Article | December 23, 2020
Nowadays, everyone with some technical expertise and a data science bootcamp under their belt calls themselves a data scientist. Also, most managers don't know enough about the field to distinguish an actual data scientist from a make-believe one someone who calls themselves a data science professional today but may work as a cab driver next year. As data science is a very responsible field dealing with complex problems that require serious attention and work, the data scientist role has never been more significant. So, perhaps instead of arguing about which programming language or which all-in-one solution is the best one, we should focus on something more fundamental. More specifically, the thinking process of a data scientist.
The challenges of the Data Science professional
Any data science professional, regardless of his specialization, faces certain challenges in his day-to-day work. The most important of these involves decisions regarding how he goes about his work. He may have planned to use a particular model for his predictions or that model may not yield adequate performance (e.g., not high enough accuracy or too high computational cost, among other issues). What should he do then? Also, it could be that the data doesn't have a strong enough signal, and last time I checked, there wasn't a fool-proof method on any data science programming library that provided a clear-cut view on this matter. These are calls that the data scientist has to make and shoulder all the responsibility that goes with them.
Why Data Science automation often fails
Then there is the matter of automation of data science tasks. Although the idea sounds promising, it's probably the most challenging task in a data science pipeline. It's not unfeasible, but it takes a lot of work and a lot of expertise that's usually impossible to find in a single data scientist. Often, you need to combine the work of data engineers, software developers, data scientists, and even data modelers. Since most organizations don't have all that expertise or don't know how to manage it effectively, automation doesn't happen as they envision, resulting in a large part of the data science pipeline needing to be done manually.
The Data Science mindset overall
The data science mindset is the thinking process of the data scientist, the operating system of her mind. Without it, she can't do her work properly, in the large variety of circumstances she may find herself in. It's her mindset that organizes her know-how and helps her find solutions to the complex problems she encounters, whether it is wrangling data, building and testing a model or deploying the model on the cloud. This mindset is her strategy potential, the think tank within, which enables her to make the tough calls she often needs to make for the data science projects to move forward.
Specific aspects of the Data Science mindset
Of course, the data science mindset is more than a general thing. It involves specific components, such as specialized know-how, tools that are compatible with each other and relevant to the task at hand, a deep understanding of the methodologies used in data science work, problem-solving skills, and most importantly, communication abilities. The latter involves both the data scientist expressing himself clearly and also him understanding what the stakeholders need and expect of him. Naturally, the data science mindset also includes organizational skills (project management), the ability to work well with other professionals (even those not directly related to data science), and the ability to come up with creative approaches to the problem at hand.
The Data Science process
The data science process/pipeline is a distillation of data science work in a comprehensible manner. It's particularly useful for understanding the various stages of a data science project and help plan accordingly. You can view one version of it in Fig. 1 below. If the data science mindset is one's ability to navigate the data science landscape, the data science process is a map of that landscape. It's not 100% accurate but good enough to help you gain perspective if you feel overwhelmed or need to get a better grip on the bigger picture.
Learning more about the topic
Naturally, it's impossible to exhaust this topic in a single article (or even a series of articles). The material I've gathered on it can fill a book! If you are interested in such a book, feel free to check out the one I put together a few years back; it's called Data Science Mindset, Methodologies, and Misconceptions and it's geared both towards data scientist, data science learners, and people involved in data science work in some way (e.g. project leaders or data analysts). Check it out when you have a moment. Cheers!
Article | June 18, 2021
Data is an important asset. Data leads to innovation and organizations tend to compete for leading these innovations on a global scale. Today, every business requires data and insights to stay relevant in the market. Big Data has a huge impact on the way organizations conduct their businesses. Big Data is used in different enterprises like travel, healthcare, manufacturing, governments, and more. If they need to determine their audience, understand what clients want, forecast the needs of the customers and the clients, AI and big data analysis is vital to every decision-making scenario. When companies process the collected data accurately, they get the desired results, which leads them to their desired goals.
The term Big Data has been around since the 1990s. By the time we could fully comprehend it, Big Data had already amassed a huge amount of stored data. If this data is analyzed properly, it would reveal valuable industry insights into the industry to which the data belonged.
IT professionals and computer scientists realized that going through all of the data and analyzing it for the purpose was too big of a task for humans to undertake. When artificial intelligence (AI) algorithm came into the picture, it accomplished analyzing the accumulated data and deriving insights. The use of AI in Big Data is fundamental to get desired results for organizations.
According to Northeastern University, the amount of data in the world was 4.4 zettabytes in 2013. By of 2020, the data rose to 44 zettabytes.
When there is this amount of data produced globally, this information is invaluable to the enterprises and now can leverage AI algorithms to process it. Because of this, the companies can understand and influence customer behavior. By 2018, over 50% of countries had adopted Big Data.
Let us understand what Big Data, convergence of big data and AI, and impact of AI on big data analytics.
Understanding Big Data
In simple words, Big Data is a term that comprises every tool and process that helps people use and manage vast sets of data. According to Gartner, Big Data is a “high-volume and/or high-variety information assets that demand cost-effective, innovative forms of information processing to enable enhanced insight, decision-making, and process automation.”
The concept of Big Data was created to capture trends, preferences, and user behavior in one place called the data lake. Big Data in enterprises can help them analyze and configure their customers’ motivations and come up with new ideas for the creation of new offerings. Big Data studies different methods of extracting, analyzing, or dealing with data sets that are too complicated for traditional data processing systems. To analyze a large amount of data requires a system designed to stretch its extraction and analysis capability.
Data is everywhere. This stockpile of data can give us insights and business analytics to the industry belonging to the data set. Therefore, the AI algorithms are written to benefit from large and complex data.
Importance of Big Data
Data is an integral part of understanding customer demographics and their motivations.
When customers interact with technology in active or passive manner, these actions create a new set of data. What contributes to this data creation is what they carry with them every day - their smartphones. Their cameras, credit cards, purchased products all contribute to their growing data profile. A correctly done analysis can tell a lot about their behavior patterns, personality, and events in the customer’s life. Companies can use this information to rethink their strategies, improve on their product, and create targeted marketing campaigns, which would ultimately lead them to their target customer.
Industry experts, for years and years, have discussed Big Data and its impact on businesses. Only in recent years, however, has it become possible to calculate that impact. Algorithms and software can now analyze large datasets quickly and efficiently.The forty-four zettabyte of data will only quadruple in the coming years. This collection and analysis of the data will help companies get the AI insights that will aid them in generating profits and be future-ready.
Organizations have been using Big Data for a long time. Here’s how those organizations are using Big Data to drive success:
Answering customer questions
Using big data and analytics, companies can learn the following things:
• What do customers want?
• Where are they missing out on?
• Who are their best and loyal customers?
• Why people choose different products?
Every day, as organizations gather more information, they can get more insights into sales and marketing. Once they get this data, they can optimize their campaigns to suit the customer’s needs. Learning from their online habits and with correct analysis, companies can send personalized promotional emails. These emails may prompt this target audience to convert into full-time customers.
Making confident decisions
As companies grow, they all need to make complex decisions. With in-depth analysis of marketplace knowledge, industry, and customers, Big Data can help you make confident choices. Big Data gives you a complete overview of everything you need to know. With the help of this, you can launch your marketing campaign or launch a new product in the market, or make a focused decision to generate the highest ROI. Once you add machine learning and AI to the mix, your Big Data collections can form a neural network to help your AI suggest useful company changes.
Optimizing and Understanding Business Processes
Cloud computing and machine learning help you to stay ahead by identifying opportunities in your company’s practices. Big Data analytics can tell you if your email strategy is working even when your social media marketing isn’t gaining you any following. You can also check which parts of your company culture have the right impact and result in the desired turnover. The existing evidence can help you make quick decisions and ensure you spend more of your budget on things that help your business grow.
Convergence of Big Data and AI
Big Data and Artificial Intelligence have a synergistic relationship. Data powers AI. The constantly evolving data sets or Big Data makes it possible for machine learning applications to learn and acquire new skills. This is what they were built to do. Big Data’s role in AI is supplying algorithms with all the essential information for developing and improving features, pattern recognition capabilities.
AI and machine learning use data that has been cleansed of duplicate and unnecessary data. This clean and high-quality big data is then utilized to create and train intelligent AI algorithms, neural networks, and predictive models.
AI applications rarely stop working and learning. Once the “initial training” is done (initial training is preparing already collected data), they adjust their work as and when the data changes. This makes it necessary for data to be constantly collected.
When it comes to businesses using this technology, AI helps them use Big Data for analytics by making advanced tools accessible and obtainable to help users gain insights that would otherwise have been hidden in the huge amount of data. Once firms and businesses gain a hold on using AI and Big Data, they can provide decision-makers with a clear understanding of factors that affect their businesses.
Impact of AI on Big Data Analytics
AI supports users in the Big Data cycle, including aggregation, storage, and retrieval of diverse data types from different data sources. This includes data management, context management, decision management, action management, and risk management.
Big Data can help alert problems and help find new solutions and get ideas about any new prospects. With the amount of information stream that comes in, it can be difficult to determine what is important and what isn’t. This is where AI and machine learning come in. It can help identify unusual patterns in the processes, help in the analysis, and suggest further steps to be taken.
It can also learn how users interact with analytics and learn subtle differences in meanings or context-specific nuances to understand numeric data sources. AI can also caution users about anomalies, unforeseen data patterns, monitoring events, and threats from system logs or social networking data.
Application of Big Data and Artificial Intelligence
After establishing how AI and Big Data work together, let us look at how some applications are benefitting from their synergy:
Banking and financial sectors
The banking and financial sectors apply these to monitor financial marketing activities. These institutions also use AI to keep an eye on any illegal trading activities. Trading data analytics are obtained for high-frequency trading, and decision making based on trading, risk analysis, and predictive analysis. It is also used for fraud warning and detection, archival and analysis of audit trails, reporting enterprise credit, customer data transformation, etc.
AI has simplified health data prescriptions and health analysis, thus benefitting healthcare providers from the large data pool. Hospitals are using millions of collected data that allow doctors to use evidence-based medicine. Chronic diseases can be tracked faster by AI.
Manufacturing and supply chain
AI and Big Data in manufacturing, production management, supply chain management and analysis, and customer satisfaction techniques are flawless. The quality of products is thus much better with higher energy efficiency, reliable increase in levels, and profit increase.
Governments worldwide use AI applications like facial recognition, vehicle recognition for traffic management, population demographics, financial classifications, energy explorations, environmental conservation, criminal investigations, and more.
Other sectors that use AI are mainly retail, entertainment, education, and more.
According to Gartner’s predictions, artificial intelligence will replace one in five workers by 2022. Firms and businesses can no longer afford to avoid using artificial intelligence and Big Data in their day-to-day. Investments in AI and Big Data analysis will be beneficial for everyone. Data sets will increase in the future, and with it, its application and investment will grow over time. Human relevance will continue to decrease as time goes by.
AI enables machine learning to be the future of the development of business technologies. It will automate data analysis and find new insights that were previously impossible to imagine by processing data manually. With machine learning, AI, and Big Data, we can redraw the way we approach everything else.
Frequently Asked Questions
Why does big data affect artificial intelligence?
Big Data and AI customize business processes and make better-suited decisions for individual needs and expectations. This improves its efficiency of processes and decisions. Data has the potential to give insights into a variety of predicted behaviors and incidents.
Is AI or big data better?
AI becomes better as it is fed more and more information. This information is gathered from Big Data which helps companies understand their customers better. On the other hand, Big Data is useless if there is no AI to analyze it. Humans are not capable of analyzing the data on a large scale.
Is AI used in big data?
When the gathered Big Data is to be analyzed, AI steps in to do the job. Big Data makes use of AI.
What is the future of AI in big data?
AI’s ability to work so well with data analytics is the primary reason why AI and Big Data now seem inseparable. AI machine learning and deep learning are learning from every data input and using those inputs to generate new rules for future business analytics.
"name": "Why does big data affect artificial intelligence?",
"text": "Big Data and AI customize business processes and make better-suited decisions for individual needs and expectations. This improves its efficiency of processes and decisions. Data has the potential to give insights into a variety of predicted behaviors and incidents."
"name": "Is AI or big data better?",
"text": "AI becomes better as it is fed more and more information. This information is gathered from Big Data which helps companies understand their customers better. On the other hand, Big Data is useless if there is no AI to analyze it. Humans are not capable of analyzing the data on a large scale."
"name": "Is AI used in big data?",
"text": "When the gathered Big Data is to be analyzed, AI steps in to do the job. Big Data makes use of AI."
"name": "What is the future of AI in big data?",
"text": "AI’s ability to work so well with data analytics is the primary reason why AI and Big Data now seem inseparable. AI machine learning and deep learning are learning from every data input and using those inputs to generate new rules for future business analytics."
Article | February 10, 2020
There are few movie scenes I can recall from my childhood, but I vividly remember seeing the 1968 Stanley Kubrick sci-fi movie 2001 A Space Odyssey in 1970 with my older cousin. What stays with me to this day is the scene where astronaut Dave asks HAL, the homicidal computer based on artificial intelligence (AI), to open the pod bay doors. HAL's eerie reply: I'm sorry, Dave. I'm afraid I can't do that.In that moment, the concept of man vs. machine was created, predicated on the idea that machines created by man and using AI could (eventually) defy orders, position themselves in the vanguard, and overthrow humankind. Fast forward to today. Within the information governance space, there are two terms that have been used quite frequently in recent years analytics and AI. Often they are used interchangeably and are practically synonymous.
Article | July 22, 2021
The software-as-a-service industry is rapidly growing with an estimate to reach $219.5 billion by 2027. SaaS marketing strategies is highly different from other industries; thus, tracking the right metrics for marketing is necessary. SaaS kpis or metrics measure an enterprise’s performance, growth, and momentum. These saas marketing metrics are have been designed to evaluate the health of a business by tracking sales, marketing, and customer success. Direct access to data will help you develop your business and show whether there is any room for development.
SaaS KPIs: What Are They and Why Do They Matter?
Marketing metrics for SaaS indicate growth in different ways. SaaS KPIs, just like regular KPIs, helps business to evaluate their business models and strategies. These key metrics for SaaS companies give a deep insight into which sectors perform well and require reassessment. To optimize any company’s exposure, SaaS metrics for marketing are highly essential. They measure the performance of sales, marketing, and customer retention. SaaS companies believe in the entire life cycle of the customer, while traditional web-based companies focus on immediate sales. The overall goal of SaaS companies is to build long-lasting customer relationships since most revenue is generated through their recurring payments.
SaaS marketing technology are SaaS marketers’ greatest asset if they take the time and effort to understand and implement them. There are essential and unimportant metrics. Knowing which metrics to pay attention to is a challenge. Once you get these metrics right, they will help you to detect your company’s strengths and weaknesses and help you understand whether they are working or not.
There are more than fifteen metrics one can track but make you lose sight of what matters. In this article, we have identified the critical metrics every SaaS should track:
This metric measures the number of visitors your website or page sees in a specific time period. If someone visits your website four to five times in that given time period, it will be counted as one unique visitor. Recording this metric is crucial as it shows you what type of visitors your site receives and from what channels they arrive. When the number of unique visitors is high, it indicates to the SaaS marketers that their content resonates with the target customers. It is vital to note, however, which channels these unique visitors reach your website. These channels can be:
SaaS marketers should, at this point, identify which channels are working and double down on those. Once you know these channels, you can allocate budgets and optimize these channels for better performance.
Google Analytics is the best free tool to track unique visitors. The tool enables you to refine by dates and compare time periods and generate a report.
Leads is a broad term that can be broken down into two sub-categories: Sales Qualified Leads (SQL) and Marketing Qualified Leads (MQL). Defining SQL and MQL is important as they can be different for every business. So, let us break down the definitions for the two:
MQLs are those leads that have moved past the visitor phase in the customer lifecycle. They have taken steps to move ahead and become qualified to become potential customers. They have engaged with your website multiple times. For example, they have visited your website to check out prices, case studies or have downloaded your whitepapers more than two times.
SQLs actively engage with your site and are more qualified than MQLs. This lead is what you have deemed as the ideal sales candidate. They are way past the initial search stage, evaluating vendors, and are ready for a direct sales pitch. The most crucial distinction between the two is that your sales team has deemed them sales-worthy.
After distinguishing between the two leads, you need to take the next appropriate steps. The best way to measure these leads is through closed-loop automation tools like HubSpot, Marketo, or Pardot. These automation tools will help you set up the criteria that automatically set up an individual as lead based on your website's SQL and MQL actions. Next, track the website traffic to ensure these unique visitors turn into potential leads.
The churn rate, in short, refers to the number of customers lost in a given time frame. It is the number of revenue SaaS customers who cancel their recurring revenue services. Since SaaS is a subscription-based service, losing customers directly correlates to losing money. The churn rate also indicates that your customers aren’t getting what they want from your service.
Like most of your saas KPIs, you will be reporting on the churn rate every month. To calculate the churn rate, take the total number of customers you lost in the month you’re reporting on. Next, divide that by the number of customers you had at the beginning of the reporting month. Then, multiply that number by 100 to get the percentage.
A churn is natural for any business. However, a high churn rate is an indicator that your business is in trouble. Therefore, it is an essential metric to track for your SaaS company.
Customer Lifetime Value
Customer lifetime value (CLV) measures how valuable a customer is to your business. It is the average amount of money your customers pay during their involvement with your SaaS company. You measure not only their value based on purchases but also the overall relationship. Keeping an existing client is more important than acquiring a new one which makes this metric important.
Measuring CLV is a bit complicated than measuring other metrics. First, calculate the average customer lifetime by taking the number one divided by the customer churn rate. As an example, let’s say your monthly churn rate is 1%. Your average customer lifetime would be 1/0.01 = 100 months.
Then take the average customer lifetime and multiply it by the average revenue per account (ARPA) over a given time period. If your company, for example, brought in $100,000 in revenue last month off of 100 customers, that would be $1,000 in revenue per account.
Finally, this brings us to CLV. You’ll now need to multiply customer lifetime (100 months) by your ARPA ($1,000). That brings us to 100 x $1,000, or $100,000 CLV.
CLV is crucial as it indicates whether or not there is a proper strategy in place for business growth. It also shows investors the value of your company.
Customer Acquisition Cost
Customer acquisition cost (CAC) tells you how much you should spend on acquiring a new customer. The two main factors that determine the CAC are:
Lead generation costs
Cost of converting that lead into a client
The CAC predicts the resources needed to acquire new customers. It is vital to understand this metric if you want to grow your customer base and make a profit. To calculate your CAC for any given period, divide your marketing and sales spend over that time period by the number of customers gained during the same time. It might cost more to acquire a new customer, but what if that customer ends up spending more than most? That’s where the CLV to CAC ratio comes into play.
CLV: CAC Ratio
CLV: CAC ratio go hand in hand. Comparing the two will help you understand the impact of your business. The CLV: CAC ratio shows the lifetime value of your customers and the amount you spend to gain new ones in a single metric. The ultimate goal of your company should be to have a high CLV: CAC ratio. According to SaaS analytics, a healthy business should have a CLV three times greater than its CAC. Just divide your calculated CLV by CAC to get the ratio. Some top-performing companies even have a ratio of 5:1.
SaaS companies use this number to measure the health of marketing programs to invest in campaigns that work well or divert the resources to those campaigns that work well.
Always remember to set healthy marketing KPIs. Reporting on these numbers is never enough. Ensure that everything you do in marketing ties up to all the goals you have set for your company. Goal-driven SaaS marketing strategies always pay off and empower you and your company to be successful.
Frequently Asked Questions
What are the 5 most important metrics for SaaS companies?
The five most important metrics for SaaS companies are Unique Visitors, Churn, Customer Lifetime Value, Customer Acquisition Cost, and Lead to Customer Conversion Rate.
Why should we measure SaaS marketing metrics?
Measuring marketing metrics are critically important because they help brands determine whether campaigns are successful, and provide insights to adjust future campaigns accordingly. They help marketers understand how their campaigns are driving towards their business goals, and inform decisions for optimizing their campaigns and marketing channels.
How to measure the success of your SaaS marketing?
The success of SaaS marketing can be measured by identifying the metrics that help them succeed. Some examples of those metrics are: Unique Visitors, Churn, Customer Lifetime Value, Customer Acquisition Cost, and Lead to Customer Conversion Rate.
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"text": "The five most important metrics for SaaS companies are Unique Visitors, Churn, Customer Lifetime Value, Customer Acquisition Cost, and Lead to Customer Conversion Rate."
"name": "Why should we measure SaaS marketing metrics?",
"text": "Measuring marketing metrics are critically important because they help brands determine whether campaigns are successful, and provide insights to adjust future campaigns accordingly. They help marketers understand how their campaigns are driving towards their business goals, and inform decisions for optimizing their campaigns and marketing channels."
"name": "How to measure the success of your SaaS marketing?",
"text": "The success of SaaS marketing can be measured by identifying the metrics that help them succeed. Some examples of those metrics are: Unique Visitors, Churn, Customer Lifetime Value, Customer Acquisition Cost, and Lead to Customer Conversion Rate."