Cooking up Data Products, a 10-Step Recipe
Data products have the power to transform companies and and even industries. Google, LinkedIN, and Uber are models of data commercialization. Digital Transformation initiatives are spawning new streams of data that can be harnessed by the organization to create new internal efficiencies or new products and services for customers. This is not magic, there is a method to this madness that we present in 10-steps.
What is a Data Product?
Technically speaking, a ‘data product’ is an insight or tool created out of existing or purposely acquired raw data that can be used to improve decision making, generally by clients, consumers or other organizations.
These insights may be simple, such as informing a buyer of available inventory three months into the future to help them make better purchasing plans. It may involve bench-marking, where a supplier is presented with how their service levels compare to all other suppliers. It may extend to providing consumer services, such as providing consumers a directory of all the best products.
For any organization, there is not only revenue, but competitive advantage to be gained in developing data products. Possible data products will depend on the organization’s internal systems, its customers and their customers and the mindset with regarding to sharing information up and down the value chain. Coordinating this creativity is the ‘Data Product Manager’
In this post, we provide a high level methodology for identifying and shaping data products.
The recipe for developing data products
- Understand all areas of the business (especially support functions)
- Inventory all data in all repositories (especially in transactional systems)
- Catalog all insights and where those insights are being used to inform business decisions inside your organization to improve performance at all levels
- Understand your customer’s business and the types of decision they are making and what information they are using to inform those decisions
- Understand your customers customers, what do they look for and what do they value, where are their pain points
- Now ask the question what information do we possess that would help our customers that when added to our customers information could be used to help their customers
- What information might be available in the public domain that might help (social media, weather, geography etc.) whether free or paid for
- Is there any information that each of our customers might have that they might share with us that when aggregated might help all the customers
- What incentives could be put in place to get the clients to share that information
- Is there any application that could be offered to customers customers that would be useful
A Data Product for Sysco Food Service
To create an example, I randomly picked an industry and a company – let’s say we’re targeting the Food Service business for this hypothetical case study and Sysco as a company that would be interested in creating data products. Applying these steps, (with a little guesswork involved) to providing some abbreviated answers:
1. What is Sysco’s business?
Sysco provides a food supply chain, buying wholesale from farms, food processors and other suppliers, the managing the forecasting, buying and ordering process, they will also operate warehouses and a logistics infrastructure to move food products. The support function would be quality assurance, nutrition experts, finance and sales and marketing
2. Thinking about the data that is flowing through Sysco’s systems
- Customer: Identification details, Key personnel, transaction history (i.e. orders and order details, returns), issue history, billing (collections and recovery)
- Supplier: Identification details, Product data to include prices, nutritional information, transaction history (i.e. orders and order details, returns), issue history, financials
- Product Data: Sysco product files, price (and historical price), cost and profitability
- Inbound and Warehouse : Inventory data, stock movements, order history, demand forecasts and actuals
- Outbound and Logstics: Outbound order history,
- Fleet information (vehicle inventory, repair and service history, routing and actual geo-location, fuel consumption), Delivery and receipt data
- Personnel: Staff records
- Sales and Marketing Data: Marketing Campaigns, prospect lists, conversions, cost and revenues
- Financial: General ledger, taxes and fees
3. Catalog the insights that Sysco might be creating
- Financial: Financial ratios (gross margin, operating margin, cost of goods sold, return on assets, current ratio, inventory conversion etc.), invoice accuracy
- Inventory: inventory value, carrying costs, turnover, sales order fill rate, warehouse utilization, spoilage, out of stock
- Order Management: on time fulfillment, back orders, processing cost per order, orders processed per day
- Supplier performance: order accuracy, on time shipments, shipment cost per unit (case/SKU), value of supplier
- Service delivery: order accuracy, on time shipment, returns
- Fleet: vehicle fill, empty running, fuel consumption, time utilization, deviation from schedule
- Sales: win-loss analysis, lost sales, collections, customer churn
- Marketing: cost per acquisition, conversion funnel
- Customer Service: issue tickets, time to resolution, cost per call
4. Understanding Sysco’s customers’ business
- Typical customers are restaurants and company cafeterias serving food and catering businesses
- They are ordering and preparing food (as a finished product based on raw materials supplied by Sysco
- Looking to minimize their costs of delivery while maintaining high service levels and a variety of food
- Improving customer service levels, increasing profitability of each facility by increasing customer throughput
- Improving menus in terms of quality and reputation
- Maintaining standards of hygiene
- Minimizing staff turnover and increasing staff productivity
- Reducing food costs and cost of waste or spoilage, increasing profitability of each serving
5. Understanding Sysco’s customers’ customers
- Diners in each restaurant or cafeteria
- Concerned about hygiene, quality of food
- Customers want quick and efficient service in a restaurant with good ambiance
- They also want to know that they are getting good value
- And they want to be able to find a convenient restaurant where they can find the type of food they like
- May have special needs in terms of food allergies, diet, children, disabled access
- What information might we have that could help our customers and their customers?
6. What information is available inside, with customers and with customer’s customers?
b) Customer (restaurants, cafeterias, bars, catering businesses)
- Ordering process: typical order lead times, average order size by type and size of restaurant
- Menu planning: ingredients lists and proportions, quantity information per serving, price elasticities
- Food Information: nutritional information
- Delivery routing: routes by day or by hour
- Overstocked items: advance notice of items in good supply, versus short supply
- Seasonal promotions: deals with food suppliers where products available at favorable prices
- Benchmark data: comparable orders for similar establishments
b) Customer’s customers (diners)
- Nutritional information
- Allergy information
- Opening hours
- Menu information
7. What public domain information might be out there?
- Restaurant directories and guides
- Nutritional information
- Allergy information
- Food poisoning reports
- Restaurant hygiene inspection notes
- Recipe data
- Geo-spatial, map data of restaurants and routes
8. What information might the customers share with Sysco?
- Menus, Ingredient Lists, Recipes
- Diner counts / Covers per night
- Meal forecasts
- Inspection reports
- Staff counts
- Staffing profiles
- Restaurant size (sq. footage, tables)
- Party booking calendars
9. What incentives might Sysco provide to encourage sharing of information?
Sysco might be able to offer restauranteurs a free SaaS based restaurant planning application (calendars, ordering systems and visibility into orders placed – as offered by services such as Restaurant365Software). This would give Sysco instant access to all the aggregated data.
10. What applications might Sysco provide to its customers’ customers?
If Sysco purchased a service such as AllMenus, then the customer’s menus could be made available directly to customers via an application. Sysco could easily enhance the menus with nutritional information. In addition, if Sysco had purchased a service such as Foodspotting, then the menus could be linked with customer sourced ratings, photographs and reviews. In acquiring those two resources, Sysco would additional gain insight into the types of food customers were looking for and liking and a prospect list of trending restaurants.
Developing your own Data Products
We are passionate about helping organizations discover new value in their data and in helping them build the systems and processes to allow that value to be realized. Our team has been building data products for over 10 years. We have experience in Data Strategy, Business Intelligence and Insight Discovery from Big Data and from the user generated content in Social Media. We can take care of the messy business of preparing your source data so that your analysts and data scientists can maximize the use of their skills and time.
Sysco already supplies their clients with a huge menu of extended services such as market reports, recipe applications and chef search. There are no doubt data products there too. Disclaimer: neither Sysco nor any other Food Industry organization is client or prospective of First Retail at the time of writing.