Your Ultimate Information Platform

8 Reasons You Need To Be Data-Driven

0

What Does Data-Driven Mean?

Data-driven is a strategic process of making informed business decisions using data to optimize performance.

It allows businesses to consistently improve their operations, increase revenue, improve customer service, and more. According to a study conducted by the MIT Center for Digital Business, companies that use data to make decisions report 4% higher productivity and 6% higher profits.

We’ll be looking into the reasons you should be more data-driven.

Let’s get right to it.

1. Make Quick and Informed Business Decisions

Decision-making is an essential part of every business. It involves multiple executives and shareholders. One wrong decision can cost you and your shareholders millions of dollars. Indecision is also a problem. While you debate with your team about what decision to make, your competition has already taken steps to get ahead.

Data-driven decision-making helps organizations make informed decisions quickly and confidently, eliminating any guesswork.

2. Enhance Business Performance

Using data to enhance your business can improve its efficiency. It reveals all the problems in a business’s operations and how to remedy them. Furthermore, data is analytical; hence it helps create historical trends and forecasts. Being data-driven also means you’ll be able to adapt to trends more proactively as you’ll be preparing beforehand.

3. Cut Costs and Increase Revenue Growth

Data can suggest new opportunities for revenue growth based on the latest trends in your market. It allows businesses to release new products or services in response to those trends. Additionally, Businesses can terminate products or services that are not generating enough revenue using data. In addition, it can also suggest possible steps to cut costs in all areas of the business.

4. Consistent Long-term Growth

Data allows businesses to see how they’re performing and whether they are meeting their benchmarks or not. Organizations that Wield the Power of Data-Based Decision Making consistently accomplish their goals leading to long-term growth.

5. Adaptability

Today’s digital world is a constantly changing landscape. Businesses must change with it to thrive. Data can help organizations predict any change in market trends and respond accordingly. Companies that make data-driven decisions can adapt to any situation with unrivaled capability.

6. Greater Transparency and Accountability

Data-driven decision-making leads to greater transparency and accountability across all departments in every organization. Additionally, it improves collaboration and teamwork between employees.

7. Improve Employee Engagement

We all know the famous “customer is king” mantra. It’s true as customers are critical to any business’s fate. But employees are just as important. After all, who serves the customers? Data allows you to get to know your employees and what challenges they might be facing at work that affect their productivity. You can then take steps to make your workforce happier to improve your organization’s ability to provide better customer service. Eventually, it will lead to greater customer satisfaction and brand growth.

8. Improve Brand Perception and Customer Experience

There are countless products and services in every market, giving customers several options. Data tells you everything about your customers and what they think of your brand. These insights will help you to get to know your potential customers. In addition, they will help to improve your product or service and customer service.

 

Challenges Faced by Businesses and Their Solutions

The Struggle to Adopt DDDM: Businesses struggle to adapt to this methodology, despite the value of Data-Driven Decision Making (DDDM). In their 2021 Big Data and AI Executive Summary report, NewVantage Partners reports that only:

  • 39% of companies are controlling data as an asset
  • 24% have built a data-driven culture
  • 24% have created a data-driven company

Data, when effectively used, is undoubtedly a valuable resource to any business. However, creating a data-driven culture is easier said than done. TechCrunch recently did a survey in which they reported that 72% of big organizations have failed to create a data-driven culture. This challenge is usually present in large companies with existing cultures and practices. The leaders at these companies believe that they can drive business growth without looking at the data. Start-ups and new companies are also part of this struggle. The Harvard Business Review reports that some organizations struggle to create a data-driven culture using data.

The Solution: Change begins at the very top. Company leadership needs to start practicing a data-driven culture and spread it amongst employees. In addition, leadership should encourage all employees to share their data-driven insights.

Too Much Data. No Infrastructure: Due to digitization, the speed of data generation has increased. International Data Corporation (IDC) predicts that world data will grow to 175 trillion gigabytes by 2025. Most organizations lack the infrastructure to efficiently store/manage the increasing data volume, variety, velocity, and complexity.

The Solution: Hire a dedicated team of data analysts if you can afford it. If you can’t afford it, start with just one data analyst.

No Strategy for Data Collection and Usage: Data is everywhere. It is easy for organizations to get caught up in collecting data without a plan for its usage. Organizations that don’t have a plan end up with data debts. Data debt refers to the amount of money required to fix data problems. It stops organizations from becoming data-driven and reaching their goals.

Data Scientist A. E. Musa believes that a good strategy should focus on “defining the business-critical questions that need to be answered and identifying the challenges that need to be addressed, evaluating your data needs and readiness, defining how data will be sourced, collected, secured and transformed into actionable insights, evaluating your technology infrastructure requirements, data competencies, and governance.”

The Solution: Organizations should have a clear strategy for data collection and its usage.

 

Increase in Demand for Data Professionals

According to Tableau, the amount of information available has never been greater, but it’s also more complex. Therefore, companies are looking towards competent data professionals to help them turn this information into actionable intelligence. However, the demand exceeds the supply of talented data professionals by a wide margin. According to Investopedia, this has led to companies offering lucrative salaries to data analysts, even for entry-level candidates. If you’re looking to start a career in this field, a Master of Business Administration (MBA) with a Concentration in Data Analytics is a good start.

Conclusion

In today’s world, data is central to all businesses. DDDM is one of the best ways organizations can maintain their competitive edge, outperform their competitors, crush every benchmark, and position themselves to become market leaders. However, fostering a data-driven culture is no easy task and will require time and patience. It will not happen overnight. To become a data-driven organization, you must take deliberate and consistent steps that deliver over time.

If you like this article and wish to add your two cents regarding data-driven decision-making, feel free to add your opinions in the comments section below.

 

Leave A Reply

Your email address will not be published.