In our age of analytics, more and more companies claim to be data-driven. They’re proud of having largely abandoned experienced-based, gut-feel-based or boss-directed decision making.
The value of data-driven decision-making is that it improves the quality of business decisions while reducing the risk of poor, business-killing decisions caused by:
Since data-driven can be defined in many different ways, here are the widely-accepted indicators that will enable you to gauge how systematically your company operates using a data-driven culture.
Companies often struggle to develop a coherent business strategy. Some companies are distracted by the latest headline, executive turnover, competitor initiatives, internal turmoil or regulatory developments. For example, can Bombardier reasonably claim that its development of the C Series jet was a data-driven strategic decision in view of the existence of strong, direct competitors?
Data-driven companies develop strategy by integrating the data about business measures, technology, external trends, and threats into a single, unified approach. They use data and analytics to describe how the strategy will:
Companies cannot rely on previous successes to drive todays and future prosperity. Eventually, competitive advantages become commoditized and innovation, expressed as appealing products or services, will be necessary to sustain growth.
Innovation is a necessary trait of sustainable companies. Data-driven companies analyze a wide variety of data to:
Many companies make use of data and analytics quite unevenly. Some functions or divisions use it widely while others remain skeptical about the value.