Data-driven
decision-making

Once you begin collecting and analyzing data, you’re likely to find that it’s easier to reach a confident decision about virtually any business challenge, whether you’re deciding to launch or discontinue a product, adjust your marketing message, branch into a new market, or something else entirely.

Data performs multiple roles. On the one hand, it serves to benchmark what currently exists, which allows you to better understand the impact that any decision you make will have on your business.

Beyond this, data is logical and concrete in a way that gut instinct and intuition simply aren’t. By removing the subjective elements from your business decisions, you can instill confidence in yourself and your company as a whole. This confidence allows your organization to commit fully to a particular vision or strategy without being overly concerned that the wrong decision has been made.

Just because a decision is based on data doesn’t mean it will always be correct. While the data might show a particular pattern or suggest a certain outcome, if the data collection process or interpretation is flawed, then any decision based on the data would be inaccurate. This is why the impact of every business decision should be regularly measured and monitored.

When you first implement a data-driven decision-making process, it’s likely to be reactionary in nature. The data tells a story, which you and your organization must then react to.

While this is valuable in its own right, it’s not the only role that data and analysis can play within your business. Given enough practice and the right types and quantities of data, it’s possible to leverage it in a more proactive way—for example, by identifying business opportunities before your competition does, or by detecting threats before they grow too serious.

There are many reasons a business might choose to invest in a big data initiative and aim to become more data-driven in its processes. According to a recent survey of Fortune 1,000 executives conducted by NewVantage Partners for the Harvard Business Review, these initiatives vary in their rates of success.

One of the most impactful initiatives, according to the survey, is using data to decrease expenses. Of the organizations which began projects designed to decrease expenses, more than 49 percent have seen value from their projects. Other initiatives have shown more mixed results.

“Big data is already being used to improve operational efficiency,” said Randy Bean, CEO and managing partner of consultancy firm NewVantage Partners, when announcing the results of the survey. “And the ability to make informed decisions based on the very latest up-to-the-moment information is rapidly becoming the mainstream norm.”