From Data to Action — The Many Flavors of Latency
By Tim Wilson on in Analysis with 3 Comments
I was flipping through the slides from a workshop that Teradata put on at The Ohio State University several months ago, and one of the diagrams jumped out and resonated with me. As I did some digging, it turns out this diagram has been floating around since at least 2004, if not for longer. It was created by Dr. Richard Hackathorn of Bolder Technology Inc. (BTI).
There are a slew of lousy recreations of the diagram (the original diagram wasn’t so hot, either). Rather than recreating it myself, I just snagged one of the cleaner ones, which came from a 4-year-old TDWI article:
The point of the diagram, as well as of most of the derivative works that reference it, is that the value of information has a direct relationship to the speed with which you can react to it. And, there are three distinct things that have to happen between the business event that triggers the information and ation actually being taken.
I don’t know if there is any real math or science behind the shape of the curve. As diagrammed, this says that you’ve already lost most of your value by the time you get to the “decision latency” point in the process. I don’t know that that is necessarily true in most cases. The diagram supports the assertions by all of the various BI/data tool vendors that data needs to be available in near real-time (and, of course, that’s something that all of the vendors claim they are better at than their competition).
But, is the data latency and analysis latency really the big value driver for marketers? In some cases, the data latency is a structural issue — conducting a campaign where the people exposed to it are likely to not convert for anywhere from 1 to 30 days…means you really need to wait for 30 days to see how the campaign played out. Analysis latency is real…but this really can be broken into two pieces: 1) the time to do the analysis and get it packaged for delivery, and 2) the time to schedule/coordinate the information delivery. And, then, certainly the decision latency is real.
In short, the “action time” components totally make sense, and it’s good to understand them. The shape of the curve, though, doesn’t necessarily stand up to scrutiny when looked at through a marketer’s lens.