With the explosive growth in the amount of data being mined, what are companies doing to ensure they can translate this avalanche of information into actionable business intelligence?Tweet This
Back in the 1980's when companies first started tracking the massive amounts of data they were creating or acquiring, the purpose was to find a way to improve business strategies and minimize risk. That goal hasn't changed today, but with access to more data than ever, it becomes imperative to use the business intelligence gathered from data to help you make business decisions and to gain a competitive edge—thus, the creation of data-driven decision making or DDDM.
What is DDDM?
DDDM is the process of making business decisions based on various data. Having data isn't enough to get started though. You need the right tools to work with the data and analyze massive amounts of data, both internal and external, to make valid conclusions to base decisions on.
This used to be the responsibility of a select few in the IT department who had access to the data and understood how to run complex queries. Today, however, user-friendly technology gives access to big data to anyone who can manage a simple dashboard.
What does it mean to support a decision with big data?
This is an important question asked by companies struggling with how to use the data they have. But this question leads to two other questions:
- Do you use data to guide you towards a decision before it is made?
- Does data reinforce the decision after it's been made?
The answer to these two questions will tell you whether you're, in effect, employing DDDM or using a process that can impede optimal decision making.
In a DDDM-based culture, it's apparent that using the data to guide you towards a decision is the proper course of action. But that strategy alone discredits the years of experience and the human intuition that frontline managers and staff have gained that's also important.
There's a third option - the human/AI synthesis
Using a combination of big data analytics and human intuition leads to better decisions. This assumption has been proven through extensive research by several illustrious universities, such as Harvard Business School.
Life experience, intuition, and business sense shouldn't be ignored. Intuitive, data-driven decision making will soon become the new norm and the decisive factor in those companies that gain a competitive advantage using everything available to make decisions.
It's all about the predictive analytics process
Big data warehouses aren't the only source for information any more. There are many sources, internal and external, that combined provide a more comprehensive picture to help you make better decisions. And part of that process of analyzing and crunching the data needs to include the human information from frontline staff who understand the products and the customers intimately.
Several enterprises today have truly insightful processes for DDDM that can serve as a guide for others who want to create their own DDDM culture, such as Google and Amazon, among others. If you'd like more information for creating a DDDM process, stay tuned for our article "Best practices for data-driven decision making", up next week on our Blog.
Make sure you have the skills set needed to use data
A certain skill set is needed to ensure you're using quality data from trustworthy sources in order to gain a competitive advantage. Also take into consideration that data doesn't necessarily grow better with age; there might be some instances where old data could be helpful, but for the most part, you need fresh data and you need it fast. And you need someone to help you use it appropriately.
Part of the skills set is ensuring you have the right tools needed to analyze all data and knowing when to call on professionals to help you manage and cultivate the power of data.
Your company's future operability and profitability depends on using the data available, along with human intuition, to make the most out of your business intelligence. When you use data together with human intuition, you create knowledge that will differentiate your company from the others, giving you the competitive advantage you need in today's fast-paced world.
The Evo Pricing difference.
Evo Pricing offers you an innovative competitive advantage through dynamic pricing strategies and by solving your promotions, churn, and markdowns challenges with our comprehensive data driven management platform.
Call us today to find out how our innovative solutions using big data and human intuition deliver tremendous results—proven by $200m+ margin already created.
About the author
Kathy Edens is a digital content creator who enjoys writing about cutting edge technology and how it can disrupt and innovate the way a business operates.