The Most Important Data You Don’t Have

From Calgary, Alberta - August 2024

Years ago, Bruce Kiddoo, the CFO of Maxim Integrated, made a simple comment to me.

“Your data team helps this company make better decisions,” he said.

Talk about connecting the dots.

Bruce’s vision took all the work we did and linked it to its ultimate purpose, forcing me to rethink all of our data solutions. I realized that we should think about management decisions first, data second.

IT people (like me) usually just focus on operational data, like shipments or sales opportunities. After all, that’s the easiest data to find since it comes from the systems we already support. Business leaders, on the other hand, spend most of their time thinking about investment decisions, not operational decisions. Semiconductor companies (for example) decide what products to launch, movie studios decide what films to produce, and colleges decide what programs to offer.

I can’t tell you how much this perspective changes the roadmaps of my consulting clients. When I meet them, they wonder why mid- and upper-level managers don’t use their data platform. Then they start to realize why: they’re missing most of the data decision makers use. It’s a huge opportunity for them to partner with their business leadership to shift thought forward for the entire company, just by supporting these decision processes in the data platform.

Real Data?

Not everyone shares this perspective. I posted recently about a popular business podcaster who declared that plans are not real data and “only fact data counts.” Everything else is opinion and should be ignored, he argued.

But give that some thought for a moment: if you only use data that comes from a transaction system, then you’re always looking at data about the past. You’ll always be making operational decisions, not the strategic decisions that change the direction of a company.

I’m not saying that some data from your business systems isn’t forward-looking, and I’m not saying that predictive analytics aren’t useful. But plan data is not the same as a forecast. Plans get made long before any business activity happens, and many plans never make it through the approval phase. That’s the point – people make investment decisions based on the credibility of the plan. Decisions they make about the company’s future don’t come from a software application. People make plans.

Where It’s Hiding

You might be surprised to find that the real decision data (like a Return on Investment [ROI] analysis) is sitting on the desktop of the business manager. Finding decision data like this doesn’t come naturally for IT people like me; you’ve got to get into the mind of a decision maker, and if you don’t ask questions about that data, you might never know it’s there.

Here's a simple framework you can use to find gaps like these in your data solution. For every business function at your company (like sales, R&D, or finance), you should have three types of data in your analytic system: Plan, Actual, and Forecast. That’s the way entrepreneurs normally think: first, they make a plan and invest in it, then they measure actual performance compared to the plan. Then they reforecast the results and adjust along the way. If you don’t capture all three of these types of data for each business function, then you’ve got gaps in your data platform.

Find your company’s real decision data. Build your analytics around it. It’s the most important data that’s not in your analytic system.

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