute technology for people through automation, it means they can either reduce costs or reallocate resources to more strategic areas. Digital analytics can provide automated alerts to notify analysts of key problems requiring investigation, and refreshable Excel-based dashboards to simplify reporting and free up analysts’ time to focus on more strategic analyses. How to create a data-driven dynasty Best Practices Guide 9
Organizational dynamics Although the rest of the factors focus on different levers that you can employ in your data-driven journey, you can’t ignore the unique institutional factors that influence your company’s success with digital analytics. Rather than overlooking these organizational dynamics, it’s better to acknowledge them and determine how they might shape your data-driven plans. Externally, companies of a similar size, corporate heritage, and industry may look similar on the surface. However, once you examine their inner workings—their values, culture, and ways of getting things done—they can be vastly different. As a result, a successful practice at one company may not be as effective at another. It’s not about finding excuses for why something won’t work at your organization—it’s about tailoring your data-driven approach to its unique environment so it will succeed. As previously mentioned, organizational dynamics aren’t necessarily negatives and can actually be strengths that give your company an advantage in creating a data-driven organization. TheseOrganization Dynamics institutional factors can also shift and change over time—but more in a time frame of months and• Culture years rather than days or weeks. There are three organizational dynamics factors: corporate• Politics culture, corporate politics, and history/reputation.• History/reputation Corporate culture Each company has its own unique corporate culture that influences how the organization perceives and uses data. Some organizational cultures may be resistant to adopting a more data-driven approach because they are intuition driven or bureaucratic. Despite the fact that these companies have invested in digital analytics, leaders and employees may be skeptical or fearful of the data. Meanwhile, other firms that are more results driven or sales oriented may embrace data-driven practices, welcoming additional business insights that can improve their performance and pinpoint new opportunities. Culture can also be an issue when it comes to how digital or Internet savvy your organization is. Although some companies have dived headfirst into the digital world—others have barely dipped in their toes. Any resistance to digital analytics may actually be directed towards the digital space in general. Corporate politics Another key organizational dynamic is the level of corporate politics at your company. Organizational politics are a reality at most companies, and they can interfere with efforts to build and sustain a data-driven organization. Politics can play havoc when departmental turf wars and different personal agendas—control of resources, promotion of individual goals, or pursuit of power and position—push digital analytics initiatives off course. Navigating politically-charged organizations requires extra attention and patience. History/reputation Some companies have been successful with analytics in unrelated parts of their business (for example, point of sale, supply chain management, and so on), and as a result, these firms are more receptive to analytics in general. In addition, past successes or failures in web analytics and the overall reputation of the program can have a lasting effect on building internal momentum. With the right plan and some determination, all of these dynamics be turned to your favor—cultures can be molded, politics can be mitigated, and history can be rewritten. The path to a data-driven dynasty On the journey towards becoming more data driven, companies move through different stages. If we look at a graph that compares the level of investment (loosely defined as money, time, staff, and management focus) and the amount of data-driven success (ROI) they achieve, most organizations would anticipate that there is a perfect linear relationship between these two variables—the more that is invested, the greater the return. How to create a data-driven dynasty Best Practices Guide 10
Figure 5. Expected relationship between analytics investment and returnIn the real world, most companies don’t follow the straight line up and to the right. Instead they runinto the “optimization speed bump.” The actual return from their investment in digital analyticsdoesn’t result in the return they expected.Figure 6. Optimization speed bumpThe reason for this arc is that most companies do not take a structured and balanced approachwith their analytics and optimization efforts, and as a result these organizations find themselves inan impaired state. As shown in the graph above, there’s a gap between the value that could havebeen generated and what actually is created. These organizations have made a significantinvestment in technology and may have assigned someone to manage the tool—but they haven’tworried about establishing any processes, securing the necessary leadership support, or clarifyingthe digital strategy.Figure 7. Data-driven maturity requires balanced investments How to create a data-driven dynasty Best Practices Guide 11
However, over time if they make strategic, balanced investments in their data-driven capabilities, they will gradually move through the initiated and focused stages until they reach the high- performing optimized stage. As your organization matures in terms of its data-driven capabilities, you’ll become more efficient at maximizing the value from your analytics and optimization investments. From the following matrix, you can get a sense of what is occurring at each maturity level based on the five principal factors within the Digital Governance Framework. Figure 8. Data-driven maturity matrixFrequently, problems are Common pitfalls along the data-driven journeyinterconnected, and some hallenges c Each company faces unique challenges along its data-driven journey. However, there are somemay even be symptoms of moredeeply rooted issues. common pitfalls that prevent organizations from reaching their full data-driven potential. As you evaluate your current maturity level with digital analytics and chart your course for success, consider which of the following issues might be challenges at your company: • No executive sponsor—The digital analytics program doesn’t have a champion, and without sponsorship it is unable to build momentum internally. • Unclear strategy—Without a clear, agreed upon digital strategy, the analytics team is unable to align the data measurement efforts to the real needs of the business. • No accountability for digital metrics—Individuals, teams, and partners are not held accountable for the performance of digital marketing efforts. As a result, there’s no incentive to change or improve current behaviors or approaches. • Disconnected, outdated implementation—Data collection hasn’t kept pace with the changes occurring within the business, and the analytics reports are no longer as relevant or meaningful. • Poor deployment process—Too often analytics ends up being an afterthought each time the company launches a new digital marketing initiative. As a result, the reports end up being incorrect, incomplete, or less useful than they could have been. • More emphasis on reporting than deep-dive analysis—The analytics team’s time is primarily spent on maintaining the existing reports and responding to ad-hoc reporting requests. Almost no emphasis is placed on advanced analysis, which can provide significantly more value to the business. • Lack of analytics resources—Digital analytics teams are insufficiently staffed and are unable to address more than just the basic responsibilities of implementation and reporting. • Dysfunctional team structure—Analytics resources are located on the wrong team, siloed within the organization, or misaligned with the needs and structure of the enterprise. • Insufficient tool training—Employees receive little to no training on the analytics tools, and as a result they are overly dependent on the analytics team to answer routine business questions. • Siloed technologies—Different digital marketing point solutions aren’t integrated and don’t play nicely together. Rather than focusing on improving the digital business, the digital analytics team is constantly sidetracked by extraneous implementation roadblocks and data validation issues. How to create a data-driven dynasty Best Practices Guide 12
Laying a solid foundationFrequently, problems are interconnected, and some hallenges may even be symptoms of more cdeeply rooted issues. Trying to solve symptoms instead of more serious underlying problems canbe a frustrating, wasteful exercise. By strategically addressing one key issue, an organization maybe able to lleviate challenges in other areas. Two common pitfalls are critical starting points: asecuring an executive sponsor and clarifying your digital strategy.In the Digital Governance Framework, all of the areas are dependent on leadership’s involvementin nurturing a data-driven organization. Leadership is even the most effective tool in tacklingvarious organizational dynamics, such as a change-resistant culture or corrosive internal politics. Ifyour company can find a strong executive sponsor at the right level within the organization, thatindividual can rectify other issues by spearheading efforts to clarify the corporate strategy,introducing more transparency and accountability, securing more analytics staff, identifying othermanagers who can act as change agents, and so on.Clarifying the digital strategy is another critical step in your company’s data-driven journey, andmany other considerations hinge on having clear objectives and KPIs. Once you have properdirection based on a clearly defined and agreed-upon strategy, it becomes easier to create a senseof urgency, discern priorities, and focus your efforts. When your strategy lens is blurry, the qualityand relevance of your data may not come into question. Alternatively, your organization mayquestion why certain metrics matter or even how to properly interpret them. Only when yourstrategy lens is sharpened and put into focus, do other challenges become higher priorities to fix. Insome cases, you might not be able to address either of these areas initially—however, they can’t beignored because before too long they will end up inhibiting your overall progression.Finding an executive sponsorIf you don’t have a champion or executive sponsor for your digital analytics program, follow these steps.1. Identify which departments or groups will benefit the most from digital analytics—typically business units that have high investments in digital marketing initiatives.2. Pick a team that is excited to work with you and learn more about their part of the business and their unique challenges.3. Target potential quick wins for this team from the digital data. A series of small successes begins to demonstrate the value of the digital analytics data. You’ll attract attention from managers who appreciate how the data can help them achieve their objectives and targets.4. As you share your findings and recommendations, identify an executive within this group who would be a good champion. Initially, you might not be able secure a senior executive. Start with a mid-level manager who is passionate about the data. As you continue to deliver value by generating wins for the organization, you’ll eventually get the attention of higher level executives.Developing a digital strategy You may think every company but yours has a digital strategy, but sadly many do not. Oftencorporate websites aren’t owned by a single owner and represent a mixture of disparate, or worse,competing interests and purposes. So much effort goes into maintaining and updating them thatnobody has taken the time to define what they’re trying to achieve online, frequently leading tocounterproductive results. Follow these steps to define your digital strategy.1. Identify all of the key stakeholder groups for your company’s digital properties.2. Gather key business objectives from each group separately.3. Merge the goals into a set of four to five key objectives.4. Based on your understanding of the corporate strategy, prioritize and rank the list of goals.5. In a group meeting, review and refine the goals with key stakeholders. If needed, involve a neutral third party to mediate potential disagreements.6. Based on stakeholder feedback, finalize the business objectives and KPIs.7. Share an overview of the agreed-upon digital strategy with key stakeholders. How to create a data-driven dynasty Best Practices Guide 13
Case study: Skandinaviska Enskilda BankÅsa Iggström joined the Swedish bank, Skandinaviska Enskilda Bank (SEB), in 2008 after workingseveral years in different web management roles in the wine and spirits industry. Two years afterjoining the financial institution, she was given the opportunity to manage its digital analyticsprogram. Reflecting on her organization’s journey, Åsa identified three key phases during hercompany’s evolution in digital analytics, as shown below.Figure 9. SEB’s data-driven journey (2008-2012)Impaired to initiated (2008-2009)The beginning of the journey was a little rough. Overall, the business had a low appreciation of thebusiness value that web analytics could provide, which was further complicated by the fact thatthere was no clear ownership of the company’s web initiatives. Web analytics wasn’t viewed as abusiness driver or opportunity, but mainly as a way to measure and maintain its online properties.Although SEB had an advanced analytics platform (Adobe® SiteCatalyst® software), it only had oneperson working 50% on web analytics and an antiquated content management system (CMS) thatcreated several implementation headaches. At that time, Åsa was working as an online businessdeveloper, but she sought out training to strengthen her skills and sharpen her focus on webanalytics. She hired experienced consultants to help move her own digital analytics initiatives inthe right direction.Initiated to focused (2010-2011)SEB’s management team came to realize that web analytics played a strategic role within its groupmarketing department. Åsa was asked to own the global web analytics function, and she securedbudget for technical and strategic support from an optimization agency. The part-time resourcewithin the business unit was replaced by a full-time dedicated analyst, who collaborated with Åsain expanding the digital analytics program.With the support of her manager, Åsa trained two power users so that reporting responsibilitiescould be delegated from her role. She worked with different internal stakeholders to establish theoverall goals and purpose of the site, which helped to ensure SEB’s implementation matched itsdigital strategy. Despite ongoing issues with the company’s CMS, she was able to introduce someworkarounds and establish more consistent processes for campaign and paid search tracking.However, Åsa ran into a setback when her role and function was shifted to a nonstrategicdepartment during a corporate reorganization. The change temporarily limited her ability toinfluence the bank’s digital initiatives from an analytics perspective. How to create a data-driven dynasty Best Practices Guide 14