Digital technologies have transformed the way customers interact with businesses across every sector, generating huge volumes of data for organisations that they’ve not had access to before.
And yet, a recent survey of global data and analytics leaders found that more decisions are still being made based on gut feel rather than data and information.
Long-term success requires effective data collection and utilisation. Leverage the information your business acquires in the right way and you’ll transform your business.
Here are 6 key benefits of becoming a data-driven organisation:
Using key data within all major decision-making processes ensures a business achieves consistent results. Important individuals can leave and market trends can shift but, if you’re a data-driven organisation, this won’t impact the way key decisions are taken.
This is because the decision-making process is established and airtight. It doesn’t matter who’s in charge of this process because they’re using the same data and following the same process as their predecessors.
2. Agile and Quick to Adapt
Having the ability to predict changing market trends and respond accordingly gives a business the edge over its competition. If you can be the first organisation to explore a new market or supply an in-demand product, then you’ll establish yourself as an industry leader. When data is effectively utilised, it’s easier to understand what’s coming and quickly respond. Business decisions aren’t made in the dark or based on insufficient information. As soon as data is acquired and analysed, decisions can be made. Truly agile organisations are more than twice as likely to achieve a top quartile financial performance than the average business.
3. Improve Transparency and Awareness Throughout the Business
Information is an incredibly valuable commodity in the data-driven organisation. Whether its understanding how customers behave and feel about the business, or providing real-time access to sales figures and forecasts, the relevant information is available throughout the business and every department utilises it.
Collaboration of this kind ensures everyone is pulling in the same direction. It encourages loyalty and responsibility as every member of the team knows exactly what’s happening and what their role is. There are fewer mistakes as miscommunication is less likely to occur. Plus, employees are more likely to suggest improvements and positive changes because they have a full understanding of the business’ current position and long-term goals.
4. Data as Market Research
Data-driven organisations collect huge volumes of data over time. Much of this data is effectively feedback that provides insight into what customers like and what they don’t. This feedback is useful for quick wins but can also be the basis for long-term improvements.
With so much data, it’s easier to spot patterns as they emerge and identify gaps in the products or services you offer. Design new products or transform existing offerings based on the data you’ve collated and drive growth as a result.
5. Cut Costs and Generate Revenue
Becoming a data-driven organisation won’t in itself cut costs. However, you can use the data you collate to identify possible cost-cutting measures in all areas of the business. It might be that too much budget is allocated to a particularly ineffective marketing strategy. Or, the data might reveal that a specific product is returned more than any other. With this information, you can assess the product, identify and address the issues that customers have with it and reduce unnecessary administration and shipping costs.
The more effectively data is used in decision making, the more agile your organisation becomes. This agility allows data-driven organisations to outsmart their competition and boost revenue. The most forward-thinking companies will use this revenue to fund innovations and target new markets, in turn unlocking new revenue streams and further driving growth.
6. Quick and Confident Decision-Making
Indecision is the enemy of progress. While you’re deliberating and deciding, your competition has already taken steps to get ahead. Without effective data to support your decisions, projects can move slowly – especially if there’s a disagreement or counter point of view.
Data-driven organisations can move much quicker and with greater confidence in their decisions. They have the cold, hard evidence to support their ideas so there’s less of a need for a lengthy debate.
The ‘gut instinct’ aspect of business decision-making isn’t lost. It just means someone can now look at the data and take decisions based on both the information in front of them and their own experience.