Making data-driven decisions to support your Operational Transformation

#OperationalTransformation in any form can revolutionise your business. From a simple process change to the implementation of whole new functions or customer offerings, you can drive down costs, wasted time and improve efficiency.

But when undergoing such changes, you need to make sure that the decisions you make are based in fact. This can take the form of having a full business process documented, creating a strategic change plan or the implementation of BI dashboards, but whatever form it does take, it should provide you with the right data.

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What is Data-Driven Decision Making (DDDM)?

Data-driven decision making is defined as the collection of data and metrics in order to make more informed decisions. ?

As humans, we’re prone to make decisions based on emotion, instinct (gutfeel anyone?) and conjecture. We can’t help it but it’s just our nature. But these types of decision-making strategies can lead to problems. Without being too extremist, the consequences of an incorrect decision could be disastrous for a business.

The Tratech DDDM model

Data-driven decision making itself is not a difficult concept. We all want to make the right decisions for our businesses and the more accurate an input we have the better and more confident we can be about those decisions. However, to support coming to the right decision we’ve put together a process that we recommend you going through. Again, this isn’t revolutionary information, and most are fairly common sense, but for some following a process that’s already laid out provides confidence to those to whom this is a new concept.

1.????Understand

The first step of the process is to fully understand what decision(s) you need to make. Examples could include “do we initiate a loyalty programme for customers?” to “should we start building a new product?” ?or even “how should we implement a new process?”.

Once you have the firm understanding of the decision or collective decisions you need to make then you can move confidently to the next stage. But you should not move forward until this is secure or you risk wasting time, money and effort.

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2.????Identify

The identify stage requires a bit of analysis and thought. In order to support your decisions, you need to identify the right data. The key word here is right.

Let’s revert to our loyalty programme example above. When trying to decide whether to initiate a loyalty programme, there are many elements that you could consider, including things like:

-??????Existing customer data

-??????Technology capabilities

-??????Market forces

-?????Competitor offering

-??????Financial capabilities of your business

Whilst these seem like high level considerations, the amount of data that you could collect is significant. The challenge for this step is to again get the right data to help you. It may also be prudent to be flexible with this stage. As you start identifying some data, it may lead you to identifying further data points available which maybe you hadn’t considered on the first pass.

3.????Collate

Once you’re happy with the list of data you need from step 2. then it’s time to work on bringing the data together. This could be in the form of process maps, spread sheets, transaction files, yearly sales figures, customer numbers – there’s no real limit to what you could bring together, but again, it needs to be in a format which can be digested and understood.

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4.????Interpret

This is where it gets more interesting. There are so many ways in which data can be interpreted it can make it challenging to see the wood for the trees. For many major decisions, the provision of a business or data analyst to support the understanding and summation of the data can be invaluable. Ironically and important to note, data can also have bias and coupled with our own unintentional biases, it could lead to the wrong decision (this is another topic on its own!)

Data analysts can perform pre-processing of data to remove the bias level and give you a higher confidence in the data that you are seeing.

Additionally, for more statistical and transactional data, BI visualisations are great in providing insights. They can provide KPI’s, trend analysis and easily digestible information on which to support you in your decision making. We’re seeing a huge surge in the use of BI dashboards with the introduction of products like Tableau, PowerBI and Domo which allow the user to manipulate the visualisations to answer their questions in real-time.

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5. Decide

The final step – make that decision or don’t! But if you do, do so based on the data that was presented in steps 2-4. If you need more data, loop back around and iterate on the process. But don’t be rushed into a decision if you don’t have all of the necessary data.

Get in touch

If you want more information on how Tratech Consulting can help you with your data-driven decision making, get in touch with us on our website.

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