“Data is a tool for enhancing intuition” – Hilary Mason.
Data is becoming an integral part of everyone’s lives. It can be used in various ways, and we mainly consider data-driven decisions to understand the world and solve problems. Data is the lifeblood of any business, but all too often, companies get caught making decisions with no data to support it, or worse yet, making decisions based on the wrong data.
There are two ways to make decisions, data-driven decisions and gut-based decisions. Being data-driven is better than going with gut feelings. With findings based on gut feeling, there comes a lot of uncertainty. On the other hand, when you choose to go with data-driven decisions, you minimize the risk and the chances of having favorable outcomes increase.
In order to make more informed decisions, product managers can leverage technology solutions to get a better understanding of the data involved. This way, not only can they see what has been done in the past but also what is currently being done and what is likely to be done in the future. With this knowledge, product managers can make more accurate decisions about what direction their product should go.
What Exactly is the DDDM Process?
DDDM is a process that relies on data to make decisions rather than observations or hunches. This method is being increasingly used in various industries as technology advances. To make sure that data supports a company’s decisions, people involved in the process should consider multiple sources before coming to a conclusion.
What DDDM does is works by gathering information and KPIs (Key Performance Indicators) or quantifiable objectives and facts. Based on these findings, it implements strategies and actions that would benefit the company in different ways.
What Exactly Should Businesses Do to Make Data-Driven Decisions?
In order to make data-driven decisions, companies are required to perform the following tasks.
– Be sure to track the financial sales and keep a close on the KPIs.
– Next, keep monitoring the performance of different products and figure out what’s working best for your business.
Why Should Every Business Rely on Data-Driven Decisions?
In the digital world, businesses have access to an unprecedented amount of data. All of the tools which we usually use in our day-to-day lives collect enormous amounts of data and business intel, which can provide business owners with a plethora of valuable insights. This includes the marketplace and the competition, customers’ behavior, business performance, and so on.
When you rely on the data rather than hunches, assumptions, and instincts, you can tremendously take any business’ revenue and growth to another level of success. Therefore, in order to ensure that your business is going in the right direction, it is of the utmost importance that you rely on data-driven decisions.
However, it’s important to note that this data is only as good as its interpretation of it. In order to make accurate decisions based on the data at hand, businesses need to invest in data analytics tools and staff members who are trained to understand and interpret this data correctly. Without this crucial step, enterprises run the risk of making decisions based on inaccurate information, which could lead to lost revenue and growth opportunities.
Now that you are well-versed with exactly what DDDM is and why businesses should opt for the same, let’s delve deeper into some of the advantages it offers.
Advantages of Data-Driven Decisions
1. Better Transparency & Accountability
When companies make decisions based on data, it improves transparency and helps to ensure that all data is considered without bias. This, in turn, helps to improve overall results. Along with the DDDM, having clear and concise goals also go hand-in-hand with improving the decision-making process and ensuring that everyone is working towards the same objectives.
A company-wide approach that focuses on data helps employees to understand the importance of data backups and makes it easier for them to incorporate data-driven decision-making into their regular work activities. This turns out to be a great help for the organization to cope with all the associated risks efficiently as well as enhance its overall performance.
2. Speedy & Safe Decision-Making Process
Data-based decision management is a powerful tool for any entrepreneur. By mining data and extracting predictive and prescriptive insights, entrepreneurs can solve multiple business problems. Precise analytical insights help business leaders make better decisions, improve operations, and drive growth.
On top of that, by relying on the data to make decisions, organizations save a significant amount of time. The decision-making process can be time-consuming and complex, but by analyzing real-time data and past data patterns, businesses can make faster, more reliable decisions that, too, with much-needed confidence.
3. Crystal-Clear Feedback for Market Research
The data-driven decision-making can be way too beneficial to organizations when it comes to rolling out new products, services, workplace initiatives, and trends. By delving into the historical data, companies can easily predict what’s coming in the near future, which allows them to be prepared for the outcome.
Furthermore, business owners can also zero into all the feedback received by the clients and better understand how to build and maintain long-term relationships with them. Not only that, but it allows companies to introduce different products and services for their clients to scale their business.
4. Improvement & Innovation at Continued Pace
One of the best things about data-based decision management is that it creates an environment that is open to continuous improvement and innovation. By analyzing the data, organizations can implement changes incrementally, keep a close eye on the metrics, and make changes accordingly.
And the list of these advantages goes on. There are plenty of these, which can take too long to be discussed here. All in all, considering every bit of data while making decisions can help decisions can result in exponential and optimum growth for your businesses.
Common Challenges of Data-Driven Decisions Making
Though data-driven decision-making has several advantages, there are a few challenges that come along with it. Let’s explore some of those challenges now so that we can be better prepared to overcome them.
When it comes to data collection, more data is not always better. In fact, collecting low-quality data or data that doesn’t help you understand a problem or obstacle can be absolutely obsolete to use. It’s much easier to process high-quality data, which will help you get answers faster. Thus, one of the most common challenges faced by companies in the process is collecting high-quality data.
Different Types of Data Formats
Data is a critical part of DDDM, but if it’s stored in JSON, CSV, or XML formats, you’ll probably need scripts to convert it into a single format. However, you don’t have to put in the strenuous efforts to convert them one by one. There are multiple tools out there that can help you with the same. You can use one of those data management tools that can collect and format all the data using one universal standard.
Ability to Interpret the data
Data gathering and interpretation are two different processes that require different skill sets. If you want to ensure the quality of your insights, it’s essential to educate your team members so that they can be well-versed with both of these procedures. Every employee is in some way engaged in the DDDM, which is why it’s important for them to know the every-gritty details of the data-driven culture.
How Can Businesses Leverage DDDM Technology?
The shift towards data-driven decision-making is being driven by the availability of real-time information from a wide range of sources, both structured as well as unstructured, which is then analyzed by data scientists and business users for meaningful insights. To support this shift, a wide range of technology solutions, including advanced analytics, big data, business intelligence, and the Internet of Things (IoT), are being leveraged.
The data-driven decision-making process is an ongoing one. It is not simply about collecting data and then waiting for a magical moment to “act on it.” Rather, it is about understanding the data, analyzing it, and then using that information to make a decision about how to proceed. And with technology solutions available, this process can be streamlined in a way that makes it much more efficient.
We hope the blog helped you out. In case you have not considered making data-driven decisions yet, you should undoubtedly go for it. In case you have no clue about how to get started with the same, look no further than us.
At Saffron Tech, we can be your strategic IT consulting partner to help empower your business by transforming it digitally from the inside out. We deliver IT strategies that have been proven to work and which can be customized to fit the specific needs of your business. From data-driven decision-making to help you overcome any stumbling blocks that come your way, we have got your back. Get in touch today!