In the world of big data and analytics, solely using your gut to make important decisions should happen — well, never. But, the truth is, executives driven by instinct over insights may be more common than you think.
According to PwC's Global Data and Analytics Survey, using data consistently and effectively still remains more theoretical than practical.
'Data-Driven' Remains Elusive
Although executives want to become more data-driven, 61 percent say their companies are only somewhat or rarely data-driven in their decision-making. The study also shows companies still aren’t where they want to be when it comes to using data and analytics for faster, better decision-making — and don’t even think they’ll get there by 2020.
This doesn’t surprise Blair Linville, CEO of Tectonic, a Denver-based big data analytics, marketing automation, customer relationship management and cloud consulting services provider.
“People who embrace not just technology, but the access and availability of data, and use it to solve very meaty, specific business problems are very much empowered. They're a whole lot smarter about decisions and better able to drive business impact,” said Linville.
But, he added, “Those who have this combination are few and far between.”
We asked Linville to explain the steps organizations can take to become more to data-driven.
1. Democratize Your Data
Last year, Gartner revamped its Magic Quadrant (MQ) for Business Intelligence and Analytics Platforms based on the need for businesses to engage in more agile decision-making without having to wait for IT or data scientists to supply the reports to do so.
This year, Gartner predicts that by 2020, organizations that give employees access to internal and external data will see the business value of their analytics investments double over those companies that do not provide such access.
Clearly, if organizations want to become data driven, they need to empower their citizen data scientists.
“What’s exciting and interesting is being able to use technology to expose lots of people to solving problems,” said Linville. “Give employees access to data, make the technology easy for them to use, and have a centralized governance function. Provide a support system around helping others make data-informed analysis and decision.”
2. Create a Culture of Experimentation
Although businesses are giving more employees access to BI and analytics tools, Linville says that executives should not underestimate the power of culture to drive change throughout the organization.
“Don’t just give employees a self-service tool; create a culture of experimentation, and show people how to test and measure to be more effective,” recommends Linville. “Seed that thought process around how to use the data and tools to answer difficult questions to all employees relevant to the business.”
He added that holding people accountable, and rewarding them for using data to improve the quality of their decision-making are other important ways to instill a data-driven culture.
For example, he noted, when leadership is engaging with people, they should ask questions like: “What is the algorithm or data source you used to forecast your outcomes?”
3. Mind Your Reports and Dashboards
Today’s reports and dashboards have replaced flat, text-heavy spreadsheets with interactive, visual capabilities that let users explore data to find actionable insights. According to Linville, effective reporting and dashboards not only allow leaders to make sense of massive amounts of data and engage in real-time decision-making, but they also support management by:
- Providing a big-picture view of the business through the ability to visualize key metrics
- Identifying areas of expansion and opportunities (i.e. cross-sell/up-sell)
- Keeping the business competitive by helping leaders make better-informed strategic decisions
Linville said the best reports and dashboards should be able to pull data from multiple sources, be easy to read and quick to comprehend. Users should also be able to filter or drill down on key metrics to see details, as well as have access to scorecards to assess employee performance and “assist across the finish line,” he adds.
Finally, he advised, leaders should be able to perform trend analysis to understand patterns and trends across key metrics.
“Being able to see a direction allows for management to know which processes are effective, and which need to be improved,” he said.
4. Keep the Focus on Real Business Problems
If a company wants to truly empower all employees — including leadership — with data, and change the way they make decisions, users need to understand how to work with these tools to solve real business problems, concluded Linville.
“It’s a collaborative effort between real business problems and the capability of technology,” he said. “You have to put problem-solving at the forefront to ensure that business drivers are identified, use cases prioritized and you have a real view of actionable insights. If you’re not going to turn insights into action immediately, don’t waste your time and energy.”