Data-Driven Decision-Making for Executives and Senior Management
To stay competitive, today’s businesses must make more informed decisions and at a faster pace than ever before. Fortunately, big data and data analytics make that possible. Many businesses are analyzing data to identify trends, patterns, and insights in making better decisions. Rather than relying on the most seasoned managers to have the right answers, organizational leaders are relying on data to provide more accurate readings on business performance, enhance forecasting of market trends, and improve risk management. For a long time, businesses made key decisions about hiring, pricing, and operations using observations and theories. By harnessing the power of data, organizations can notably increase their efficiency and, ultimately, improve their bottom line.
As data-driven business cultures gain traction, companies depend more heavily on data experts and professionals with the skills to integrate data into their work. Through advanced education in programs such as the online Master of Science in Information Systems from Norwich University, professionals can position themselves for success in a business world more and more reliant on data-driven decision-making.
What Is Data-Driven Decision-Making?
Data-driven decision-making involves collecting and analyzing data and, then, drawing insights from that analysis. These insights help businesses make strategic decisions based on more than instinct, experience, or tradition.
Consider the struggle of a major retailer trying to get online customers to complete their purchases. Despite the company’s repeated efforts, including special promotions for online purchases, website visits were not turning into sales at the desired rate. To improve results, the company turned to data. Analysts located the breakdowns in the customers’ digital shopping experience and discovered why and how customers were not completing purchases. The aspects of the website meant to entice customers instead frustrated many of them, because they wanted an express route to specific products. With this information, the retailer adjusted the website so customers could find items in fewer clicks. Making this adjustment increased sales. This hypothetical example illustrates how data-driven decisions can lead to desired results.
Companies need more than raw data to make sound business decisions. They also need trained minds and the right tools to make sense of the data. Dashboards and reporting tools, which can organize vast amounts of processed data into easy-to-follow charts or tables, can prove invaluable for different stakeholders to more easily understand data to draw key insights. By quantifying data, businesses can draw conclusions through calculations as opposed to just observations to support strategic decision-making.
Both Google and Walmart have implemented data-driven decision-making with great success. Google’s entire business model is built on data analytics. In its application in the human resources department, the company conducted surveys, deployed a series of tests, and, then, put statistical data analysis to work to better understand the importance of managers in the organization, according to a post on Google’s re:Work blog. After interpreting their data, Google not only determined its managers could make a significant impact on the company’s success, it identified specific behaviors that made managers successful at Google. With this information, the company adjusted training practices. The new processes reduced employee turnover and improved employee satisfaction and performance.
Walmart also relies heavily on data to make decisions. The retail giant relies on its “Data Café”, one of the world’s largest data collection centers, to improve efficiency in all areas of operations from the supply chain to the checkout system, according to an article in Talk Business & Politics. Through data analytics, the company can predict customer demand at different hours of the day and schedule associates appropriately to improve the efficiency of its checkout process. The retailer also can determine whether to use self-checkout or traditional checkout depending on the needs at each store.
To fully appreciate the value of data-driven decision-making, note how the process differs from using observational studies to make decisions. Observations may be anecdotal and not accurately capture larger realities. Bias, gut feelings, and inaccurate presumptions may influence decisions not rooted in data. However, businesses can measure the effectiveness of data-driven decisions by established metrics, which makes the decision-making process more objective.
Data-Driven Decision-Making and Leadership
Business leaders who are responsible for making tactical decisions about operations, finance, and company strategy can benefit greatly from data-driven decision-making.
Managing company operations relies on complete, timely, and accurate information. Business leaders who can draw insights from data can lower the costs of products and services and improve customer service. Examining sales data can offer insights about what items and how much to stock. Additionally, by using data to create models, business leaders can foresee the impact of decisions and tailor them accordingly.
Data also proves valuable when managing a company’s finances. With accurate information, business leaders can better estimate the costs of various projects and operations, prepare forecasts, and determine how different actions might impact key performance indicators such as employee turnover rate, customer satisfaction, and client acquisitions.
Increased data accuracy culled from cleaning and processing large data sets can help business leaders develop more informed strategies. For example, when companies collect and effectively organize their data collected from different sources, they can more precisely understand which strategies to adopt. A data-driven decision-making model supports the use of objective information to inform difficult decisions while enabling companies to more easily shift strategic paradigms as information is updated.
Business leaders who build a corporate culture around data-driven decision-making are better positioned for success. By learning how to effectively leverage data, companies can make fewer mistakes, be better prepared for the future, and earn greater profits. The bottom line, data-driven corporate cultures can optimize corporate performance.
The Benefits of an Advanced Information Systems Degree
Information systems play a key role in making data usable to decision-makers and allowing top executives to monitor the dynamics of a business. For this reason, those who manage information systems provide an invaluable service to businesses.
An advanced degree in information systems can help individuals develop skills that many businesses covet. By pursuing this course of study, graduates gain many benefits including:
- Advanced cultivation of core competencies like leadership and analytical skills.
- The ability to pursue leadership roles in the field.
- The opportunity to earn a higher annual salary.
Norwich University offers an online Master of Science in Information Systems program that helps students build these competencies on a deeper level, enabling them to pursue a career in information systems. The program’s comprehensive curriculum trains professionals to develop a complete lifecycle for information systems projects, manage and maintain the technical infrastructure of a company, and tackle large data sets using quantitative evaluation techniques.
Learn to Advance Data-Driven Decision-Making by Earning an MS in Information Systems
As businesses move their operations to digital platforms and make greater use of big data, the demand for experts in information systems will grow. Those with the knowledge and skills to analyze data and build robust information systems will likely find themselves in great demand. Employment for computer and information systems managers is forecasted to rise by 11% between 2018 and 2028, about twice as fast as the national average for all occupations, according to the U.S. Bureau of Labor Statistics. Discover how an online Master of Science in Information Systems from Norwich University can prepare aspiring information systems experts to achieve their professional goals.
Your Quick-Start Guide to Data-Driven Decision Making, Smartsheet
Why Data Driven Decision Making Is Your Path to Business Success, Datapine
Guide to Data-Driven Decision Making, Children’s Bureau
Capturing the Digital Customer: Simplify the Shopping Maze to Win More Sales, Deloitte
Great Managers Still Matter: The Evolution of Google’s Project Oxygen, re:Work
Wal-Mart Works to Use Big Data to Improve Checkout Process, Manage Supply Chain, Talk Business & Politics
How Observational Studies Can Inform Healthcare Decision-Makers, Health IT Analytics
Importance of Information Systems in an Organization, Houston Chronicle
How Leadership Can Create a Data-Driven Culture and New Careers in the Future Workplace, Forbes
Management Information Systems (MIS), Inc.
Computer and Information Systems Managers, U.S. Bureau of Labor Statistics