Data-driven decision-making (DDDM) is the process of using insights drawn from data to aid the process of decision making in an organization.
In as early as 2016, a survey by PwC revealed that data-driven organizations are three times more likely to experience significant improvements in the decision-making process when compared to those that don’t. According to the same survey, data-driven decision making brings together the right combination of “mind and machine”.
If you haven’t yet embraced data in the way you should for decision making, here are some reasons why you should:
Every organization collects data in some way or the other
Believe it or not, your ops staff are spending 2-3 hours a day collecting data of some kind. In most cases, the data simply goes into a folder, for reporting or record-keeping. In fact, almost 54% of the data collected by a company goes “dark” or unused. Why not leverage it instead? By putting your data to work, you will be amazed at how much it can help you improve your operational efficiency and fuel your business growth!
Start with the data you are already collecting to use in decision making and you can gradually expand your databases depending on the need.
Data can help you make informed, unbiased decisions
Usually, the process of decision making is highly influenced by preconceived notions, suggestions of superiors, our own intuitions, and your team’s past experiences. While MIT and Harvard experts agree that intuition cannot be neglected altogether (for in some ways, even intuition is data-driven), relying on data means that your decision eliminates bias and is backed up by hard facts. Reducing the effect of bias in decision making can help you achieve up to 7% higher returns (McKinsey). Your only challenge here is to ensure that the data you collect is accurate and without errors – a problem that can be solved by using automation instead of manual methods.
As long as your data is authentic, you can be assured that it will make a difference to your bottom line.
Data helps you learn from the past and make predictions for the future
The power of data is that it can not only be used to study historical trends for decision making, but also to build futuristic predictions with the right tools. While it is true that we cannot foresee the future, it is possible to make near-perfect estimations using predictive and prescriptive analytics.
Leverage the right technology to auto-generate data-driven insights through easy-to-understand graphical representations in intuitive dashboards.
DDDM contributes to increased productivity and profitability
The Wall Street Journal records an MIT study that proved primarily data-driven benefited from 4% higher productivity as well as 6% higher profits. If you do not collect enough within your organization to use for decision making, opt for big data resources. According to studies by BARC, big data can help increase profit by 8–10% and ensure an overall cost reduction of up to 10%.
In short, the effectiveness of using data in decision making is time-tested and proven.
DDDM can be used to enhance multiple areas of your business
From zeroing in on cost-effective measures for different processes to identifying the right channels for marketing your new product with maximum ROI, and enhancing turnaround time for customer service – data-driven decision making can be utilized to improve all areas of your business.
We recommend that you begin with internal processes, such as reviewing employee productivity based on the number of working hours and then branch out to other areas gradually.
Getting Started with Data-driven Decision Making
- Find out what data you already collect, identify ways to incorporate it into your decision-making process
- Assess your data collection methods, improve it using automation technology to reduce time taken for collection, improve accuracy of data, and effectiveness of the overall process
- Use a data integration tool to bring all your collected data to one common platform in a readily usable format and maintain a master repository for east access
- Incorporate business intelligence and use intuitive dashboards to make data analysis and visualization a hassle-free step in the process.
At CloudNow, we offer automation, data integration, data analysis. intuitive dashboards and much more for data-driven decision making through a holistic Business Continuity and Operational Resilience (BCOR) solution. To make the most of your data today, get in touch with us now!