Powering success through data-driven business decisions

Accelerating sustainable growth and managing the digital transformation are at the top of the agenda for most of our customers. The ability to make informed and fast data-driven business decisions is key to achieving these goals and securing the future of companies. Digitalization enables access to vast amounts of data and the linking and analysis of extremely complex data sets through the latest technologies and interfaces, including developments such as AI. These developments enable ever more comprehensive data insights that leave little room for misjudgment and allow for fast and informed business decisions without subjective influences as well as precise measurable results in real time.

Let’s talk about how to enable smart decisions based on data more specifically:

The benefits

Business decisions based on sound, data-driven insights have a major impact on the business performance. Not only can they drive growth, improve operational efficiency, optimize capital allocation, and maximize profits, but they also enable you to identify trends, develop new offerings, streamline processes, identify growth potential, and make accurate forecasts. In doing so, data-based business strategies positively impact various business aspects from customer relations and people management to sales, recruitment, and financial results. The following points illustrate the transformative power of data-driven decision-making:

• Improved business efficiency and productivity: Making processes, workflows and cooperations transparent is a valid basis for permanent optimization. Fast and effective decision-making also influences the productivity of your business, as it enables the necessary flexibility and agility for quick adjustments to constantly changing market requirements.
• Impactful customer and people experiences: Up-to-date data, behavioral patterns and satisfaction scores are invaluable when it comes to understanding what customers and people are looking for. This information enables you to understand their current and future needs, develop better profiles, meet expectations, nurture strong and personal relationships, and develop improved strategies along the entire customer and employee journey.
• Higher competitiveness: With sound insights you can move from reactive to proactive by making informed forecasts and identifying trends and potential across the whole business and along the entire value chain. Quick access to insights, enables you to take data-driven action, react fast, develop efficient business models, and gain a competitive edge.
• Measurable KPIs: Of course, KPIs such as revenue, efficiency or productivity are positively influenced by data-driven business decisions – but they are only comprehensible and a valid basis for the further development of your business strategy if they can be quantified. By defining quantitative targets and being able to measure them with the right technology and data analysis, you can reliably track target achievement in real time.

The challenges

The advantages of making business decisions based on data are obvious. However, the path to sound decisions also poses some challenges. Especially in the area of data management, we encounter various complex topics that need to be considered in our customer projects.We would like to highlight some critical aspects to ensure a solid basis for effective decision-making:

• Managing the data quality: Data management means managing and ensuring high quality of data. Otherwise, the famous phrase “garbage in – garbage out” applies, and poor-quality data will negatively impact your business decisions. Organizations derive the greatest benefit from the highest data quality, which is defined by the following aspects: available, relevant, complete, accurate, consistent, and timely.

• No central access to data: The challenge of providing centralized data access arises from the proliferation of independent systems and architectures that contribute to the creation of fragmented and isolated landscapes. These isolated data assets hinder the efficient flow and accessibility of information, leading to redundancy, inefficiency, inconsistency, and various data management and quality issues. Centralized access to data is critical to overcome these barriers, consolidate data sources, and create a unified and integrated data ecosystem.

• Lack of structure: Without a clear data strategy, businesses face a web of confusion, hindering effective data management. Establishing structured processes, assigning clear roles and responsibilities, and implementing quality control measures are paramount. By addressing this challenge head-on, you can unlock the full potential of their data, ensuring accurate insights, streamlined operations, and informed decision-making for sustainable success.

• Extraction of information from large data sets: As data volumes continue to grow, extracting valuable information is becoming increasingly complex. By combining domain know-how, advanced analytics, powerful tools, and AI like large language models (e.g. ChatGPT), companies can overcome this challenge and gain actionable insights from massive data sets.

• Security and risk management: Protecting sensitive information is critical in an interconnected world with cyber threats. An important aspect of data management is ensuring data security and reducing the risks associated with data to a minimum. Data protection policies must be implemented, applied, and monitored throughout the entire lifecycle of the data – accompanied by robust security measures.

• Bringing data into action: Interpretation and the derivation of recommendations require domain know-how, certain skills, expertise, and tools to create a solid basis for data-driven business decisions to develop sustainable and future-proof business strategies. These types of experts and intuitive technologies are often not yet available.

The way to data-driven business decisions

The path to data-driven business decisions is an interative one that always follows a certain pattern:

• Define your targets aligned with the business objectives: Before collecting and analyzing data, you need to determine what business questions you want to answer and what goals you want to achieve. You can only make data management and analysis targeted and efficient if you know exactly what questions you need to answer to successfully pursue your strategy. In any case, you need to set clear goals to measure and track your key metrics over time.

• Find, aggregate and manage your data: The key to data-driven decisions is making data available, sharing it, eliminating data silos, and accelerating cross-functional use. The first step is to assemble the sources from which you will extract your data and create a unique set from different systems with one front end. That means successful data management also requires sound business decisions about technology! Just as important is the management of the data quality and creating a clean data layer is the starting point for a structured implementation. The definition of a profound data strategy and the documentation of relevant data quality rules, dimensions, KPIs and automated assessment reports can help you to achieve high data quality while saving resources.

• Analyze your data: Key findings and insights require deeper analysis, and you need to connect disparate data sets to transform them into business insights. This means to bring structure to complex data landscapes, establish data analytics policies and analyze data objects in collaboration with data analysts. Supporting AI technologies can save resources, help you to focus on truly relevant insights and ensure you don’t miss important trends and developments. This covers a wide range from translating and analyzing text, providing semantic evaluation, identifying outliers or key drivers, revealing hidden patterns or benchmarking results. However, these AI technologies should always be combined with human business acumen to drive data-driven business decisions as accurate and resource efficient as possible, but at the same time controllable, transparent, and adjustable.

• Visualize your data to get and evaluate insights: Professional data visualization is at the heart of data-driven business decisions. It helps you instantly capture key insights and present them to the management or other stakeholders as a compelling basis for decision-making. Intuitive dashboards tailored to your unique business problems and goals, as well as visual presentations, transform raw data into illuminating business insights with one click on a button. Through visually engaging presentations, you can effortlessly convey complex information, identify, and understand trends and patterns in data to gain a holistic understanding. Evaluating and interpreting the results in the context of your business goals and industry knowledge is critical for alignment and meaningful action. By comparing findings to business goals, you can prioritize actions that directly contribute to desired outcomes, ensuring efficient use of resources and targeted efforts. Evaluation is the foundation for informed, proactive decision-making and adjusting business goals and strategies over time.

• Bring data into action, learn, and improve: Insights are great, but the actions that follow are the critical part. Now is the time to make decisions based on data-driven insights, make them transparent to your colleagues, teams, stakeholders, or management and collaborate with them. Visualized insights should pave the way for constructive discussions and actionable blueprints for developing creative strategies and translating them into optimized business models, concepts, processes, or operations for your day-to-day business and to get your team on board. Iterative processes are key – the insights from the data, the changes in the data, and the results and lessons learned from previous data-driven business decisions are essential to incorporate into future decision-making processes.

• Foster a data-driven culture: And finally, it is important to foster a data-driven culture. Everyone who needs to make data-driven business decisions must have access to and know about the data: where it comes from and what metrics are being used. You also need to define and enable different roles with different expertise that can work together efficiently as a team to properly gather, analyze, and draw the right conclusions from data. It is also paramount to implement a data-driven mindset – every decision-maker and employee must be aware of the benefits of their decisions, their work process, and the impact on the entire organization. To develop and implement new or optimized strategies and to get your teams on board, the introduction of interactive workshops and effective change management is crucial.

We have been successfully supporting our customers in implementing data-driven business decisions for years and therefore see how important this topic is in today’s digital world. The obvious benefits and current market trends leave no room for hesitation. Sound and fast decisions are no longer an option, but a necessity for businesses to succeed and stay competitive in the global digital world. Our experience and expertise demonstrate the current relevance of this step-by-step approach, which enables businesses to unlock covered potential, drive innovation and stay ahead of the competition. By fostering data-driven decision-making, businesses can future-proof their operations, master uncertainties, and seize opportunities with confidence, helping them achieve sustainable success!

Sources:

• Henderson, D. (2017); DAMA-DMBOK, Data Management Body of Knowledge (2nd Edition); Technics Publications, Basking Ridge USA

Note: This article was created in part with the support of AI.