How can you make data-driven decisions?
Here are the four steps that can help businesses make data-driven decisions.
1) Define objectives
The first step towards data-driven decision making is knowing what you want to achieve with the data. Do you want to improve customer satisfaction and retain existing customers? Or do you want to reduce operational costs? Having answers to such questions can help you focus your attention on data that really matter to your organization and weed out all the irrelevant data. Having clear business objectives will help inform the kind of strategy you’ll build around those objectives.
2) Gather relevant data
Collect relevant data from both external and internal sources, so you can have a broader perspective of what is going on in your business. Unlike in the past, when businesses would struggle to acquire relevant data, improved technology has made it easier to cut through the irrelevant data and identify the right data sources. When collecting data for purposes of decision making, be sure to check and verify data sources and rely on different sources instead of one source.
3. Analyze and understand the data
Once you’ve collected the data, you’ll need to analyze it and derive useful insights that will inform strategic decision making. For purposes of effective data analysis, you’ll have to make use of integrated systems and leverage data analysts of different skill levels. The analysis of simple data requires no more than a working knowledge of excel, while complex data must be handled by specialized analysts.
4. Use technology to visualize
There are multiple data visualization tools that can help businesses turn insights into action. Platforms such as Tableau provide tools that allow businesses to present data in a way that is more relatable and digestible for decision-makers. Effective data visualization helps decision-makers to see what actions need to be taken and how they can improve business performance.