Everyone is talking about big data, but many business executives still don’t understand it or know how to use it to help their companies. The question is “How can business leaders use big data to unlock insights that drive new revenue and increase profitability?” Join Domo COO Steve Wellen and Domo Director of Business Intelligence Jeff Burtenshaw for a conversational webinar exploring big data.
How to drive company revenue from big data:
Make data-driven business decisions
Leverage data to create competitive advantages
Utilize tools like Domo to display and effectively act on data
TOM:Good morning. I’d like to welcome everyone to today’s webinar. Recently Domo partnered with Bloomberg Business Week to produce a report on driving revenue with big data. Here to discuss insights from this report are Steve Wellen, Chief Operating Officer at Domo, and Jeff Burtenshaw, Director of Business Intelligence at Domo, in an executive panel that we’ve titled Demystifying Big Data.
A little bit more about these gentlemen: Steve Wellen brings more than 30 years industry experience to his role as leader of our client services team, bringing value to Domo customers through consulting, education, and ongoing engagement. Before joining the team at Domo, Steve led over a thousand employees at Omniture and was responsible for pre-sales, consulting, education, solution architecture, and operations. Jeff Burtenshaw applies his broad knowledge of the market’s latest technologies to setting the strategic direction for Domo’s business intelligence capabilities. Jeff’s job is to make sure that Domo walks the walk when it comes to meaningful business intelligence. Jeff was previously the Director of BI and Performance Management for Boart Longyear and the Director of BI at Ancestory.com. The both of these gentlemen are fantastic at what they do, and I think you’ll really appreciate their insights on this big data topic.
So let’s jump in. You guys have all heard the hype: big data is everywhere. This graphic on the screen illustrates how much information is generated every minute, and there’s some fantastic statistics here. Just a few examples: email users send over 284 million messages every minute, YouTube users upload over 48 hours of video every minute, and there are over 2000 Foursquare users that check in every minute. But what I’d like to discuss with Steve and Jeff is what does this all actually mean for business? How does it apply to the challenges that you, the business leaders, face every day? Let’s get started by asking our panel. Steve and Jeff, I’d like to hear how you define big data.
STEVE: Well first of all, thanks. I appreciate the ability to talk about these things, Tom. It’s an exciting time for us. Before even defining big data, the main thing to look at here is that times have changed, just within the past few years. If you think about how people can access this big world of data, you can see it’s gotten easier—with cell phones and iPads and tablets and so forth—so that the proliferation of big data is happening in a huge way. It’s happening because it’s so simple to get out onto the different areas that you just talked about—the different platforms like YouTube or Twitter or you name it—it’s so easy to do that.
In my definition of what is big data? It’s all this information that’s floating out there from the world, or the ether of information, that is being put in from those sources. But also, companies have had a lot of data for years and years and years on customer information or habits that people have at buying things at their companies, and so forth, and big data is the intersection of those—of that social data that we’re seeing out there and the ease of being able to put it out there for people to see—as well as companies’ data—colliding, and big datais what you do with that. So the time that we’ll spend in this panel discussing will be the collision of social data and big data inside companies as well as customer information that they have and what does that mean, how do you attack it, what do you do with it, and what’s the value of that. So we’ll talk more about that as we move along in this discussion.
TOM: Thanks Steve. And Jeff, what are your thoughts?
JEFF: Well, to dovetail off on some of Steve’s comments there, he says people move to what the value is, and I believe that. Big data will eventually become big results, big accountability, big performance. Right now the buzz word is big data, and people are enamored with that and focused on it, and it’s like any term that gains some traction. I think the traditional definition, or the most widely accepted definition of big data, is The Three Vs which are volume, variety, and velocity. I think, for any company undertaking to capitalize on their big data, that understanding those three Vs is important. Volume and velocity are fairly self-evident. The variety of data, I think, is where the opportunity lies—things of social media or video feeds or text analytics or machine data (the old log file processing now has a name for machine data). These are many of the sources of big data that contribute to that variety, and I think that’s where the opportunities of companies lies is in looking at those and looking at opportunities specifically where they have touch points with that.
TOM: Fantastic. So in listening to you right now there’s no doubt that big data is on the mind of business leaders. According to this chart we can see that over a quarter of businesses consider big data and analytics one of their top ten corporate priorities, which I thought was pretty amazing. So that leads us into out next question that I have for you guys. Why has big data and analytics become such a sudden priority? In fact there was a study in 2012 on global management by McKenzie, and they said that 65% of executives say that big data and analytics is a top priority for their organization. Just recently this wasn’t the case, why the sudden charge?
STEVE: I think part of it is just the proliferation of what we talked about, the availability of devices to be able to get information out there. There’s this new paradigm, though, that businesses are seeing—that there’s a lot of social information out there that can affect their company’s profits, and it can affect how people view the company. So the shift is happening because individual companies are seeing that they need to harness into the power and the positive nature of what big data brings or the social aspects of what big data brings or be able to fend off negative things that pop up. And the speed at which it’s happening today is so much faster than it’s ever happened before because of just the availability of this. I think executives are now saying, probably from a more positive side, how can we harness this, how can we get a view of what’s happening out there before customers are even customers so it can affect what we build, what we sell, who we are, and how we position ourselves, and then take that social information to be able to make business attack plans. So it can be a very positive thing, but as we’ll probably discuss as we move forward in this panel, there are some negative things that happen too that you better be ready for and have an organization that can handle the negative side as well.
JEFF: Yeah absolutely, I think it’s an interesting question. Why now? Why is big data taking hold? We’ve had data around, but as we’ve seen from some of these charts the explosion of data is tremendous. I heard that a typical organization, a corporation now, produces as much data in a year as the Library of Congress have. It’s just a staggering perspective. And so there’s more information, but we’ve always had information, we’ve always had people trying to capitalize on that information, and I think at the end of the day that that’s really what drives this—the competitive instinct of companies. Last time I checked CEOs are still asking their sales people to deliver 10 and 20 percent sales growth every year, and that creates tremendous pressure to innovate, and I think that really drives this cycle. And I think the fundamental core beyond, behind what people are looking for right now in big data, there is several things, but I think one of the main drivers of this is getting better understanding and insight about their customers. It’s no longer marketing to the masses in a shotgun fashion that people prefer. The dollars, the spend, the research, the innovation is happening and treating a customer as a segment of one—what is this particular customer’s interests and what are their touch points with my product. And that’s the promise of social media because it gives a researcher so much information. The Freakonomics guys would love this social media stuff because they can observe the behavior of their customer in an unvarnished, un-staged mode. They can see what they really think and what they’re really saying about it.
STEVE: And don’t you think it’s more unique today in that we have so much information that’s at the fingertips from big data? You can evaluate that like we never have before.
JEFF: Well the internet, for sure, has collaborated on that touch point and made so much more information, personably identifiable information, available about a person.
TOM: Fantastic. So we talked about data accessibility and the fact that it’s more accessible than ever before. In fact we have a really cool graphic illustrating that here on the screen. Every word that was ever spoken by human beings put into digital text would total just 5 exabytes of data, but that’s a full two exabytes short of the amount of business data that was generated in 2010 alone, so that’s a similar statistic to the one that you threw out Jeff. That’s absolutely mind blowing in my opinion.
JEFF: Another staggering statistic is Facebook. I saw a blog post today that said Facebook collects 250 terabytes of data a day.
TOM: No, a day?
JEFF: A day. And it’s accelerating.
TOM: That actually brings us to our next question. The question I’d like to pose to you both is, can executives be too data driven? And maybe as a follow on question, what role does gut feel and instinct play in business, and how can you strike a balance between those two?
STEVE: I think this plays right into what Jeff was just saying. There is so much data out there, but, the point that Jeff was just making, what do you do with that? And we still have to execute. There’s an execution of selling or having good customer service satisfaction, those kind of things. I think the paradigm of business in communication, taking care of clients, selling, those kind of things, don’t change. What has changed is the availability. The amount of data that comes at us from different sources (that’s internet, etc. what we’ve just described) is so big. How do you parse it down to something that’s usable that then helps with those business functions that you must get done?
So can executives be too data driven? Yes I think so, if, in fact, they get lost in the minutia of all that data that’s out there and can’t parse what is important to the company. It’s very important, and one of the things we do at Domo that we’d love to explore in other webinars is how do we take this data and focus it into key business requirements of a company to then focus to KPIs to be able to help measure that so that we help you organize your thoughts around what is really important to your own company? And then what kind of data out there (in the internet and business data that you have) can you use to help drive information in your company to be able to have usable information then to measure that and to be able to increase sales and so forth. So I think yes they can be too data driven. It’s what you do with it—how do you focus it and how do you harness it, because the data’s so much better, probably more precise, like you were saying Jeff, down to individual one to one marketing that you can do. You can do things that you’d never been able to do before, but you need to focus it to what’s important in the company.
And I’ll throw one other thing out at you. Gut feel. To me, I don’t think companies ever really run on gut feel. There’s some industries out there like the oil and gas business where wild catters have always been seen as people that know when to drill, where to drill, and they have a gut feel, and they spend a lot of money on this hole and they rarely have dry holes that they go after. That was always humorous to me. I think it’s probably 20, 30, 40 years of experience—harnessing all this data this we’re talking about, making good business decisions from that, and then knowing, based upon experience, where to apply—that is what gets classified as gut feel. I doubt any really good executive that stays in business and is profitable and does the right thing for the stockholders ever really does much off of gut feel.
JEFF: Yeah, I worked in the mining industry for a time, and Rio Tinto is a company that was one of those. They predicted the economic collapse that we had several years before it happened, and they had positioned their business for it. And I was always amazed by that. They had very good statistical models about the economy. They’d been doing that for a long time. I think those companies are more sophisticated than we know in terms of how they take their information, and they capture the information about geology, and there’s a reason they don’t drill many dry holes.
But the thing about this that I think that’s really interesting is, to use an analogy, CEOs used to be floating on a lake of information and now they’re swimming in an ocean. So just prima facie, I would say gut feel is going to become actually more important, perhaps, than it has been in the past because CEOs have more to sift through. There’s more to look at, and so how do determine where to aim your gun? That’s a great question. But then paradoxically, in all that information, we’re getting more and more specific in our ability to target, so it’s a really interesting time. There’s a lot of innovation going on, and the CEO of today’s challenge is, I think, getting harder than it was in the past because of all the complexity of what they have to measure.
A recent study that we did on the behavior of CEOs on social media is an interesting fact that supports this, that very few CEOs are engaging, at this point, in social media. The ones that do are the ones that are getting that 20 percent sales growth target or higher, because they’re going to know more, and they’re going to perform better. I think you’re going to see a dichotomy. You’re going to start to see companies separate, just like they have in every innovative period, where people that learn how to capture this precog ability, this fiscal sophistication, and the ability to parse through big data with the right kind of focus, the right kind of gut feel of where to look and what kinds of projects to take on, are going to outperform their competitors.
TOM: Fantastic, thank you both. As you both touched on, big data is having a very real, very big impact. According to the graph that we’re looking at now, big data leaders outperform their counterparts across the board when it comes to compound annual growth rates. Dramatically so, as you can see here with online retailers and a few others. These big data leaders, they’re the ones that are leading the market overall. Which leads us to our next question. I’d like to ask you both, who’s doing something extraordinary with big data—maybe an example of an industry or a company that’s doing something really neat?
STEVE: I think of a couple of them, and actually as you had that last graphic up about online retailers, there’s a lot of innovation going on there, around that, so I think of that. But I also think of somebody like Nike as an example. I have my Nike shoes on. I’ve been a Nike client for a long time. They have some great shoes, and one of the things that they do in the shoes that I’m wearing now is there’s a little device in there that I can use to track my running habits, and I do. You can upload it into your iPod, you can take it with you, you can see where you’ve run from GPS formats, you can see tracks that you’ve run on, cities that you’ve run in, and you can keep track by time, how much time you spent running over the past few months, all this kind of thing, races or otherwise, it’s pretty phenomenal. But think of it in a different context. I mean, for me it’s just ease of use and having something that automatically tracks me, and I don’t have to think about looking at my watch or remembering where I ran. But for Nike, they have a service in which they track this, so they know where I run. They know where my shoes have been. They know what conditions my Nike shoes have been in, and, like Jeff said earlier, there’s a one to one marketing, to me potentially, that they could use in that. There’s certainly demographic data that they can use in that, there’s geographic data they can use in that, and all this stuff, as simple as that little concept is with a little chip in the bottom of my shoe, they can do a lot of stuff. That’s big data, I mean there’s a lot of data there that they can then mesh with other kinds of things to be able to know whether or not the Pegasus shoes that I’m wearing today are the right ones for this kind of condition. Are there things that they want to do? Do they want to survey me? Who knows what they want to do with that information but there’s one example.
And I’ll throw out another one because it’s interesting to me. I’m from Texas, and inside Texas there’s a grocery store chain called the H-E-B. It’s just like any other regional grocery chain but very connected to their customer base. They have done a great job of identifying foods and things to stock on shelves, where to stock them, and they also do marketing to individuals. And they do that by their little tags that show I’m a member of the grocery store, and every time I check out I show that, put my phone number in, whatever. But they send me coupons, or I get coupons as I leave there. They call me by my name. This is data that, I mean in the simple kind of paradigm like a grocery store, helps me feel a connection to them because it is one to one marketing with me. But on the other hand, what they do with that, how they stock shelves, how they then take my data plus everybody else’s data that obviously shops there a lot and use it to do shelf placement. There is a whole science around that for grocery stores to be able to get profits and sell things and put things in certain parts of the store, connect them to other products in the stores. It’s a fantastic thing when you think about behind the scenes what are they doing with that, how they improve their profits and location of product.
So those are two very simple examples, but if you start thinking about the big data behind that, the upside to that, for those companies or other companies like them, it’s phenomenal.
JEFF: Yeah those are great examples. I love what Nike is doing. That’s a great example. Just yesterday I was doing a run with their iPhone app, and Tim Tebow congratulated me on concluding my run which was kind of cool, but they’re clearly getting it. They’re getting the understanding of this geo-location information, the impacts on their business, and I think that’s a trend we’ll see continue with lots of retailers, especially specialty retailers that have personal products like that.
Another favorite example of mine right now is a certain trading company. They have a hedge fund, and they are using social sentiment analysis to help direct their trading decisions. They’re outperforming the market, which is quite an interesting use-case of this one-upmanship, looking for the insights that big data can give you.
Another big area is in product companies where they’re processing warranty claims, and they take their call center calls, and things of that nature, or sentiment, and parse through all that text data that gets logged informally into text fields and memo fields and leaking out the product recommendations and trends that they can then respond to and fix.
TOM: Terrific. Thank you both, and whether it’s data coming from your Nike shoes or whether it’s social sentiment that you’re using to determine what you’re buying and selling, all this data can, I’m sure, feel like a tsunami to business leaders, to CEOs especially. But it’s being collected everywhere, and it’s literally flowing into your business from all angles, and that leads me to my next question. Where should a business leader begin? Say you’re a CEO of a company or on the executive team, how do you start jumping into this big data, how do you make sense of it all?
STEVE: This is an area where Jeff and I are spending a lot of time, and I think the experience that we have—just the years of either running large organizations or trying to help decipher this kind of phenomenon—is really what we’re all about. I think the key here is continuing to focus on what your business is all about. At Domo one of the things that we’re doing for our clients, and will continue to do for our clients, is help them focus on what are those true key business requirements or the objectives that companies like themselves have within their industry. And we’ve talked about some—like the financial institutions that Jeff talked about or manufacturing retailers like Nike or grocery store chains, There are key business requirements that each one of those industries have that they’re focused on in general. Our belief is that there’s probably a handful that really matter to the company, and while each company may have some secret sauce that they have that’s their competitive edge, there are certain things inside a company that you can focus on. There might be five, ten, fifteen things inside a company that are really important to focus on around—around either revenue growth, cost containment, margin, things of that nature—and my job is to help clients really visualize what that is, understand what business-best practices are for their industry, and focus that tsunami into things that execute against those key business requirements that then can be measured against KPIs to help them manage that.
It always comes back to, what am I all about? What am I trying to do as an organization? What are we driving this company to? What does the industry that I’m in do about this and then what’s my competitive edge? If you keep that kind of focus, that regiment, day after day and get the, not only yourself as a C-level executive in the company focused on it but down to all the employees within the company beating that same drum, you will be able to take this tsunami and turn it into something that’s powerful. So this is something that we certainly, both Jeff and I, want to engage with. Along with anybody listening to this webinar, but our customers will be involved in that kind of activity with us to help focus the tsunami into something that’s powerful for them.
JEFF: Great comment, I spend a lot of time thinking about this issue, actually, and what Domo can bring to the table specifically, what I can do to help this area. Where does somebody start? And you know I was talking with Steve the other day about the P90X workout he was doing with his son, and with exercise there is a basic level, and P90X works up to deluxe and ultimate, and it’s a progression. You have to start somewhere. You can’t start with predictive analytics and target marketing and positioning your website visitors on a one to one basis as your first project out the gates. There are some fundamentals you have to have in place. To use a sports analogy, you’ve got to be able to block and tackle before you put in the passing game.
And I think companies need that ability, and I think there is this dichotomy in the market place where it’s the big companies who have the big budgets and the big dollars. I mean who’s going to spend as much as IBM spent on Watson for example? It’s just an unfair playing field and one of the reasons I came to Domo is that I see an opportunity that we have here to level the playing field a bit for people. We can give them that baseline information, infrastructure to start their metrics-based culture, and then take them on that journey from the baseline to ultimately being a champion in their industry. And they need a partner, they need a platform, they need a progression. This is a culture. This is a process. This is people and technology. It’s not just buy a server and stick a statistician in the back room and you’re magically going to compete with Nike. I mean it’s just not going to happen that way. You have to be very targeted and planned about this, and if you don’t you will not compete. And so it will become a must. I think Domo is really positioning with mid-markets CEOs to really help them on this journey, to help them really get their arms around being a metric driven company, metric-driven culture and capitalize on this data tsunami, and I’m excited to be part of that.
STEVE: I’ll just throw this in on the P90X reference that Jeff made. (One thing, I wouldn’t compete against your son as I did; that was not a wise because he’s many years my younger and kicked my butt) It’s a really good example of me coming into a training program where I had an idea of what I wanted. I certainly wanted to have Tony Horton-rock-hard abs and all that kind of stuff, but he only has done this same routine now for about 20 years. We both know, to go along with your analogy, it’s a great analogy, we both know what we want. We want that sculpted body or, at least, I just wanted to be in shape and feel good about myself; my son wanted to have the sculpted body. But we know the goal. What I think companies don’t appreciate and you just uncovered Jeff, is the idea that you must walk before you run. No matter how big you are—the little guy, the big guy—in my experience of 30 plus years inside businesses, we see that in both small and big companies, there’s a lot of walk before you run till you get there.
So our approach, our Domo approach that we’re working towards, is to help people do that. Let’s lay a foundation that’s valuable, that’s tangibly valuable right out of the gate, to be able to take on this tsunami. However, it gets more sophisticated as we go to phase two or phase three or wherever we want to work with our customers to get to, and I think that’s the approach that’s logical and probably what’s missing in BI or in big data altogether today. So there’s that consumption, and we’d love to help people think through that and keep focused on their key needs with that kind of thought.
JEFF: There are definitely opportunities in every company to get big performance gains and big results out of their big data. They just need to follow a tried and true process to get there, and we can help them.
TOM: Great comments both of you. You’re both Domo executives, and we’ve touched on Domo. I know there are a lot of people out there that are curious about what Domo does, and so let’s jump into that now. Jeff, if you could start with this slide. Tell people a little bit about what Domo does and our approach to big data.
JEFF: Well Domo started out as a genesis of Josh James’ experience when he was at Omniture. He sold Omniture, and one of his frustrations in retrospect, thinking about his time managing Omniture, was that he could never get all the data that he wanted in the right place at the right time without it being filtered or massaged by somebody else. And as simple as that may seem, it is extremely difficult in large corporations, or even in smaller enterprises, that have multiple systems. In the big company it’s harder because they have so many systems. In the smaller company it’s harder because they don’t have systems. That’s some of the thinking in what Josh has centered on, and it’s quite a unique advantage for us because we have Josh as a real, world-class recognized CEO and he’s been very successful. He’s guiding the product to solve that problem, and it touches all aspects. It touches accountability and social sharing facets. It touches optimization of visualization. There’s a lot of thinking and a lot of experience gone into the Domo product and the Domo experience.
One of our driving pillars is that if you ask people what’s broke it’s the consumer experience, it’s the usability. Everybody says they have this really super easy interface, but when you look at them they’re not. They are for the data analysts, they’re for the statistician, they’re for that highly-trained specialist. Whether they be in IT or in the business, they’re still highly trained and highly specialized to know how to use this technology. We’re trying to break that down and make it accessible to the rest of us so that it’s easy to use and yet still very powerful in terms of the insights and the way it can drive your revenue performance.
TOM: So what I’d like to ask you specifically is, why is Domo valuable within an organization or, specifically, why do CxOs, CEO executives, care about this product?
STEVE: If you listen to what we’ve said in this webinar, I think the consumption of a tsunami is the over-riding topic that we’ve been talking about, and that’s true inside companies as well. If you look, if once you get behind the firewall inside a company, there are things that need to be done. At a C-level in any company they want to be able to have communication with their entire organization and have everybody marching to the charter of the organization. That’s the idea, and that’s not something new. That’s always been there. So when I talked earlier about key business requirements of a company, typically a CEO will have those as the charter for the company. Their job is to be able to convey that to the organization, to get people to understand, to become evangelist to those goals and get people to really rally around whatever those are and perform to it so that the company can either make profits, revenue goals, or whatever those goals are centered around. The problem, though, if you think about it historically, has been that there is an information loss in the typical fashion the way things were done from one level of an organization to the next to the next. There’s been studies done that say that in each level of management a third of the information is lost from one level to the next as it’s being conveyed. And that’s way it’s been done for eons.
So what we’re thinking about in Domo is how do you improve that? How do you create transparency? The role doesn’t change. The key business requirements flow into the organization. Getting people to align does not change. It’s the same problem. It’s just like the tsunami, and BI data, trying to consume it. The business goals don’t change; it’s what you do about it. So what Domo is thinking is let’s make it more transparent. Let’s get information flow transparent through the organization so people appreciate it. Let’s get feedback from that information back into C-levels to make sure that we turn the ship slightly if we need to based upon the great information that we can harness from our employees.
So if you think about Domo, taking what Jeff said just a minute ago on just how it’s constructed and how we convey information, the other side of it is the socialization of that information inside the organization. It’s the transparency and feedback that we have from employees through dashboards to be able to say what they’re doing about that KPI to achieve that goal. That’s what we’re about, and it’s such a cool paradigm that it will really change how BI is consumed.
So if you think about this, if we summarize that, there are goals to an organization. We want to create transparency, so you want to democratize data across your organization which hasn’t been done well ever, and that’s really where we’re focusing. Not only do we want to democratize it, but we also want feedback from people, influencers in our organization, that can give us good data back so we can turn the ship to actually achieve our goals. That’s huge. The consumption and feedback and being able to execute against those goals is just as important as having that BI data in the first place from the tsunami and knowing what key business requirements you have and how to execute against them.
So that is Domo, that is what we are, and that is how we’re going to help our clients get to the next level is being able to create this kind of environment to be able to have that feedback.
TOM: Great. Jeff and Steve, I really appreciate your insights. If you’re interested in learning more about Domo we’d love to have you contact us to set up a personalized demo. You can reach us at www.domo.com, firstname.lastname@example.org, or at this phone number: (801) 805-9500. And if you’d like a copy of this driving revenue through big data report in partnership with Bloomberg Business Week feel free to visit the URL www.domo.com/BigDataReport. Thanks so much for attending the webinar today and I hope you have good one.
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