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Multi Variate Regression

Data as a Product vs. Data as a Service – Justin Gage – Medium


The difference between providing “data” and providing “insights” (actually though)

Justin Gage

Jul 15 · 6 min read

WTF do data teams even do?

The job of an engineering team is to build effective, scalable products according to spec. The job of a product team is to understand and build solutions for users. What’s the job of a data team?

There’s no one or clear answer, which helps explain why the field is such a complete shit show right now. There are two broad mandates that data teams tend to get formed with (I’m being overly simplistic on purpose, bro):

1) Provide data to the company

2) Provide insights to the company

These might sound similar — and they’re certainly both important — but they necessitate completely different skillsets. In fact, I’m going to argue that the conflation of these two objectives is exactly what kills good data talent and confounds the hiring process.

Data as a Product: DaaP

Data as a Product is the simplest model to understand: the job of the data team is to provide the data that the company needs, for whatever purpose, be it making decisions, building personalized products, or detecting fraud. This might just sound like data engineering, but it’s not: Data Scientists also provide data as a product, just packaged in a different way.

In the DaaP model, company data is viewed as a product, and the data team’s role is provide that data to the company in ways that facilitate good decision making and application building. Some important characteristics of this model:

  • Data has an SLA (figuratively) from the entire data team, not just data engineering
  • Data flow is unidirectional, from the data team to the company
  • Domain expertise has limited benefits for data team members

This model is not new at all, is a staple of what BI teams do at big companies like Microsoft, and isn’t going anywhere. But there’s no such thing as a free lunch (unless you work in tech). DaaP has some tradeoffs:

  • Product-driven development, as opposed to stakeholder-driven development, limits the quality of partnerships and commoditizes relationships
  • Being a member of a data team that just provides data is boring AF and difficult to hire for
  • The perfect data model will never exist (sorry, optimists), and stakeholder understanding will always trail data team understanding

Over the past few years, companies have gotten wise to this, and have started using a different model (in consonance with DaaP) — Data as a Service.

Data as a Service: DaaS

In the Data as a Service model, the data team partners with stakeholder groups to tackle specific problems using data. Data team members have more functional experience, may support specific stakeholder groups (e.g. a Product Analyst and a Marketing Analyst), and are responsible for providing insight as opposed to rows and columns.

In a DaaS model, the focus of the data team is on answering questions as opposed to providing the tools to others to answer their own questions. To make this really concrete (because, let’s be honest, what does “stakeholder” even mean), a DaaS-based partnership might look like this:

  • The product team has a question: how should we redesign and improve our onboarding process?
  • The data team partners with product to identify what drives retention and long term value, holes in the current onboarding process, and suggestions for flow: using the data that the data team is responsible for

If the team was operating in a Data-as-a-Product model, they’d be providing access and intuitive use of the data that the product team can use themselves to answer their questions. It’s the difference between a service-oriented partnership and a product-oriented SLA.

Data Teams Grow Into Value Over Time

The difference between these two models — or in other words, the difference between providing data and insights — is twofold:

  1. Staff: do we hire experts in modeling and reporting, or experts in data-driven functional decision making? (background in product vs. background in data)
  2. Mandate: do we brand ourselves as providing insights and strategy, or as providing the data to make decisions?

For hiring in particular, DaaP and DaaS require completely different plans and head counts. It’s extremely rare to find exceptional data talent and exceptional functional talent together in the same human being. That’s why in practice these models are always mixed, but rarely well.

In fact, the combination of these two models often changes over time: data teams start out by providing reporting and data, and grow into strategic prowess over time.

It’s rare that teams will be able to execute on DaaS without first mastering DaaP, and I’ve seen this problem first hand: data teams will try to grow into strategic decision support without rock solid reporting and data models, and it just doesn’t work. But as DaaS becomes more of a standard (and commendable) objective for data teams, this discrepancy in hiring becomes more important to understand.

Hiring The Right People For Purpose

To execute on a DaaS strategy, you’ll need to hire analysts and scientists who:

  • Deeply understand the functional area that they support (product, marketing, support)
  • Are able to communicate with stakeholders and really understand their needs
  • Handle long term, nebulously defined, strategic research projects with little direction — the opposite of pulling tickets off of a backlog

Because these skillsets rarely overlap with excellence in data engineering and modeling, managers have a real decision to make here, which is why timing is critical. I’m going to repeat this because it’s one of the most common mistakes in data science hiring:

If you hire strategic, functional data people to do Data-as-a-Product things like reporting and modeling, they will be unhappy, they will leave, and you will fail.

Conversely, if you hire engineering oriented individuals without functional experience, they won’t be very good at partnering with stakeholders on critical decisions.

This — and failing to communicate the shift to DaaS to senior level stakeholders and leadership — is what tends to doom strategic data science. It’s actually really similar to hiring a product person as an early PM, only for them to realize that they’re really only needed for engineering work. They might be able to get it done, but they won’t be around to do it for long.

So, managers and leaders: be intentional about the purpose of the data team, your roadmap for changing that purpose, and who exactly you’re going to hire to get it done.

What is Dynamic Discounting?



So How Does Dynamic Discounting Actually Work?

Dynamic discounting is certainly a new buzzword within the finance/procurement space, but have you ever wondered how it actually works? Despite sounding complicated, it is a fairly straightforward concept and an important evolution from the world of Static discounts.

Out With The Old: Static Discounts

A traditional 2/10 net 30 discount is “static”. Simply put, if the buyer pays an invoice on day 10 (or before), they are entitled to take a 2% discount on the invoice value.

Once day 10 has passed, however, the opportunity for capturing discounts is lost.

A static discount looks something like this:


So what’s the problem?

Well, for buyers, a static discount is inflexible. For example, if the company had an influx of cash on Day 12, the opportunity for capturing discounts is off the table. Conversely, if the buyer is able to make the payment immediately (say on Day 1) the 2% discount does not reward the buyer accordingly.

Static discounts are equally inflexible for suppliers, who are unable to choose the appropriate timing of the early payment in line with their liquidity needs.

In With The New: Dynamic Discounts

Unlike static discounts, dynamic discounts are calculated on a sliding scale tied to the payment date. So the earlier a payment is made, the higher the discount on offer, and vice versa.

A dynamic discount looks like this:


What’s so special about Dynamic Discounts?

Well, for the buyer, it means the possibility of capturing discounts at any point during the payment term. Regardless of whether the buyer is able to pay on day 10 or day 25, they are able to capture fairly priced discounts.

At the same time, dynamic discounts allow suppliers to choose at which point they take early payment, with total visibility on pricing.

On the Xelix platform, all discounts are calculated dynamically, meaning far greater flexibility for buyers and suppliers alike. Our fundamental belief is that early settlement is an extremely powerful commercial strategy, yet under-utilized given the difficulties to manage effectively. Dynamic discounts are an important part of our solution that aims to unlock cash flow that is inefficiently tied up in the global supply chain.

If you want to find out more about how our platform works, get in touch below.

Algorithm Selection

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A #DataScientist in India briefing his findings to peers.

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