Building a Data-Driven Business
Although “big data” has been on the scene for more than a decade, many companies still struggle with how to use data to help them succeed in the marketplace.
Challenges for companies of all sizes include how to utilize existing data in disparate systems, how to maintain that data and how best to leverage the data to create a competitive advantage. Data-driven decisioning doesn’t have to be a big, scary investment for your company. By breaking it down into smaller steps, companies can find their way to begin creating a culture of informed decisioning.
Start with your objectives.
The first step on your path to data-based decisioning, is to determine how data analytics can best be used to the benefit of your organization. Look to your organization’s objectives and leadership metrics and determine how the data you already have can help you to achieve your goals. A common mistake that companies make is to begin analysis without understanding what they are trying to achieve. Basically, analysis for analysis’ sake. Purchasing additional data and more sophisticated tools can become a rabbit hole of spend – unless you have specific business drivers that you know additional data or analysis would support, start with what you already have. The goal here is to initiate a culture shift – reducing decisions made on gut instinct and increasing decisions made through informed analysis. Start small and simple with clearly articulated measures and gradually grow to more mature analytics which are always based on strategic drivers and leadership metrics.
Use the data you have.
Utilizing existing data stored in disparate systems is one of the biggest hurdles most companies face. Data lives in different formats in legacy systems or spreadsheets that can’t talk to each other. To mitigate this issue and start building your culture of data-based decisioning, assess what data you already have and what is most readily accessible and keep your analytics goals achievable. Most reporting tools, like Microsoft’s Power BI, will give you easy access to many of the most common systems and allow you to pull data into a shared database.
The goal here is to start to use your existing data to drive action in your organization – the analysis doesn’t have to be sophisticated or innovative, it just needs to change behavior. What you measure is what your teams will work to improve. Embarking on a multiple year, high cost effort to standardize and cleanse enterprise data is more than many companies can handle and can have questionable ROI for those that undertake the effort without significant investment in skilled resources. Instead, start small with the data you can readily access, build an analytics capability, and then grow from there. Small wins can still have ROI.
Build a cross-functional team.
Once you understand the data that you have and the objectives you want to support, your next focus should be on getting the data into a usable form and maintaining it. Typically, this will require some amount of data clean-up and standardization, including defining standards for shared elements like “customer”, “product”, etc. Research has shown that the best way to do this is to establish a cross-functional data governance team who can represent organizational needs. This team can then consider the full lifecycle of the data – how it is gathered, what standards should it adhere to, who is responsible for maintaining it to those standards, and what should be done with the data when it’s no longer meeting them. Again, your focus should be on taking small steps forward. Your data governance team doesn’t have to include data scientists from MIT, but it should include people from across the organization who understand your business and have the context to start to shape your analysis.
By starting small and staying focused on your organization's objectives, your path to insight-driven decisions can be a successful one.
Written by:
ANN TOFOLO
With over 20 years of experience leading organizations through transformations, Ann helps Excelerate’s clients to navigate the complexities of modern business and considers herself a connoisseur of fine breakfasts.