Being “data-driven” means one thing: using data to inform your business decisions, both big and small. Employees in a data-driven organization always have access to the information they need in order to learn from historical performance and make the wisest decisions.
According to a study by management consulting firm McKinsey & Company, data-driven companies are:
- 23 times more likely to outperform competitors in acquiring new users
- 19 times more likely to achieve above-average profitability
- 15 times more likely to deliver better value to their customers
Being “data-driven” is all about knowing which information, in the form of metrics and key performance indicators (KPIs), is most useful for success. In the McKinsey survey, a full third of respondents said customer analytics was “extremely important” to their business, on par with price and product management.
Of course, being a “data-driven” organization is easier said than done. While you likely have more information than ever at your fingertips, turning that raw data into meaningful, actionable insights is no mean feat.
Studies bear out this perception that companies are struggling to keep their head above the wave of enterprise data. Roughly 60 percent of organizations now say they have more enterprise data than they know what to do with, and 83 percent aren’t able to fulfill their full hiring needs for experts in data and analytics.
The Benefits of Being Data-Driven
The highly positive outcomes of data-driven organizations seem to be fairly clear-cut, but what are the immediate benefits responsible for those outcomes? More than 80 percent of organizations using business intelligence software say they saw “good” or “moderate” improvement in the speed and accuracy of their reports and analyses.
Using a dedicated BI solution can help you make better use of your data in a variety of domains. Not only can you better serve customers by developing relevant products and delivering a personalized user experience, but you can also use BI software to make your internal processes more efficient and to mitigate fraud and organizational risk.
How Do Companies Become Data-Driven?
The McKinsey survey found one interesting commonality between data-driven organizations: they were more likely to view analytics as a strategic issue for the entire business, rather than a pure IT concern.
Focusing on the analytics technology itself can be a red herring. The exact details of the technical implementation are often less important than the cross-functional channels it opens across traditional enterprise boundaries.
If you have space in your budget for a shiny and new, and expensive, business intelligence system, by all means purchase it. However, you should also realize it’s the access to that intelligence, and the actions you take as a result, that truly make the difference.
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