Metadata
- Author: Tristan Handy
- Full Title:: Two Ways of Measuring Data Team Value
- Category:: 🗞️Articles
- Document Tags:: Measuring a data team impact
- URL:: https://roundup.getdbt.com/p/two-ways-of-measuring-data-team-value
- Finished date:: 2023-04-07
Highlights
Data initiatives are too focused on democratizing access to information and not focused enough on driving business impact (View Highlight)
If your data team is purely focused on democratizing access to information, its spend needs to be a very modest % of revenue. (View Highlight)
But other G&A teams don’t have impact on productivity of teams
If you think about other G&A teams there is a natural way to conceptualize the right amount of spend: as much as required but no more (View Highlight)
On the other hand, functions related to acquiring or serving customers (sales / marketing / success) are evaluated on metrics that look more like ROI. And decisions are made on marginal ROI. So: if I hired one more sales person, how much would my revenue increase? If I spent $100k less on advertising, how much would my revenue decrease? Etc. Data professionals can be valuable in this way too! There are many environments where one new data person can generate measurable ROI—imagine data practitioners embedded in product teams running experiments, or data practitioners embedded in marketing teams breaking into new channels. (View Highlight)
At a modestly-sized public software company, total G&A spend is maybe 10-12% of revenue, so this type of data spend (headcount and software) should probably be somewhere in the vicinity of 1% of revenue. But anything beyond this needs to be fiercely justified and defended on the basis of a specific claim about marginal ROI. (View Highlight)