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Data Prep – More than a Buzzword?

25 Feb

“Data Prep” has become a popular phrase over the last year or so – why? At a practical level, data preparation tools are providing the same functionality that traditional ETL (extract, transform, load) tools provide. Are data prep tools just a marketing gimmick to get organizations to buy more ETL software? This blog seeks to address why data prep capabilities have become a topic of conversation within the data and analytics communities.

Traditionally, data prep has been viewed as slow and laborious, often associated with linear, rigid methodologies. Recently, however, data prep has become synonymous with data agility. It is a set of capabilities that pushes the boundaries of who has access to data, and how they can apply it to business challenges. Looked at this way, data prep is a foundational capability for digital transformation, which I define as the ability of companies to evolve in an agile fashion in some key dimension of their business model. The business driver of most transformation programs is to fundamentally change key business performance metrics, such as revenue, margins, or market share. Viewed in this way, data prep tools are a critical addition to the toolbox when it comes to driving key business metrics.

Consider the way that data usage has evolved, and the role that data prep capabilities are playing.

Analytics is maturing. Analytics is not a new idea. However, for years it was a function relegated to Operations Research (OR) folks and statisticians. This is no longer the case. As BI and reporting tools grew more powerful and increasingly enabled self service for end users, users began asking questions that were more analytical in nature.

Data-Driven decisions require data “in context.” Decision-making and the process that supports it require data to be evaluated in the context of the business or operational challenge at hand. How management perceives an issue will drive what data is collected and how it is analyzed. In the 1950’s and 1960’s, operations research drove analytics, and the key performance indicators were well established. These included time in process, mean time to failure, yield and throughput. All of these were well understood and largely prescriptive. Fast forward to now. Analytics is broadly applied and used well beyond the scope of operations research. New types of analysis driven in large part by social media trends are much less prescriptive and value is driven by context. Examples include: key opinion leader, fraud networks, perceptual mapping, and sentiment analysis.

Big data is driving the adoption of machine learning. Machine learning requires the integration of domain expertise with the data in order to expose “features” within the data that enhance the effectiveness of machine learning algorithms. The activity that identifies and organizes these features is called “feature engineering.” Many data scientists would not equate “data preparation” with feature engineering, yet there is a strong correlation to what an analyst does. A business analyst invariably creates features as they prepare their data for analysis: 1) observations are placed on a time line; 2) revenue is totaled by quarters and year; 3) customers are organized by location, by cumulative spend, and so on. Data Prep in this context is the organization of data around domain expertise, and is a critical input to the harnessing of big data through automation.

Data science is evolving and data engineering is now a thing. Data engineering focuses on how to apply and scale the insights from data science into an operational context. It’s one thing for a data scientist to spend time organizing data for modest initiatives or limited analysis, but for scaled up operational activities involving business analysts, marketers and operational staff, data prep must be a capability that is available to staff with a more generalized skill set. Data engineering supports building capabilities that enable users to access, prepare and apply data in their day-to-day lives.

“Data Prep” in the context of the above is enabling a broader community of data citizens to discover, access, organize and integrate data into these diverse scenarios. This broad access to data using tools that organize and visualize is a critical success factor for organizations seeking the business benefits of digitally enabling their organization. Future blogs will drill down on each of the above to explore how practitioners can evolve their data prep capabilities and apply them to business challenges.

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