Imagine for a moment the sheer amount of data the average company collects and stores. After all, it’s possible to capture information on every aspect of performance under the sun.
Retail companies have rows and rows of data pertaining to customer buying behavior, product performance and inventory. Manufacturers can amass near real-time feedback from Internet of Things-connected sensors across factories and order fulfillment stations. Hospitals are constantly collecting data related to readmission rates, staffing levels, insurance claims and patient outcomes. Communications companies are storing data on customer churn, marketing campaigns and network performance.
This list could go on and on. However, gathering data and successfully using it are two very different accomplishments Let’s look at what it means to be data-driven as a company — and how to go about doing so.
Data-Driven Companies Gain a Competitive Edge
According to a Forrester report, so-called “insights-driven businesses” grow at an average of more than 30 percent annually. Cumulatively, these businesses are on pace to earn $1.8 trillion by 2021.
Forrester defines this emerging breed of company: as “Customer-obsessed firms [that] systematically harness insights across their organization and implement them to create competitive advantage through software.”
Researchers at the MIT Sloan School of Management found firms adopting data-driven decision making (DDD) experience output and productivity five to six percent higher when other factors have been taken into account. The study notes that DDD also “factors into other performance measures, such as “asset utilization, return on equity and market value.”
The takeaway? Research is showing data-driven companies tend to grow at a faster rate than your average company and experience higher rates of productivity — which can make all the difference between staying afloat and sinking like a stone in highly competitive sectors.
Becoming data-driven is a matter of having the right tools — the software to which Forrester alludes — and the right culture in place to fuel data-driven decision making.
Companies Need Self-Service Data Analytics
The ability for employees to extract insights using self-service data analytics software lays the foundation for becoming data driven. Self-service analytics tools have helped democratize data, putting it directly into the hands of the people on the ground making decisions every day. This represents a huge leap forward from siloed data models, in which the everyday employee would have to request reports from data gatekeepers.
Companies Need Access to Automatic Data Insights
Furthermore, platforms like ThoughtSpot use an advanced artificial intelligence engine to uncover insights employees and analysts haven’t yet had a chance to discover on their own — which helps teams stay ahead of the curve, armed with automatic data insights.
Companies Need Data-Driven Culture to Support Initiatives
But data insights are only as useful as they are actionable. All the hypothetical information in the world won’t necessarily translate into better business outcomes — at least, not unless company culture supports employees’ ability to make actual decisions based on the data insights they uncover. One major factor driving this aspect of company culture is leadership buy-in.
Here are some additional mainstays of a data-driven company culture, per Tech Crunch:
- Single source of truth: Employees across teams and departments have access to the same centralized, trustworthy informational source. This prevents miscommunications and disagreements about what the data is really saying.
- Data literacy: Employees understand key metrics pertaining to data and can access a glossary of terms as needed. Employees also need training and guidance to confidently interpret and communicate data findings to others.
- Access to data: Only self-service platforms afford the widespread data access employees need — from marketers to the C-suite and everyone in between.
- Decision-making: Insights are incorporated into regular decision-making processes.
Becoming data-driven as a company requires having the right software in place along with culture supporting insight-led decision-making.