Data is taking over the planet. The data plays a key role everywhere, from the articles you read to the movies you watch, the status updates you publish, and the goods you purchase. With the emergence of digitization, businesses, people, and governments are producing vast volumes of data. But do all of these businesses utilize data to their advantage? No, not in the slightest.
According to Gartner, over 85% of Big Data projects fail. One of the primary causes of failure in most cases is the inability to gather the appropriate data based on quantifiable goals, analyze it, and use it to generate business-friendly strategies.
In this blog post, we will define data-driven decision-making, discuss the advantages for your company, and provide different approaches for making better business decisions.
What is data-driven decision-making?
Data-driven decision-making is a method that uses data to mentor businesses in the right direction in making well-informed decisions rather than just relying on someone’s views and perspectives.
DDDM, also known as information-based decision-making, is gathering historical data to assess patterns and make judgments for the future based on what has previously worked – as opposed to making choices based only on intuition, opinion, or experience. Businesses that use DDDM put data at the center of every decision.
What business decisions can companies make using data?
Now that you know what data-driven decision-making is, the next step is to determine how your organization might utilize data to make decisions on expanding its operations.
Ask these questions for yourself before you start utilizing the data for decision-making.
Finance: What is the least expensive approach to advertising a new product or acquiring new employees?
Growth: What are the things that are hindering growth? Are your company’s objectives likely to be impacted by the additional features you’re planning? How can you increase client loyalty?
Which marketing and sales channel yields the highest return on investment? What sales strategies provide the most leads?
Customer service: Which method of handling support issues is the most economical? What media outlets speed up response times?
How may data-driven decision-making help you?
Risk is inevitable in any business, but data-driven decisions reduce the vulnerability to risky choices that may go wrong. Consider the scenario of developing a go-to-market strategy for a SaaS business. Look at your prior product feature releases rather than starting from scratch, hoping a new plan succeeds. Iterate what worked. Never put into practice something that didn’t work.
Although 91 percent of businesses claim that data-driven decision-making is crucial to the expansion of their operations, only 57 percent of companies claim to be data-driven in their decision-making.
Businesses that are currently data-driven but are not growing or making money must be lacking one of the following.
1) Increasing data accessibility
Any project’s data insights must be readily available to all team members so that everyone has the chance to assess the data and come to informed conclusions.
2) Adding attractiveness to data
It will be difficult for those without technical expertise to interpret and correctly analyze data. It can be game-changing to create an atmosphere that aids in developing these abilities and understanding such information. Employee development would be aided by providing the right tools for them to use and encouraging them to understand and try out the analysis and solve analytical challenges.
3) Immediate resolution of major data-access concerns
The availability of even fundamental data is the most frequent issue we receive from employees in various divisions. This condition still exists despite several initiatives to democratize data access within businesses. Companies can address this issue by simultaneously allowing access to a small number of crucial data and analyses.
4) Improving the adaptability and relevance of data
Employees should be able to identify issues and find solutions through data analysis. Delaying problem-solving would decrease productivity and lead to bad outcomes. Employees should assume the data they are looking at is incorrect if it doesn’t offer any insight. Therefore, it’s crucial to protect relevant data. The business’s KPIs should enable it to advance, expand, or resolve an issue. All teams and departments must collaborate to achieve this level of agility.
The future of data-driven businesses
Companies are more focused on data and seeking a data-driven corporate ecosystem due to changes in the workplace and technological improvements. Companies should comprehend and establish KPIs to increase earnings and advance the success ladder. In the upcoming years, firms will have hurdles in figuring out how to use the data at their disposal to acquire insightful data.
Therefore, companies turn to data-specialized individuals like data architects, data scientists, and data analysts to address these issues. The next ten years’ work will primarily focus on managing the corporation’s data and assisting the association in using data in novel ways to solve problems and take advantage of new opportunities.