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Summary: Don’t Tell Your Data Team’s ROI Story by Barry McCardel from HEX
How and whether you can measure ROI depends on whether data is part of your core business.
Original article: Don't Tell Your Data Team's ROI Story - Blog | Hex by Barry McCardel
Motivation: Data leaders often get asked about the ROI of their team’s work to justify the budget for new tools or new hires. How and whether you can measure ROI depends on whether data is part of your core business.
1) When the data team’s work is core to the business
If you sell data as a product, this team’s work directly relates to what the company is selling, and therefore, you can measure ROI.
2) When the data team is a support function
If the data team works as a support function, their impact on the bottom line is indirect, and ROI can’t be measured
you can’t put a $-amount on the impact of a better schema, a more reliable pipeline, or better infrastructure
instead, let others estimate your ROI — your partners (marketing, product, ops) should line up to help you justify your ROI and help you get the required budget approved; if they don’t, it’s not a metric problem but a problem of:
being siloed as part of a centralized data team and detached from business outcomes; re-org into decentralized teams aligned towards a specific business function helps improve relationships with stakeholders from those departments
being disconnected from the company’s OKRs; if you can tie data objectives to OKRs, it makes it clearer how the data team impacts functional outcomes
misaligned priorities — data team should be involved with other teams’ planning cycle to help align on data team’s priorities with the business and ensure that both teams stay focused on strategic OKR-related projects rather than getting distracted by ad-hoc requests and “novel insights”
Core message & CTA
“Next time you get asked to justify the ROI for your team, don't. Sit back, and let others tell the story for you.”
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