# Becoming data driven

## DJ Patil and Hilary Mason's Data Driven: Creating a Data Culture is about building organizations that can take advantage of data.

I’m excited to see that DJ Patil and Hilary Mason‘s new ebook Data Driven: Creating a Data Culture is now available. It’s been a lot of fun working with DJ and Hilary over the past few months.

I’m not going to summarize their work here: you should read it. It’s based on the realization that merely assembling a bunch of people who understand statistics doesn’t do the job. You end up with a group of data specialists on the margins of the organization, who don’t have the ability to do anything more than be frustrated. If you don’t develop a data culture, if people don’t understand the value of data and how it can be used to inform discussions, you can build all the dashboards and Hadoop clusters you want, but they won’t help you.

Data is a powerful tool, but it’s easy to jump on the data bandwagon and miss the benefits. Data Driven: Creating a Data Culture is about building organizations that can really take advantage of data. Is that organization yours?

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• Alex Tolley

A question not answered by the book is “Does a data driven organization do better than one that is not?”. This begs the question of whether the effort to be data driven, especially “big data” driven, has a positive NPV for the firm. While we might like to think this is obviously true, where is the support for this assumption?

• Carl Anderson

That is a really great question and one that I address in my forthcoming book from O’Reilly “Creating a Data-Driven Organization” (http://shop.oreilly.com/product/0636920035848.do).

The data are sparse and the methodologies not always clear, so take the results with a pinch of salt, but I found some studies that suggest impact of being drata-driven is about 5%, for big data specifically 3% (if you use it well and ask the right questions) and for analytics in general $13 return for every$1 spent.
Carl Anderson
@leapingllamas

• Matt

I would say look at lean 6 sigma. They use data to find weaknesses, then use data to show how to fix it.

This leads to many efficiencies. In my previous life I went into a factory to replace the old school quality manager. I am very data oriented. Within 3 months I halved warranty as a % of sales by using data to drive decision making.

This was just using data they already had in a new way.

300M factory.

Original warranty .73%
Original warranty cost 2.4M/year

After 3 months with new data driven QM .37%

Extrapolated yearly savings of 1.2M / year. 0 added cost.