Most organizations today aspire to become data-driven companies. But what exactly does it mean to be data-driven, and how do you get there?
To be data-driven means cultivating a mindset throughout the fabric of the business to continually use analytics to make fact-based business decisions. The goal is to reach a stage where the use of data and analytics by executives and employees becomes a natural part of their day-to-day workflows. Line-of-business and functional leaders in sales, marketing, finance, and operations must leverage all relevant data assets in order to make sound decisions quickly and lead their organizations to business and operational success.
As executives look to maximize the use of data and analytics, top-performing companies are able to differentiate themselves in the market through their ability to use the right data at the right time for conclusive decision-making. One of the things that set data-driven companies apart from their peers is their determination to gather relevant data from all aspects of their business, which allows them to dive deeper to understand the root causes behind specific business conditions, such as changes in customer behavior or market trends etc.
Ultimately, an enterprise-wide approach to data gathering and analysis is more valuable for the organization. Data that’s mined in disparate silos undermines the quality of decisions across the company, increases risk, reduces the security of corporate data, reduces efficiency, and drives IT costs up.
In order for an organization to become data-driven, several steps are required. For starters, it’s critical to define which success metrics will be measured and map those metrics to data sets that will contribute to those measurements. While it may seem like a daunting initiative, this exercise prepares companies to align tactical execution at the department level with corporate strategy and to measure performance against defined goals and objectives.
Next, the use of data and analytics in everyday workflows must be embraced by the entire organization. Without this top-down, bottom-up commitment, adoption and execution against goals will suffer. Internal champions, such as line-of-business or functional leaders, can help drive adoption by quantifying and then freely sharing the financial, productivity, or operational benefits they experienced. This cross-functional pollination of data-led best practices enables all parts of the organization to strengthen their use of data and analytics and drive higher levels of business performance. As companies use of analytics matures, adoption will spread and collaboration between teams and departments will continually improve.
Data-driven leaders are also more likely to deploy analytics pilot programs than other companies, according to a study conducted by Carnegie-Mellon University and A.T. Kearney. Not only do pilot programs provide users with first-hand experience with using analytics, they can also create a solid business case for the potential value of a comprehensive analytics program when implemented correctly. Plus, pilot programs enable analytics agents to develop repeatable processes that strengthen organizational decision-making and business performance.
As a company becomes increasingly more data-driven, executives, managers, and employees alike will find themselves thinking and acting differently, asking more probing questions about the top business or operational challenges they’re trying to tackle. Who are our most profitable customers? Which customers offer us the greatest untapped value? Are our sales strategies generating the improvement we expected?
- To learn more about the factors that are driving self-service data discovery requirements, check out the Blue Hill Research study, “Anatomy of a Decision”.
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