Data-driven decision making has quickly become very important to business owners and decision-makers across all industries. Data can be found everywhere from Google AdWords and Analytics to Excel sheets with thousands of charts and graphs. However, it only becomes useful when it is transformed into something that can be easily understood and accessed quickly.
This is what Master Data Management Systems (MDM) are for. MDMs define and manage critical data, and integrate it into one central system. This, in turn, provides companies with a single point of reference and allows them to make decisions based on the most recent, accurate and complete information.
Data helps businesses grow
Fractured data which is formatted and structured differently causes problems for many companies.
There is rarely one person who is aware of all the data that flows through the company and what to make of it. More often than not, different people deal with data that only relates to their specific role in the company. And so, they can only make decisions regarding issues in their department, as opposed to the entire company.
This also makes it impossible to analyze live data, and use it to help the business grow.
Let’s look at conversion rates as an example. While monitoring Google Analytics, your marketing team may notice a product that is performing well. It’s showing a high conversion rate and a large number of units sold. That’s great, right? Well, it’s not that simple. Without involving your sales team, the marketing team will not be able to determine whether the product is bringing in profit.
You need to understand what causes its high sales. Is it performing well, or is it only because of its low price? Also, you have to analyze your entire marketing campaign, determine your audience and then figure out whether the product is popular. And this is far from everything that you need to know.
So, would you make the same decisions about your product if you had all of this information? Probably not.
DIfferent people and/or departments analyze and interpret data differently. And the funny thing is, all of these interpretations may be correct in one way or another.
Your business needs to know whether the product is profitable over time. To make the right decisions at the right moment, you would have to spend hours upon hours examining reports, facts, and figures. All because you didn’t have a quick and efficient way to analyze your data. Until now.
Benefits of data-driven decision making
Business intelligence and combining data into a central system give you several benefits:
- You gather and store all of your data in one place (so it won’t be lost or needlessly copied across different departments)
- You have control over all of your data
- You can adjust which and how information is stored, collected and shared (quarterly, monthly, daily, hourly, etc.)
- You can have a visual representation of your data in different programs, such as PowerBI, QlikView, Data Studio, etc.
This situation may sound familiar: you start collecting information from different sources and/or departments. Then you manually export it into Data Studio or Excel and build pivot tables. Next, you look through potentially thousands of data entries to understand how your business is performing.
And after all this, you still need to combine information from different departments and make it into something that can help you make decisions. As a result, senior management meetings turn into long discussions of different data interpretations. In the end, resulting in different action points.
One system where all of your data is gathered will bring you lots of benefits. Instead of spending tons of hours creating reports manually, you would have a system that collects, prepares and cleans your data for you. And then highlights the most relevant information.
Having one central system for your data that “speaks the same language” (such as BigQuery, great for working with massive amounts of data) allows you to use applications that will pull your data and easily show you the information with the help of a business intelligence system (such as PowerBI, QlikView, Data Studio, etc.). As a result, you get beautiful visuals that help you make important decisions at the right time.
This sort of unified management system will be extremely useful during those senior management meetings.
Am I ready for data-driven decision making?
Data-driven decision making becomes extremely relevant when you want multiple sources of information to talk to each other. If making decisions using Excel or similar spreadsheets works for you – great! However, as soon as they are no longer helping you and are instead causing confusion – you need to change something.
Data goes beyond just looking at how your business is performing. It also allows you to keep an eye on competitors and see how you compare. Data-driven decision making does not only solve your data gathering problems but also helps you grow your business.
Now that you know how important data-driven decision making is, learn how to communicate it to your team!