Using Data to Make Strategic Business Decisions
Data should be at the heart of strategic decision making in business, regardless of the size of your organizations. However, one 2019 survey by Deloitte found that 63% of business executives believe their teams are not “insight-driven,” and 67% of executives reported that they were not confident in their abilities to use the data generated by their own teams. In the age of Big Data, this is really surprising.
Why we should be relying on data
Many people rely on ‘gut feelings’ when making a decision. The problem? Subjectivity and biases! On the other hand, data is…data. Data leads to insights and insights should be the basis of decision. Of course, how we collect and interpret the data may still be prone to subjectivity and bias, but starting with data to make decisions is a lot better than starting off with feelings.
2) More likely to achieve business goals
One survey found that companies with the strongest cultural orientation to data-driven insights and decision-making were twice as likely to have significantly exceeded business goals.
Among the 37% of companies in the survey with the strongest analytics cultures, 48% significantly exceeded their business goals in the past 12 months, making them twice as likely to do so compared to the 63% that do not have as strong an analytics culture. - Deloitte Insights
If your organization wants to use data to drive strategic and tactical decisions, we list some starting steps below.
Where to start
1) Identify what you want to achieve
Always start by working out what your business is looking to achieve. What do you need to know? Why do you need to know it? From there, identify the areas most important to achieving your overall strategy.
For companies that have a strategic plan, metrics should already be clearly outlined.
2) Get executive sponsorship
Management is the champion of analytics. When the CEO is comfortable accessing or using data to drive business decisions, companies are 77% more likely to have significantly exceeded their business goals.
3) Find, collect, and analyze the data
What data will help you answer your questions? What data do you already have? How will you collect the data you want? You need to have a clear understanding of what data you need to answer your questions. You also need to make a clear case for the investment that outlines the long-term value of data to the business strategy.
Once the data has been collected, you need to present the data in a meaningful way to the right people. This will help make sure the insights gained from the data can be used to inform business decisions.
4) Make data-driven decisions
Turn the data to action - apply the insights from the data to your decision making!
In the age of Big Data, we need to stop relying on our feelings. It's time all businesses should be using data to drive strategic and tactical decisions.