A robust growth in opportunities to collect and leverage digital knowledge and information has led enterprises to change their decision-making process. They have come to rely more on data and less on their intuition, like earlier days. Managers at different levels are consuming data and analytical output in numerous ways. Most of the enterprises today attribute their success to the use of databases and cutting-edge analytical tools.
Entrepreneurs need to open their eyes to data’s endless possibilities. It is important to, first, have a goal in mind prior to data collection. Therefore, one must always have a clear analytical objective. What is it you want to achieve? Do you want to assess an opportunity? The clearer your end objective is, the more rewarding your analysis would be.
Data-driven decisions are very helpful as they help you to deal with enormous amounts of data with precision and are quite time-saving. They serve as backups of information, in case any of your outputs seem misleading. They help in deriving better insights also.
Today, data-driven decisions are mainly driven by factors, namely:
- Improved customer experience
Enterprises are turning to data-driven decision making in order to create seamless and connected customer interactions across all devices and platforms. Big data is one of the most vital ways to achieve this goal.
- Identifying new opportunities
By combining data from an organization’s customer relationship management platform with the publicly available data, analysts can open new micro markets and discover rare opportunities for growth.
- More accurate attribution
Big Data helps marketing executives learn about the marketing efforts that drive conversions and sale. This allows them to focus their efforts on the channels and campaigns that deliver results.
How to build a successful strategy for data-driven decisions?
As enticing as data-driven-decision making might seem, there are a few supportive capabilities that firms must possess in order to fully exploit the benefits of data and analytics. First, enterprises must be able to identify, combine, and manage multiple sources of data. They must also have the capability to build advanced-analytics models for predicting and optimizing outcomes.
Besides these, another very important aspect is that the management must possess the efficiency to transform the organization so that the data and models actually yield better decisions. For this, an enterprise must possess a clear strategy to use data and analytics to compete and the deployment of the right technology architecture and capabilities.
It is important for the enterprises to source the correct data in a creative way, including those from external and new sources of data. Companies can encourage a more comprehensive look at data by mentioning in specific, the business problems and opportunities that they wish to address.
- Build appropriate models to optimize business outcomes
Firms need to remember that along with data, they need to give importance to the performance improvements and competitive advantage that arise from analytics models. These allow managers to predict and optimize outcomes. It is also important to keep in mind that the most effective approach to building a model starts with identifying a business opportunity and determining how the model can improve performance.
- Transform companies’ capabilities
Using big data and analytics requires thoughtful organizational change that can be brought about by developing business-relevant analytics, embedding analytics in simple tools for the front lines and developing capabilities to exploit big data. Firm would need a multi-faceted approach to adjust cultures and mindsets to the changing scenario. This would include training, role modelling by leaders, and incentives and metrics to reinforce behavior.
However, it is always advisable to concentrate on targeted efforts to source data, build models, and transform the organizational culture. These efforts help in maintaining flexibility. This is essential as the information along with the technology will keep on growing and changing, while yielding new opportunities. As more and more firms learn the core skills of using big data, building superior capabilities will become a decisive competitive asset.