Data today forms the primary building block for decision making within an enterprise. It defines and supports the most crucial decisions, including informing the marketing strategies and identifying and establishing the current competitive advantages. As of 2012, about 2.5 exabytes of data were being created each day, and that number has been doubling every 40 months or so. The important aspect that data provides is the element of unbiased decision making– something that most organization strive to achieve. Most organizations today are still struggling to make sense (in time) of the data flow within their organizations and in identifying and selecting the right data set in order to put it to use to devise the most optimal/ effective long-term strategies .
But what is it to be data-driven, and how should an organization seek to achieve this?
One of the things that set top performing companies apart is their determination to collect relevant data from all aspects of their business and use it effectively. This helps them get in-depth knowledge of the root causes behind specific situations that their business is facing , including changes in customer behavior or market trends, and influences their ability to use the right data at the right time for conclusive decision-making. A popular example of a conclusive data driven decision is that of Netflix to produce their own show, the US version of the popular British sitcom, ‘House of Cards’, directed by David Fincher, starring Kevin Spacey. Using insights from the large amount of user data, Netflix knew that a healthy share of its users admire the works of David Fincher, the director of the movie ‘The Social Network’, a movie which was streamed from beginning to end by most of them. And the movies starring Kevin Spacey had always done well, just like the British version of ‘House of Cards’. With all this data in their hand, they knew that the show will be a hit, even before they produced it. [source]
Simply put, to be data-driven is to use analytics to sift through available data sets and understand their inter linkages to arrive at real-time, fact-based business decisions.
IT organizations face unique challenges today, wanting to fulfill the following needs:
- Remain competitive in their markets and leverage advances in technology to help them stay relevant.
- Be more agile and responsive to changing business needs.
- Deliver optimal services with high-quality for all their target segments.
- Build tools / products to analyze available data to deliver the right insights to the right teams at the right time to inform their decision making.
Embracing data-driven decision-making can help overcome these challenges.
Tackle Business Problems easily
In one of McKinsey & Company’s blog posts by Dominic Barton and David Court, the CEO and the Director of the company respectively, have said, “Often, companies already have the data they need to tackle business problems, but managers simply don’t know how they can use this information to make key decisions.
The recent growth of digital data is so significant, that it lets enterprises measure, and understand deeply about their businesses, and use that knowledge to arrive at improved decision-making and performance.
Big Data in the Manufacturing Industry
The manufacturing sector has also benefited using real-time data and analytics which enables manufacturers to make better decisions faster. A recent survey of 418 senior executives by McKinsey & Company showed a strong correlation between companies that make extensive use of customer data analytics and those that outperform their competition in terms of sales, sales growth, profit, and ROI.
Steady, ongoing growth of the manufacturing industry calls for balancing data-driven decision-making with focus on long-term, higher-order objectives.
Revolutionizing the Retail Chain
“2017 will be the year the big data floodgates open, driven by a voracious appetite for deeper contextual insights that drive customer engagement via mobile, wearables, and IoT.“ says Forrester, in their ‘2017 Predictions: Dynamics That Will Shape The Future In The Age Of The Customer.’
The use of big data can greatly revolutionize traditional retail businesses. Let us take for example a fashion retail store. Earlier, they were confined to tracking their inventory and identifying which clothes were sold and which weren’t, or looking at their regular customer base etc. With the recent online retailing options, the retailers are able to track not just purchases, but every interaction that happens like interest categories, favorites, wishlist, incomplete transactions, reviews etc.,All these help design a better algorithm, for more conversions. In some cases, the retailers take the process beyond the channel to complete the conversion. For example, lenskart.com immediately calls/ emails its customers who add products to their cart, but not complete the purchase. The executive tries to assist you in completing the purchase or understand why the purchase wasn’t completed.
The Next Step to a Digital Future
Big data is stimulating a fundamental transformation in the way business is done. Big data sets of this revolution is far more powerful than the analytics that were used in the past. Appropriately implemented and managed, big data analytics and data-driven decision-making helps enterprises manage performance more precisely than ever before. This results in better predictions and smarter decisions. It can also improve strategic decision-making and overall operational performance for organizations in the business.