As the markets evolve, and the surge of data available for gathering insights expands at an accelerated rate, the need for optimizing data and gaining valuable insights is exceedingly essential. While data is currently being used in making informed business decisions, a more advantageous route is to make data and the insights gained from it to take on a more prominent role. To alter data’s role from acting as a support system in decision making, towards driving the decision making process. This is where data driven decision making and its advantages take Centre stage.
What is Data Driven Decision Making and Why Should it be Used?
Data driven decision making starts with gathering and analyzing data based on the company’s established goals in order to determine trends and patterns. These trends and their derived conclusions are then used in developing strategies to work towards achieving the company’s goals by tweaking how the organization operates. Data driven decision making includes differentiating valuable information from noise and utilizing that information to drive decisions. In short, decisions should be backed by tangible reports that support the direction, aims and goals for the company.
Implications in Using Data Driven Decision Making
In adapting this approach, using data as the backbone of making decisions helps an organization with continual growth to drive businesses forward. In operating within an everchanging landscape, companies must have the ability to adapt to any number of factors in progressing towards their goals. This means knowing what variables they’re working with and knowing what to do with that information as it pertains to and may affect their company.
One key industry that will benefit from such decisions derived from analyzing data are supply chains. As the markets and trends are in constant flux, tremendous volumes of data can be gathered. For instance, information regarding the consumer market alongside other outside economic factors that may impact the success of supply chains. In response to this flow of information, supply chains can benefit by leveraging data analytics. Specifically, driving decisions by analyzing pre-existing data and taking advantage by not only reacting to that data, but also in being proactive and using insights in order to make predictions. That is, forecasting into the future in order to determine which areas can be optimized in order to run a more efficient operation. In extracting useful information, supply chains can not only use data to see where their company stands, but to use forecasting to predict the direction of the company and see what changes need to be put in place to deliver results. Furthermore, supply chains can leverage information to optimize their business in responding to clients’ needs and to deliver a product from a supplier towards the consumer based on new data and insights. By having a clear direction and facts to back up decisions, supply chains are better able to understand factors including customer behaviour, order rates, reviews and so forth in order to then optimize those areas. A few other key advantages from making decisions derived from big data are that it offers insight into areas such as risk management, process improvement, optimizing costs, and becoming more efficient as a whole. Using data as the backbone of decision making helps prevent against biases from taking the wheel and driving the supply chain’s decisions. Instead, decisions are backed by concrete facts and can be tracked to make sure supply chains stay on track and monitor progress.
As a whole, using data as the driving force behind making decisions helps supply chains in defining objectives; finding relevant data to answer unresolved questions; working towards measurable goals; redefining and mending the approach towards achieving success; and evolving as new trends emerge. In using proper techniques, businesses can transform data into actionable results. In leveraging data and in taking these actionable steps, businesses can create new business opportunities, generate more revenue, and use forecasting in analyzing an ever-changing market in order to predict future trends and optimize supply chain operations. In the end, you can rely on your gut, but why not take advantage of big data in making your business more successful?
Implications of making your Business more Data Driven:
While you may have access to valuable sources of data, you need the right tools in order to analyze data correctly and to extract information that’s easy to understand. This process includes collecting raw data; extracting and formatting that raw data; analyzing relevant trends and patterns; and creating reports and visualizations in order to make informed business decisions.
While there are worthwhile insights to be uncovered, the ever-increasing volume of data to be examined may be overwhelming. Furthermore, in taking steps towards being a data driven organization, there are multiple roles to be filled including: data scientist, data analyst, business analyst and so forth. Having a team built with foundational knowledge of understanding data helps drive insightful decisions across all disciplines. Consequently, in shifting towards data driven decision making, companies need to become more literate with data in understanding what data means and what to derive from analytics. As such, this may require effective and ongoing training programs. By understanding the roles needing to be filled and by implementing proper techniques and reporting tools, your organization can make the right decisions backed by concrete data to become more responsive and more effective in delivering results.
In the end, we have access to enormous amounts of data and resources to analyze it. This data and these resources are an untapped resource that can be taken advantage of in order to make informed decisions and business strategies. With a rise in the amount of data that’s available at our fingertips, the need for more sophisticated methods to analyze data are needed now and certainly will rise in the future. In shifting the paradigm towards making decisions based off of data driven decisions, businesses can adapt to new information and evolve as new insights are gained from an ever-changing market in order to drive their businesses forward and open new opportunities.