Data is the very backbone of the online world. It informs everything we do, and in turn, everything we do creates more data. This is a continuous cycle. Worldwide, 2.5 quintillion bytes of data are created daily (including but not limited to online), and at the time of writing more than five billion gigabytes of that data was on the Internet.
But why is data important for modern businesses?
Data is the fuel source for the modern business. It provides all the information an organization could possibly need to make better decisions. This is where data-driven decision-making comes into play. Data-driven decision-making, or DDDM for short, is the process whereby, instead of making decisions based on observations, intuition, or assumptions, businesses use data and facts to inform the decision-making process.
Businesses often practice DDDM, and use the facts, metrics, and data that have been gathered to guide strategic business decisions that align with your organization’s overall goals, objectives, and initiatives. This data can be anything from product information and customer feedback to sales figures and stock numbers. When collected and analyzed together, this information is a goldmine.
The thing about DDDM is that it enables businesses of any size and across any industry to view and measure the effectiveness of any given strategy and make well-informed decisions based on what they find. This means that teams in every department, such as sales, operations, and logistics can put a strategy in place and accurately measure its effectiveness. If an organization wants to improve business processes, increase sales or reduce costs, data provides evidential proof that the organization needs to inform their next steps. For example, if a new strategy is put in place to increase sales, the business can easily see if that strategy is on track, if it is indeed helping to increase sales, or if it’s not on track, where the areas of improvements lie. This is all made possible with the power of data.
Aside from enabling enhanced strategies, data-driven decision-making has many benefits associated with facilitating business growth. It provides organizations with the capabilities required to generate real-time insights and predictions such as gathering seasonal customer feedback on a particular product or service. This information can then be leveraged to enhance the product for the next season. This not only optimizes business performance but also ensures you stand out from the competition.
Effective DDDM also results in greater visibility of data, as teams share information between departments, it becomes more valuable and can fuel more and more business decisions. Alongside, improved visibility results in greater overall alignment of overarching business objectives – the more eyes that see data, the more it’s understood and ultimately, the more people buy into it.
This article will look in depth at why data-driven decisions are the key to unlocking business growth. It will specifically focus on the role of data, how to gather and analyze that data, and the benefits of implementing DDDM.