These days, the vast majority of businesses, from small enterprises to giant corporations, are digitizing their data to better understand various aspects of their businesses. When used correctly, data analysis can net great gains in your business management and your decision-making process.
However, gathering data and utilizing data are two very different things, so when you want to use your data to make data-driven decisions, it's best to make sure you're leveraging data analysis correctly. Here are a few guidelines for making better data-driven decisions.
1. Clearly define what insights you seek to gain
Before you start gathering data, you should be able to clearly define the type of insights you seek to gain. For example, are you trying to find weak spots in your online presence? Are you trying to see how competitive you are within the market? Are you trying to analyze the performance of your supply chain?
Before you do anything with your data, it's absolutely vital that you understand the business use of your data. Set goals for what you want to find in your data and outline the type of decisions you hope to make. Doing this makes it easier to narrow down the type of data you need to gather and the actionable steps you can take with it.
2. Organize your big data for better analysis
While big data is certainly useful, it's also difficult to make any kind of decision when it's muddled. You need to organize your data and sort it into different categories such as demographics, click-rates, follow-throughs, and returns on investment. By doing so, it'll be much easier to analyze and therefore more useful when it comes to making decisions.
3. Identify weak points for future improvement
Data analysis is often used to pinpoint the weakness in your business so you can have better insight into how to improve operations. Identifying your weak points also helps the business grow. By knowing where you need to improve, you can streamline workflows and improve delivery without disrupting everyday operations.
4. Get real-time data reports
The thing about data is that it's constantly changing. Every minute of every day generates new data that can be used. However, when you leave data analysis to just one report at the end of the week, you're constantly using old data.
For data-driven decision making, it's important that you can have access to real-time data reports and dashboards with self-serve data analytics.
5. Track and scale business performance
While many organizations are keen to use data analysis to understand its customers, many neglect to apply data analysis to the operations side of things.
Making data-driven decisions in this space is equally as important as understanding your customers and your place in the market. The better and more functional your operations are, the more resources you can invest in other areas, such as investing in IT software.
Data can also be used to track how quickly your product is made, how efficient your employees are, and can also identify areas where you can save money and streamline operations. Using data to track and scale business performance also benefits employees by reducing the cross-talk or other inefficient patterns.
6. Use predictive analytics to anticipate the market
As the technology involved in data analysis continues to become more sophisticated, so too does your ability to use data in a nuanced way that can inform your decisions. One of the hallmarks of high-tech data analysis is the use of AI technology to generate what-if scenarios that can help you plan for the future.
About 90% of companies believe using predictive analytics to anticipate market trends is important for business operations. By analyzing past patterns, predictive analytics can anticipate the forecast of the market, which can help you plan and prepare for multiple scenarios.
Upgrading the software of your business and hiring more IT employees is only a fraction of the work required to truly leverage your analytics for better decision making. The goal of using data to drive your decision making means you're able to get access to relevant and updated data at any time, and that you're prepared for all what-if scenarios that might affect the success and growth of the business.