Big Data Business Strategy

DEVELOPING AN ACTIONABLE BIG DATA
BUSINESS STRATEGY
BILL SCHMARZO, CTO, EMC GLOBAL SERVICES
Follow me on twitter: @SCHMARZO
© Copyright 2016 EMC Corporation. All rights reserved. 1
BIG DATA BUSINESS MODEL MATURITY INDEX
Measures degree to
which organizations have
integrated data and analytics
into their business models BUSINESS
METAMORPHOSIS
Key Business
Processes
MONETIZATION
Economic
Drivers
BUSINESS
OPTIMIZATION
BUSINESS
BUSINESS INSIGHTS Prescriptive
MONITORING Recommendations
© Copyright 2015
2016 EMC Corporation. All rights reserved. 2
DEVELOPING BIG DATA BUSINESS STRATEGY
Step 1: Understand Business Initiatives
BUSINESS VALUE
Step 2: Identify Business Use Cases
DRIVEN
Step 3: Define Data Requirements
Step 4: Develop Data Science Plan
Step 5: Define Technology Plan

STEP 1: UNDERSTAND BUSINESS INITIATIVES
WHAT ARE THE CHARACTERISTICS OF A BUSINESS INITIATIVE
THAT MAKE IT A GOOD BIG DATA CANDIDATE?
•  Sense of Urgency
•  Important To The Business
•  Compelling ROI
•  Clear Business Ownership
•  Strong IT Leadership
•  Bounty of Potential Data Sources
•  Analytics Friendly
EXAMPLE: [CHIPOTLE] BUSINESS INITIATIVES
Chipotle Business Initiatives

•  Build people culture that attracts and
empowers top performers
•  Grow revenues (up 20.3% in 2012)
opening new stores (opened 183 in
2012)
•  Increase comparable restaurant
sales growth (7.1% in 2012)
•  Marketing building Chipotle brand
and engaging with our customers
Chipotle 2012 Annual Report

STEP 2: IDENTIFY BUSINESS USE CASES
WHERE AND HOW DO YOU INTEGRATE DATA AND ANALYTICS INTO THE
ORGANIZATION’S BUSINESS STRATEGY?
•  Identify business Use Cases that support to key

Business Initiatives
•  Identify Business Stakeholders who either impact

or are impacted by the targeted business initiative
•  Leverage Prioritization Matrix to drive

organizational consensus around use cases

EXAMPLE: [CHIPOTLE] USE CASE
INCREASE STORE TRAFFIC: Leverage local events (little league games, soccer tournaments,
high school sports, college sports, concerts, etc.) with more localized marketing campaigns,
promotions and sponsorship to increase store traffic during these local events.
BUSINESS POTENTIAL IMPLEMENTATION RISKS

•  Develop highly-localized marketing campaigns and •  Tracking effectiveness of campaigns
promotions based on the local store demographics, •  Capturing (screen scraping) local events data
economics and social vibrancy
•  Ability to create localized campaigns
•  Understand local events’ demographics in order to
make sponsorship and promotional determinations
IMPACT CHIPOTLE FINANCIAL GOALS IMPLEMENTATION CONSIDERATIONS

Store Revenue Growth Customer Acquisition Customer Retention •  Capturing and governing additional data
•  Ability to monitor sponsorship effectiveness
Market Basket Margin Product Cross-Sell New Products
•  Store manager training and capabilities
Overall Ease of Implementation: 2.5
Overall Impact on Goals: 2.0
Revenue Potential: $_______

EXAMPLE: [CHIPOTLE] BUSINESS STAKEHOLDER
BUSINESS INITIATIVE: INCREASE SAME STORE SALES
Store Manager: Typically 2 to 4 years of Chipotle experience; promoted through
the ranks to store manager within same store
Quote: “I love Chipotle, so working here only seemed natural”
Key Decisions Supporting Business Questions Pain Points

Staffing •  What’s the likely store traffic throughout the day? Lacks real-time model that allows him to
update changing demand variables
•  When and for how long are the local events?
Inventory •  Given store traffic estimates, how much additional Doesn’t have insights into extra inventory at
inventory will I at what points in the day? neighboring stores that might fill temporary
inventory gaps
•  What local events that could impact inventory?
•  What are the types of local events?
Customer •  What’s the best comp to give unsatisfied customer? Doesn’t know “how valuable” that particular
Satisfaction customer is to the Chipotle
•  How important is that customer to me?
•  What is the cost of the different comp options?
Production •  Do I need to shift staff to produce more materials given Doesn’t have insights into local events that
the store traffic and time of day? could dramatically impact production needs
•  Which products are most popular for local events?

EXAMPLE: [CHIPOTLE] KEY DECISIONS
BUSINESS INITIATIVE: INCREASE SAME STORE SALES
STAKEHOLDER: STORE MANAGER
STAFFING CORPORATE SALES (CATERING)

How many staff do I need? What skills Who to target? When are their events?
do I need? What roles do I need? What’s the priority targets?
SCHEDULING LOCAL EVENTS PROMOTIONS
When (dates and times)? For how Which events? What type of promotion?
long? How much overtime? When to promote?
INVENTORY LOCAL EVENTS SPONSORSHIPS
How much? Meats? Accessories? Which events? What type of
Beverages? sponsorship? When to sponsor?
PRODUCTION
How much to produce? When? What
types of items to produce?
EXAMPLE: [CHIPOTLE] PRIORITIZATION
INCREASE SAME STORE SALES Use Cases
Hi
F A Increase Store Traffic
A
B Increase Shopping Basket Size
E C
B C Increase Corporate Events
BUSINESS VALUE
D
D Improve New Product Introductions
E Improve Promotional Effectiveness
F Increase Special Events
Lo Hi
IMPLEMENTATION FEASIBILITY

STEP 3: DEFINE DATA REQUIREMENTS
WHAT DATA DO YOU NEED TO SUPPORT THE BUSINESS USE CASES?
•  Brainstorm the variables and metrics (data sources)

that might yield better predictors of business
performance
•  Assess each data source from the perspectives of

Business Value and Implementation Feasibility

EXAMPLE: [CHIPOTLE] DATA SOURCES
!  Point of Sales Transactions !  Traffic Patterns
!  Market Baskets !  Yelp
!  Product Master !  Zillow/Realtor.com
!  Store Demographics !  Twitter/Facebook/Instagram
!  Competitive Stores Sales !  Twellow/Twellowhood
!  Store Manager Notes !  Zip Code Demographics
!  Employee Demographics !  EventBrite
!  Store Manager Demographics !  MaxPreps
!  Consumer Comments !  Mobile App
!  Weather !  …

EXAMPLE: [CHIPOTLE] DATA ASSESSMENT
Increase Increase # Increase
Increase Shopping Corporate Promotional Improve NPI
Data Source Store Traffic Bag Revenue Events Effectiveness Effectiveness
Point of Sales Transactions 4 4 4 4 4

Market Baskets 4 4 2 4 4
Store Demographics (Zip Code) 3 3 1 3 3
Local Competitive Stores 2 2 2 2 2
Store Manager Demographics 1 1 3 1 1 Ease of
Data Source Acquiring Cleanliness Accuracy Granularity Cost
Consumer Comments 3 3 3 3 2
Point of Sales Transactions 4 4 4 4 4
Social Media 2 1 1 3 3
Market Baskets 4 4 4 4 4
Weather 3 1 1 1 1
Store Demographics (Zip Codes) 4 4 4 4 4
Local Events 4 2 1 2 1
Competitive Stores Sales 2 2 2 2 1
Traffic 3 1 1 2 1
Store Manager Demographics 4 4 4 4 4
Zillow 1 2 2 2 2
Consumer Comments 2 2 1 2 3
BUSINESS VALUE Social Media 1 1 1 1 1

Weather 3 3 2 2 2
Local Events 1 2 2 2 1
Traffic 2 2 1 3 2
Zillow 1 1 2 2 1
IMPLEMENTATION FEASIBILITY

STEP 4: DEVELOP DATA SCIENCE PLAN
WHAT ARE THE DATA SCIENCE REQUIREMENTS NECESSARY TO SUPPORT THE
BUSINESS PLAN?
! People (Tiger Team)

! Capabilities (Tools)
! Process

DATA SCIENCE TIGER TEAM PLAYERS
THE DATA SCIENCE “TIGER TEAM” NEEDS THE FOLLOWING ROLES:
•  Business Subject Matter Expert (SME)

•  Data Czar
•  Data Engineer
•  Data Architect
•  Data Scientists
•  Data Visualization
•  Data Governance
•  App Dev/User Experience

DATA SCIENCE CAPABILITIES
THE DATA SCIENCE PLAN NEEDS TO ADDRESS THE FOLLOWING DATA SCIENCE
CAPABILITIES (TOOLS):
•  Data acquisition and ingest

•  Data repository
•  Data discovery
•  Data transformation and enrichment
•  Data visualization
(Tableau, DataRPM, ggplot2)
•  Analytic modeling
(SAS, R, MADlib, Statistica, H20)
DATA SCIENCE PROCESS
Weather Google Physician Local
Historical Forecast CDC Trends Notes Events
Step 1: Define Hypothesis to test or Kronos

Prediction to be made Epic
Lawson
Step 2: Gather data…and more data

(Data Lake: SQL + Hadoop)
Step 3: Prepare the data

(transformation, enrichment)
Step 4: Visualize the data

REPEAT
(Tableau, DataRPM, ggplot2,…)
Step 5: Build analytic models

(SAS, R, MADlib, Mahout,…)
Step 6: Evaluate model results

(probabilities, confidence levels)

STEP 5: DEVELOP TECHNOLOGY PLAN
WITH THE BUSINESS USE CASES, DATA AND DATA SCIENCE REQUIREMENTS IN
HAND, WE ARE NOW READY FOR:
DATA ARCHITECTURE BIG DATA ECOSYSTEM

DATA ARCHITECTURE
HADOOP DISTRIBUTION DATA SCIENCE
DATA EXPLORATION DATA VISUALIZATION
DATA ENRICHMENT ANALYTIC MODELING
DATA PLATFORM MANAGER DATA

CURATOR GOVERNOR
ADMINISTRATION ANALYTICS CATALOG DATA CATALOG
INGEST LINEAGE
PRIVATE CLOUD
INDEX QUALITY
COMPUTE
SECURITY
ENRICH HYPERSCALE DATA LAKE REAL-TIME STREAMING

BIG DATA ECOSYSTEM
APPLICATIONS STATISTICAL MODELING/NLP SEARCH/INDEX EXPLORATION BI
STREAM DATA WAREHOUSE

CATALOG AND PROVISION
RDBMS CEP
DISCOVER/MAP TRANSFORM ORGANIZE/TAG
EMAIL
SOCIAL
MEDIA
HADOOP SQL
3rd PARTY DATA LAKE
MACHINE
IOT ENTERPRISE LOG ANALYSIS

WHAT SHOULD YOU DO NOW?
WHAT ARE THE SETS OF ACTIONS AND IDEAS THAT YOU CAN TAKE BACK TO
YOUR OFFICES BASED UPON TODAY’S SESSION?
!  Identify targeted business initiative

!  Identify supporting business use cases
!  Identify key business stakeholders
!  Capture key business decisions
!  Identify and brainstorm data to explore
!  Identify architecture and technology requirements
THANK YOU!
Blog: http://infocus.emc.com/author/william_schmarzo/
To Achieve Big Data’s Potential, Get It Into The Boardroom

http://www.entrepreneur.com/article/236125
Big Data Business Model Maturity Index (animation)

https://infocus.emc.com/william_schmarzo/big-ideas-big-data-business-model-maturity-index/
Big Data Business Model Maturity Index Guide

https://infocus.emc.com/william_schmarzo/big-data-business-model-maturity-index-guide/
Keys to Big Data Success? KISS!

https://infocus.emc.com/william_schmarzo/keys-to-big-data-success-kiss/
How I’ve Learned To Stop Worrying And Love The Data Lake
https://infocus.emc.com/william_schmarzo/how-ive-learned-to-stop-worrying-and-love-the-data-lake/
Contact Information
Email: William.Schmarzo@emc.com
Twitter: @schmarzo

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DEVELOPING AN ACTIONABLE BIG DATA

Step 1: Understand Business Initiatives

Step 4: Develop Data Science Plan

Step 5: Define Technology Plan

© Copyright 2016 EMC Corporation. All rights reserved. 3

Chipotle Business Initiatives

Chipotle 2012 Annual Report

• Identify business Use Cases that support to key

• Identify Business Stakeholders who either impact

• Leverage Prioritization Matrix to drive

© Copyright 2016 EMC Corporation. All rights reserved. 6

BUSINESS POTENTIAL IMPLEMENTATION RISKS

IMPACT CHIPOTLE FINANCIAL GOALS IMPLEMENTATION CONSIDERATIONS

Revenue Potential: $_______

© Copyright 2016 EMC Corporation. All rights reserved. 7

Key Decisions Supporting Business Questions Pain Points

© Copyright 2016 EMC Corporation. All rights reserved. 8

STAFFING CORPORATE SALES (CATERING)

E Improve Promotional Effectiveness

F Increase Special Events

© Copyright 2016 EMC Corporation. All rights reserved. 10

• Brainstorm the variables and metrics (data sources)

• Assess each data source from the perspectives of

© Copyright 2016 EMC Corporation. All rights reserved. 11

© Copyright 2016 EMC Corporation. All rights reserved. 12

Point of Sales Transactions 4 4 4 4 4

BUSINESS VALUE Social Media 1 1 1 1 1

© Copyright 2016 EMC Corporation. All rights reserved. 13

! People (Tiger Team)

© Copyright 2016 EMC Corporation. All rights reserved. 14

• Business Subject Matter Expert (SME)

© Copyright 2016 EMC Corporation. All rights reserved. 15

• Data acquisition and ingest

Step 1: Define Hypothesis to test or Kronos

Step 2: Gather data…and more data

Step 3: Prepare the data

Step 4: Visualize the data

(Tableau, DataRPM, ggplot2,…)

Step 5: Build analytic models

Step 6: Evaluate model results

© Copyright 2016 EMC Corporation. All rights reserved. 17

DATA ARCHITECTURE BIG DATA ECOSYSTEM

© Copyright 2016 EMC Corporation. All rights reserved. 18

DATA ENRICHMENT ANALYTIC MODELING

DATA PLATFORM MANAGER DATA

© Copyright 2016 EMC Corporation. All rights reserved. 19

STREAM DATA WAREHOUSE

© Copyright 2016 EMC Corporation. All rights reserved. 20

! Identify targeted business initiative

To Achieve Big Data’s Potential, Get It Into The Boardroom

Big Data Business Model Maturity Index (animation)

Big Data Business Model Maturity Index Guide

Keys to Big Data Success? KISS!

© Copyright 2016 EMC Corporation. All rights reserved. 22

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•  Identify business Use Cases that support to key

•  Identify Business Stakeholders who either impact

•  Leverage Prioritization Matrix to drive

•  Brainstorm the variables and metrics (data sources)

•  Assess each data source from the perspectives of

! People (Tiger Team)

•  Business Subject Matter Expert (SME)

•  Data acquisition and ingest

!  Identify targeted business initiative