Traditionally, most business decisions were based on experience and intuition, but nowadays that is just not enough. Today we live in a world of data and time has proven that companies that use and invest in data analytics to make decisions are more likely to enjoy significant benefits.
Despite this, people often still find themselves improvising and making decisions based on intuition; either because the report from the corresponding department has not arrived; and mostly because the information they have at that moment is incomplete or too complex.
So, what to do to improve the way we make decisions? It is not enough to have access to information, it is important to be able to curate data and transform it into a key strategic asset for your company's success and, ultimately, make better decisions.
What are the key steps to effectively making data-driven decisions?
Step 1. Identify your objective and define the KPIs
This step will require an understanding of your organization’s goals. Identifying key goals will help you choose key performance indicators (KPIs) and metrics that influence decisions made from data. Knowing your more relevant KPIs will help you determine which data to analyze and what questions to ask so your insights are valuable to meet key business objectives. For example, if the goal is to improve customer engagement rate, you may want to collect data on customer responses to different mailing campaigns. The KPI could be “Click-through rate” per campaign.
Step 2. Get your team involved
It is key to get the input of people across the organization to understand their short-term and long-term objectives and which data sources to prioritise. Valuable input from different stakeholders across the organization will help guide the data analytics deployment and decide roles, responsibilities, architecture, and processes, and how to measure success.
Step 3. Data collection: the origin of data
Where do we consume the information from? The data sources that we use for consultation must be reliable and must offer us quality, truthful and continuous data. Start by preparing data sources with high impact and low complexity. Prioritize data sources with the biggest audiences so you can make an immediate impact. Use these sources to start building high-impact dashboards that will be used by a large number of people.
The sources of data for decision-making can be sprawled across different platforms, teams, and spreadsheets. There are tools like Customer 360 that help organisations curate and consolidate data from multiple sources into a unique site.
Step 4. Analysis and interpretation of the data
Delivering an attractive presentation of your data is crucial. Representing your insights in a visually impactful way means you’ll have a better chance of influencing the decisions of senior managers and other team members. More and more companies invest in developing their insight dashboards to present their data in a way that any member of the team is able to interpret the information, have a transversal vision, and locate the most important milestones very quickly and visually.
Visual analytics is an intuitive approach to asking and answering questions about your data. Use critical thinking and search for data trends to discover opportunities or risks that can impact success or problem-solving.
Step 5. Decision making
The most difficult part of the data-driven decision-making process is to put the data into action. Ensuring that the right team member receives the right information at the time of maximum impact is key to making valuable decisions. Giving your team access to instant, accurate, and relevant data will give them autonomy to make important decisions and take more-informed actions in their everyday work.
Don't be afraid to contact an expert in data analysis and interpretation to assist you with extracting value out of your data. For organisations with large number of customers or contact customer interaction, look at solution like Next Best Action to help you optimise your resources and prevent churn.