Analytics and Witch Doctoring: A Cure for the Black Box

Mentality

September 21, 2011

O’Reilly Strata Conference

J.C. Herz

Jnhq@yahoo.com

Analytics: Occult Phenomenon

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Very powerful

Don’t understand it

Practitioners possess arcane knowledge

SecretAlgorithms

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Greek Letters Are Your Kryptonite

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High Status Helplessness

• If you understood the technology, you’d be one of those people whose job it is to make technology work.

• You know, underlings

OODA Loop

Which of these does an analytic tool/technology do?

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Data Due Diligence & Auditing

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Critical Question: Data Quality

• How complete is it?

– Ex: 600 custom fields, only two have more than 50% coverage

• How accurate is it? How do you know?

• How consistent is it?

• Good test: make three calls to different parts of the company, to get an answer to a factual question that doesn’t require calculation.

Precision vs. Accuracy

When precision exceeds accuracy, you’re setting yourself up for analytic failure

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Critical Question: Half-Life of Data

• How long is the data accurate?

• How long is the data useful?

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Critical Question: Tempo

• How fast will a decision be made on the basis of analytic insight?

• Quarterly?

• Daily?

• Within seconds?

• Milliseconds?

• Never?

• Realtime vs. Continuous vs. Batch

Critical Question: Real World Context

• Without real world data, “behavioral” metrics are misleading

• Where is the transactional data that validates insights from non-transactional data?

• How would you prove the magic analytics WRONG?

Critical Question: What is the Validation Test?

• Formulating the validation test keeps both the customer and the developer focused - and honest

• Suggest pay for performance, and see if the developer or vendor freaks out.

• Make sure validation is ongoing - in case the ground is shifting

Critical Questions: Workflow

• What workflow changes will this proposed capability require?

• People hate changing their workflow, even if it’s an improvement

• Never attribute to stupidity what can be attributed to laziness

• What is your plan for changing workflow? How do you enforce it?

What are you prepared to do?

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Critical Question: Consequences

• What actions are you willing to take on the basis of validated analytic insight?– Change your product?– Change your marketing budget?– Change people’s job descriptions?– Re-allocate R&D budgets?

• What actions are you not willing to take?

Questions?

• J.C. Herz jnhq@yahoo.com (202) 213-3151

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Technical Reality vs. Leadership Attention Span

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Business Payoff vs. Intellectual Appeal

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Social Network Analysis

Operations Research

Market Segmentation

Competitive Intelligence

Pilots to test new analyst tools with tiny amounts of generic data

360º Lead Scoring

Validate Marketing Effectiveness

The perfect application that no-one uses is still worthless

Shame

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Shame

Politics

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Before You Rip ‘n’ Replace:

What is the exit cost of this technology?

Does “turnkey” mean monoculture?

Ugly Babies & Pretty Babies

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A Ballad of Spectacular Information Display

• Time Magazine 1976• Telex text routing:

information off the wire goes to terminals, properly foldered

• Z8 terminal display awes executives

• Pneumatic system not eliminated

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