Data-driven decision making: Succeed in the digital era
What is data-driven decision making?
Data-driven decision making (DDDM) is defined as using facts, metrics and data to guide strategic business decisions that align with your goals, objectives and initiatives. When organisations realise the full value of their data, that means everyone – whether you’re a business analyst, sales manager, or human resource specialist – is empowered to make better decisions with data, every day. However, this is not achieved by simply choosing the appropriate analytics technology to identify the next strategic opportunity.
Your organisation needs to make data-driven decision-making the norm – creating a culture that encourages critical thinking and curiosity. People at every level have conversations that start with data and they develop their data skills through practice and application. Foundationally, this requires a self-service model, where people can access the data they need, balanced with security and governance. It also requires proficiency, creating training and development opportunities for employees to learn data skills. Finally, having executive advocacy and a community that supports and makes data-driven decisions will encourage others to do the same.
Establishing these core capabilities will help encourage data-driven decision making across all job levels so business groups will regularly question and investigate information to discover powerful insights that drive action.
The importance of data-driven decision making
The amount of information collected has never been greater, but it’s also more complex. This makes it difficult for organisations to manage and analyse their data. In fact, NewVantage Partners recently reported that 98.6 per cent of executives indicate that their organisation aspires to a data-driven culture, while only 32.4 per cent report having success. A 2018 IDC study also noted that organisations have invested trillions of dollars in modernising their business, but 70 per cent of these initiatives fail because they prioritised technology investments without building a data culture to support it.
In the pursuit of becoming data-driven, many enterprises are developing three core capabilities: data proficiency, analytics agility and community. Transforming how your company makes decisions is no easy task, but incorporating data and analytics into decision-making cycles is how you will see the most transformative impact on your organisation. This level of transformation requires a dedicated approach to developing and refining your analytics programme.
Organisations benefiting from data-driven decision making
Thanks to modern business intelligence, organisations are inching closer and closer to understanding the value of data-driven decision making across all departments and roles. Here are a few examples of organisations that are effectively leveraging the value of their people and their data.
Lufthansa group increased organisational efficiency by 30%
Lufthansa Group is a global aviation group that at one point, had no uniformity with analytics reporting across its 550-plus subsidiaries. Using one analytics platform, they increased efficiency by 30 percent, gained greater flexibility in decision making and increased departmental autonomy. “We’re in a stronger position to create and design our analyses independently, and a lot of people now understand the central importance of data for the success of Lufthansa,” shared Heiko Merten, Head of BI Applications in Sales.
Providence St. Joseph Health improved quality measures and cost of care
Providence St. Joseph Health, a 51-hospital system with 100,000-plus caregivers, delivers high-quality, cost-effective healthcare to millions of patients annually. Patient data resides in many systems, but managing and integrating growing amounts of data is a complex task. Providence built dashboards accessible to the hospital system that make quality and cost data more transparent so providers can substantially improve quality measures and reduce cost of care. “We’ve moved the needle on the difficult-to-improve quality outcomes across the system and I believe part of that is because we’re all speaking a common language,” explained Dr. Ari Robicsek, Chief Medical Analytics Officer.
Charles Schwab Corporation increased their speed to business insights
The Charles Schwab Corporation is one of the largest publicly traded financial services firms based on client assets. Data is fundamental to enhancing the customer experience, driving operational leverage and reducing risk. With growing staff interest in data and analytics, they rethought their capacity planning and data support model, opting for an enterprise BI platform that supports analysts and novice business users. “Without our visual analytics solution, we would be stuck analysing enormous amounts of data in spreadsheets. Instead, our dashboards provide clear, actionable insights that drive the business forward,” stated Donald Lay, Senior Business Intelligence Manager.
Without our visual analytics solution, we would be stuck analysing enormous amounts of data in spreadsheets. Instead, our dashboards provide clear, actionable insights that drive the business forward.
6 steps to effectively make data-driven decisions
These steps can help you can find the “who, what, where, when, and why” to make the most of data – for you, for colleagues and for the business. But keep in mind that the cycle of visual analysis isn’t linear. One question often leads to another, which may mean you need to go back to one of these steps or skip to another – eventually leading to valuable insights.
Step 1 – Identify business objectives: This step will require an understanding of your organisation’s executive and downstream goals. This could be as specific as increasing sales numbers and website traffic or as ambiguous as increasing brand awareness. This will help you later in the process to choose key performance indicators (KPIs) and metrics that influence decisions made from data – and these will help you determine which data to analyse and what questions to ask so your analysis supports key business objectives. For instance, if a marketing campaign focuses on driving website traffic, a KPI could be tied to the amount of contact submissions captured so sales can follow up with leads.
Step 2 – Survey business teams for key sources of data: To ensure success, it is crucial to get inputs from people across the organisation to understand short- and long-term goals. These inputs help inform the questions that people ask in their analysis and how you prioritise certified data sources.
Valuable inputs from across the organisation will help to guide your analytics deployment and future state – including the roles, responsibilities, architecture and processes, as well as the measures of success needed to understand progress.
Step 3 – Collect and prepare the data you need: Accessing high-quality, trusted data can be a big hurdle if your business information sits in many disconnected sources. Once you have an idea of the breadth of data sources across your organisation, you can start data preparation.
Start by preparing data sources with high impact and low complexity. Prioritise data sources with the biggest audiences so you can make an immediate impact. Use these sources to start building a high-impact dashboard.
Marketing agency Tinuiti centralised more than 100 data sources with an analytics platform that supports faster data preparation to create custom dashboards for 500-plus clients and give them the full story of their brand efforts.
Step 4 – View and explore data: Visualising your data is crucial to DDDM. Representing your insights in a visually impactful way means you’ll have a better chance of influencing the decisions of senior leadership and other staff.
With many visual elements like charts, graphs and maps, data visualisation is an accessible way to see and understand trends, outliers and patterns in data. There are many popular visualisation types to effectively display information: a bar chart for comparison, a map for spatial data, a line chart for temporal data, a scatter plot to compare two measures and more.
Step 5 – Develop insights: Critical thinking with data means finding insights and communicating them in a useful, engaging way. Visual analytics is an intuitive approach to asking and answering questions of your data. Discover opportunities or risks that impact success or problem-solving.
JPMorgan Chase embraced a modern analytics solution to make decisions that are important to the bank’s health. JPMC gains a comprehensive view of the customer’s journey by reviewing line-of-business relationships (i.e. products, marketing and service touch points) with customer data. For example, the Marketing Operations team performs analyses that influence design decisions for the website, promotional materials and products like the Chase mobile application.
Step 6 – Act on and share your insights: Once you discover an insight, you need to take action or share it with others for collaboration. One way to do this is by sharing dashboards. Highlighting key insights by using informative text and interactive visualisations can impact your audience’s decisions and help them take more informed actions in their daily work.
With an analytics platform such as Tableau, you can create and share dashboards in a secure, governed environment where others can search, view and reference data in their workflows. To ensure that you are serving the needs of your organisation, you should regularly evaluate governance models and data sources so people can find the data they need.
Data-driven decision-making is transformational. When visual analytics is embraced by everyone in an organisation, data becomes a critical enterprise asset. With a modern business intelligence solution, data-driven decision making becomes a company mission, more than a hassle. This leads to faster, more informed decisions. And these decisions will generate a stronger bottom line, greater creativity and commercial success, and more engagement and collaboration from employees.