One of the most powerful ways you can put data to work is with data-driven decision-making.
Data-driven decision-making is driving business growth through business strategies based on facts. Organizations in many different industries are empowered to make better, data-driven decisions by data analysts all the time.
The first step in data-driven decision-making is figuring out the business need. Usually, this is a problem that needs to be solved.
- For example, a problem could be a new brand needing to establish better brand recognition, so it can compete with bigger, more well-known competitors.
- Or maybe an organization wants to improve a service and needs to figure out what frameworks or libraries provide the most flexibility for easy updates or bug fixes.
- Or, it could be a business trying to solve the problem of unhappy employees, low levels of engagement, satisfaction and retention.
Next, once the problem is defined, a data analyst
- finds data
- analyzes it and
- uses it to uncover trends, patterns and relationships.
Finally is how the result of the strategy is implemented:
- Sometimes, the data-driven strategy will build on what’s worked in the past.
- At other times, it can guide a business to branch out in a whole new direction.
Often, using data-driven decision-making requires gathering information about what is currently the norm for most of their target customers, analyze it, then use the insights they’ve gained to make suggestions for things people will most likely enjoy in the future. Hence improving on the process or service. This keeps customers happy and coming back for more, which in turn means more revenue for the company.
However, in some cases it might mean creating entirely new business models.
In fact, data-driven decision-making can be so powerful, it can make entire business methods obsolete, phasing out the old processes or models completely. We see this for instance, in the complete move away from corded phones to mobile phones.
Thus data analysts play a critical role in their companies’ success by incorporating data into every one of the organization's business strategy.
However, data alone will never be as powerful as data combined with human intuition, experience and observation.
To get the most out of data-driven decision-making, it’s important to include insights from people who are familiar with the business problem.
These people are called subject matter experts, and they have the ability to
- look at the results of data analysis and
- identify any inconsistencies,
- make sense of gray areas, and
- eventually validate choices being made.
Organizations that work this way put data at the heart of every business strategy, but also benefit from the insights of their people.
