There are many studies which show the benefits which businesses and workplace can encounter when they are integrating the use of data within their decision making. This includes day to day operation to critical decisions that may have an impact on the whole organization.
However, there are industries already involved using various amounts of data to execute technical operations such as the oil and gas industry. Besides their technicality in these situations, why should managers and supervisors care about weaving data into integral decisions?
Studies show that around 40% of top-performing companies base their businesses decisions on “gut feelings” or experience. Leading companies in the industry tend to make more data-driven decisions than businesses that rely on instincts.
Research from McKinsey purported that firms that uses consumer behavior insights had experienced an 85% increment in sales growth margin and 25% in gross margin related to their competitors.
Benefits of Data-Driven Decision Making
Today businesses are becoming more customer-orientated with a focus on bringing value towards their consumers. In such a competitive environment, companies use big data and a wealth of consumer insights to innovate their products and buyer experience constantly. By noticing demands and trends in these insights, businesses can see gaps in market trends and create solutions and software that can fill these gaps in various industries – providing them a first-mover advantage. Such allowing companies to take advantage of new or overlooked opportunities, providing a better way of organizational growth and regular market responses.
In decision making, analytics could also provide detailed insights and crucial performance metrics. Analytics tells decision-makers the markers for a successful business and provide areas of improvement in areas such as processes and product innovation, and personnel design.
Factors of Implementing Data-Driven Decision Making
Some factors can affect the way data-driven decision making is adopted such as:-
1. size of firm
The size and the number of employees can dictate how the business quickly absorbs this practice. A smaller company with fewer employees is more versatile and has a faster absorption rate compared to larger firms. It is also more expensive to implement new technologies, offer training, and make structural changes within a larger firm.
2. levels of complementary aspects such as information technology and education levels of employees, and
Depending on how IT is used and what is already available, additional IT capabilities may be needed to develop this effectively within your organization. Training is required for employees – depending on the level of education, thus increasing their overall skillset. These additions are also costly and needed continuously, as data innovation techniques will be difficult to interpret and can be rather time-consuming.
Besides training, additional awareness may also need to be communicated. Once awareness and need for change is communicated, this would readily encourage the use of technology and data within the workplace
Considering these factors, implementing data-driven decision making into your organization will you can will put your business at an advantage. Data and analytics is an essential aspect in maintaining your firm’s competitive edge and keep afloat amongst digital evolution for the years to come.
View our infographic here