“In God we trust, all others must bring data” – Edward Demming
Today, data is an important part of our lives. We send and receive data through messages, videos, email and many other forms of communication. It is at our fingertips. So much so, that ‘data’ has become a buzzword in recent times.
Due to the explosion of business data, companies need data analytics platforms that help them to make sense of the huge amounts of information. By leveraging the insights of the data that is available at your fingertips, you can make informed decisions in your business that will lead to commercial growth. Collection and analysis of consumer data improve the way you market your products and services.
Well, as you may know by now, this is easier said than done. Even if you have all the data in the world, it possible to make instinctive decisions that can prove detrimental to your business in most cases. While it is acceptable to make a few decisions based on your gut, it is always advisable to base a majority of your decisions on facts and figures that are related to the goals and initiatives of your company. So it is necessary for all businesses to develop a data-driven decision making capability.
Importance of Data-Driven Decision Making
DDDM or Data-Driven Decision making involves making decisions that are based on hard data rather than just shooting in the dark. This data can be collected based on measurable goals or KPIs and can be used to develop strategies that benefit your business. Yes, understanding those numbers and making sense out of them can be a bit challenging at first. Jack Dorsey – the founder of Twitter while sharing his experience with Stanford had said that for the first 2 years, without a proper system administration dashboard, they were “flying blind”. But learning to run reports and understanding critical numbers proved beneficial for them as they could then actually see what was happening within and outside the company.
DDDM can open many doors for your company if you have a specific goal. To thrive, you should know where you want to go, why you’re going there and what kind of effort you are willing to put into the journey.
How to harness the power of data in business
1) Overcome biased behaviour:
Let data be democratic so that all people regardless of their technical skills can access it and give credible feedback. This will help you as a leader to make informed decisions. This can be done through innovative dashboard software that helps you to visualize complicated tables and graphs. Drop out all preconceived notions and study the data that can give you new insights to your business.
2) Capture the right data:
Identifying and capturing the right data is an important part of building a credible data model. This can be a challenge since web visits, email clicks and video views are not always correct indicators of success in marketing. Today many new online data points are readily available that allow you to engage in marketing tactics with good returns. For eg: consumer geospatial data, sentiment tracking, search analysis, click tracking and advanced attribution are some of the data points that help you to increase consumer footfall, understand consumer perceptions, analyse and manage content. These data points can help you to bring about significant changes in your marketing tactics.
3) Use the right analytic methods:
Once you have all the data, you need to apply appropriate analytical methods. You need to identify the right analytical method that would suit your business the most – be it machine learning or statistical. Only make sure that the method helps you to translate your company’s data into insight and value accurately.
4) Present your analysis in a meaningful way:
You’ve dug and gleaned valuable insights from your data. But you also need to present your message to your team in a clear manner so that your data acumen can be used for decision making. For this, you’ll need great data visualization software. Using this software you can tell your story to your team through an online dashboard. The management can then make the right data-driven business decisions.
All said and done, the hardest part is decision-making. You need to apply all your findings to make the right business decisions that are aligned to the company’s vision. Ensure that you are on the track and then turn your data into action.
Once you make data-driven decisions, you’ll find your organization growing by leaps and bounds. Following are some of the benefits that are a direct result of utilizing data analytics in your business:
1) Improved Service Level Performance:
Data analytics can help you to predict whether you can meet consumer demands. You’ll know where to focus your continuous improvement efforts contributing to customer service optimization. By using data analytics you can focus on improving customer satisfaction, determine the optimum inventory level and thus achieve operational excellence.
2) Improved lead generation:
Companies that use data analytics for value creation in B2B sales generate remarkable results in lead generation. Analytics helps to improve the accuracy of lead generation and to automate presales processes to identify the right customer at the right time. Companies can use historical market information to develop a detailed view of each area’s sales prospects. You can combine data based on the customer’s previous history with external data such as news reports or social media to give you an overall understanding of the customer. You can then pinpoint which leads truly matter and guide your sales strategy accordingly.
3) Creative competitive advantage:
Once you have the right sales strategy in place you will have customers who are satisfied and loyal. This ability to leverage analytics and to use this intelligence can give you disruptive new products and services that give you the upper edge over your competitors.
4) Remove inefficacies of the system:
An organization that implements data analysis will find greater productivity across manufacturing, operations, distribution, sales and marketing functions. New services can then be streamlined to make them less expensive and more customer-friendly.
5) Risk Management:
Today’s unprecedented and risky business environment calls for a sturdy risk management process. Regardless of the sector, all businesses need to have a proper risk management plan in place. Foreseeing a risk and mitigating it is critical if the business is to remain profitable. Risk management is much more than having the right insurance. The tools available in data analytics allow businesses to quantify and model the risks that companies face every day thus enabling them to enhance the quality of risk management models.
Wrapping our minds around the power of data to drive disruptive change is itself a challenge. The organizations that rely on data collection and analysis can solve complex and dynamic problems. If your business was once slow-moving and driven by intuition, data analysis techniques can introduce insight, vigour and efficiency propelling your business to new heights.