According to IDC, data is growing — from 45 zettabytes in 2019 to a projected 175 zettabytes by 2025, globally. Data-driven decision-making helps use data to make informed decisions and validate a course of action before committing to it. According to a Forrester report, data-driven companies are growing steadily at an average of more than 30% annually. The information we gather can help us see the bigger picture and make effective choices. Making informed decisions should be a priority at any organization to prioritise growth.
Organizations, analyze how data trends are disrupting the markets and adopting a data-driven culture to surpass their competitors and see results. According to a survey conducted by PwC, more than 1,000 senior executives believe that highly data-driven organizations are three times more likely to report significant improvements in decision-making compared to others.
Data-Driven Decision Making
Data-driven decision-making helps strategically leverage insights from data to identify new business opportunities, serve customers, drive sales, and improve operations and productivity. Organizations use evidence-based data to strategically plan and make decisions to pursue business objectives. These decisions are based on empirical evidence, which enables leaders to make informed decisions to deliver positive business outcomes. Businesses should understand how relying on data insights helps make wise decisions.
Based on a MicroStrategy report from McKinsey’s Global Institute study, data-driven businesses are 20 times more likely to acquire new customers and six times more likely to retain them. Relying on knowledgeable data professionals and technology tools can help uncover the value of the data and provide insights. There are various reasons why using data to make decisions is a pursuit every modern business should internalise and prioritise.
1. Generating New Leads
In a competitive marketplace, data plays a vital role in identifying and leveraging data into revenue opportunities. Data-driven analytics can help identify customer patterns and behaviours to ensure your marketing efforts are focused. For example, by digging into the data, businesses can identify problems and develop robust strategies to improve performance and generate leads. 85% of marketers believe consumers expect a personalized experience and by identifying customer demographics it is easier to develop a buyer persona. A detailed buyer persona enables businesses to target specific types of people who will benefit from the niche.
2. Reducing Costs
When your data is properly organized, a business analytics system can identify patterns in all parts of your organization. Perhaps there are areas you might be over-investing in, or not buying enough essentials. With data analytics, these insights are highlighted. Reducing costs can help double profits. You need a solid analytics system to help transform that good data into models to inform future choices. A business intelligence cloud such as Power BI will consume all the data and offers visual models and answers. Business data can be sourced from application programming interfaces (API), cloud sources, websites, and even the humble spreadsheet.
3. Staying Competitive
Executives from various fortune companies state that 97% of their organizations are investing in big data and AI. Businesses of all sizes must apply a similar strategy to stay above their competitors who are not effectively utilizing data. Data analytics tools, help you track key performance indicators (KPIs) such as customer satisfaction, sales, and customer turnover.
4. Finding Patterns of Success
Businesses can evaluate financial elements such as revenue, growth, and profits. Understanding your company’s growth can increase investor, employee, and client engagement. Backing up your claims with data, makes potential buyers trust the business and be more inclined to trust them. Naturally, one of the insights of data analytics is of interest to companies in which product or service is selling best. But beyond that, analytics can also show you the product’s trends. For example, demand growth over time, which quarters had the most sales, and which demographic demanded a specific product.
5. Making Informed Decisions
Data-driven analytics enables decision-makers enough to make educated choices for driving business growth. For instance, Netflix uses big data to save $1 billion a year from customer retention. They achieved this by studying algorithms and predicting viewer behaviours using the data. This helped them in making better recommendations and create a personalized experience targeted to each viewer. Data-driven analytics helps organizations mitigate risks. It helps map processes and results, which can be replicated easily.
Data-driven analytics can help your organization understand growth trends, success patterns, and pitfalls. Business intelligence systems that can read data to show insights are an extremely valuable tool for any organization. Businesses targeting the right leads, reducing costs, and staying competitive are often backed by data-driven analytics. The information that can be gained from data can also light the way for your organization’s leaders to make the best decisions. With such a prolific tool, it’s no wonder why data-driven analytics is of interest to companies.