Making Better Business Decisions Through Data Analytics

A century ago, company owners relied on their experience and intuition to organize supply chains, adjust production processes, and gain new customers. Today 65 percent of stakeholders agree that the complexity of business processes has grown dramatically, and important decisions must be substantiated and made within limited timeframes.

Clearly, companies cannot rely on unmeasurable decision factors anymore and require accurate intel to function correctly.

This is where data and business analytics come into play. These tools help stakeholders make more informed decisions about security, marketing, customer acquisition and retention, risk management, and process optimization. Seventy percent of companies that have implemented business analytics for specific industries as a part of their daily operations reported faster decision-making along with better financial performance and lower risks.

The problem is that despite the benefits, many businesses are still struggling to achieve data-driven decision-making (DDDM) and worry about ethical considerations in business analytics. Let us see what it takes to implement it in your organization.

What is DDDM?

Data-driven decision-making (DDDM) implies that you use metrics, numbers, statistics, and other hard data related to your operations to make decisions. Analyzing this information for patterns gives you valuable insights into what you should do next, what is likely to happen, and why processes occur one way or another.

Big data analytics and DDDM allow an organization to refine its strategies and improve performance and are widely used by industry leaders. Here are some examples:

• Lufthansa reported a 30 percent increase in operational efficiency due to business data analytics
• Google uses Project Oxygen to distinguish the traits of high performers and then develops training programs for employees based on the acquired information.
• Amazon analyzes the behaviors of its customers to power its recommendation engine.

But if DDDM is so good for business, why don’t enterprises implement it across the board?

Despite billions of dollars being invested in implementing data analytics for business, 70 percent of such initiatives fail. Here are some common obstacles many companies face:

Understanding how to integrate your business analytics and data strategies into your decision-making processes is essential to avoid these problems. Let’s look at some of the data analytics best practices.

How to implement data analytics for business

DDDM requires not only a complete rethink of working with information but also significant organizational transformations. We would suggest you approach this initiative from two angles:

1. 1. Preparing your data for insight extraction
2. 2. Promoting data-driven culture within your enterprise

This isn’t a full list of measures, but it does give you a starting point. The main goal is to master data storytelling with business analytics.

Organizing your data

Identify and prioritize your business goals

Companies tend to use only 45 percent of the business data analytics they produce, and the rest is ignored. This is ineffective. To make accurate decisions any information will simply not do; it has to be relevant.

When formulating your business objectives, ask yourself what you want to achieve and why. Goals set in a specific and quantitative manner let you select suitable indicators to measure your progress. In turn, these metrics will help you determine what data is essential for analysis regarding your goals.

In brief, instead of gathering all the data you can, we recommend you follow the formula: based on X, collect Y to answer Z.

Democratize your data

Data-driven decisions should be enabled across the whole organization, not just at the senior management level. Today, considering the ubiquitous volumes of information - 74 trillion gigabytes of data have been created in 2021 alone — it is crucial to streamline the delivery of relevant data ready for analysis to decision-makers. This is called data democratization, and to facilitate it, you need to design new data supply chains, reducing the possibility of trapped data, silos, and bottlenecks. Applying cloud-based business analytics solutions might be the first thing to consider on your way toward data democratization.

Clean the data you’re working with

First, you need to identify the relevant data that you already have. Next, you do a cleanup.

It is also important to reduce data biases during this step. A bias implies that certain dataset elements are represented more heavily than others, which results in inaccurate analysis and poorly informed decisions. A typical example is the so-called filter bubble, when personalized content algorithms only supply users with information that conforms to their beliefs and resembles the previously consumed insights. In this challenge, integrating properly trained AI and machine learning for business analytics processing should help you succeed.

Analyze data and make conclusions

There are many ways to develop insights from the acquired information. You can start by answering the question, “What has happened?” (Descriptive analysis) and move to scrutinize why it has happened (Diagnostic analysis) and what is going to happen next (Predictive analysis). Other methods include text analysis, data mining, image analytics, data visualization, and more. Additionally, robust data visualization tools and business intelligence (BI) platforms can enhance analytic capabilities.

Promoting data-driven culture

Extracting valuable insights from business data analytics does not guarantee success in implementing DDDM. Your biggest challenge may be resistance to change.

Surprisingly, companies do not embrace every beneficial change automatically. Reluctant corporate culture manifests itself on different management levels, and you might need additional effort to overcome it. Here are some ways to do it.

Organize support for your DDDM initiative

Change is often implemented from top to bottom, and the C-suite is your friend when transforming corporate culture to make it data-driven. Create a simple but illustrative POC to demonstrate the positive impacts that a data-based approach will have on internal operations. Ideally, senior management should not just declare support but actually practice data-driven decision-making. Organizing a center of excellence to guide the DDDM initiative could also be a good idea.

Encourage and develop communication between leadership and data scientists

A common problem for many companies is the gap between senior management and data scientists. When there is no communication between them, two things happen:

• Business data analytics is detached from real business needs
• Leadership fails to extract the actual value from the acquired information

Communication allows you to merge the strategic view coming from management with the technical perspective of your data analysts. As a result, analytics becomes more aligned with company business goals, and leadership gains access to valuable insights.

Offer training

When a data scientist looks at graphs and dashboards, they see patterns in business processes, nuances of operations, bottlenecks, and whatnot. When unpracticed managers look at the same graphs, they see numbers and colorful lines. Offering basic education for gaining business analyst skills and training is crucial for building a culture where each worker can make data-driven decisions.

Conclusion

Data is the “new oil,” and putting it to good use can give you a significant advantage. However, changing the way your business works and setting it on the DDDM track can take a long time, and the need for accurate insights is often pressing. If this sounds like you, we have a relevant solution for you. Keep implementing DDDM at your enterprise while TEAM International collects, structures, and analyzes data to help you maintain a competitive edge. Feel free to contact us today for a free consultation.

P.S. Looking for business analytics career opportunities? Check out the TEAM International Career Portal to find your dream job!