Why use data-driven decisions for businesses?
The adult makes an average of over 30,000 decisions each day. This is exceptionally more for businesses. Data provides the basis to make decisions that are better, more accurate and lesser errors.
What if I make bad decisions?
Good decisions ensure lower error rates. This means you save time and consequentially save money. If you continuously make bad decisions, your business loses out in the competition. If you want to grow and expand your business, you need to make decisions that are spot-on and timely.
When should I consider data-driven decision-making?
Digitization of business has grown exponentially since the COVID-19 pandemic and what would come after. If you are an SME in Malaysia, you would have incorporated some digital services and platforms into your business by now. This is where you will be collecting a lot of data for your business operations. This data will be useful to help you decide on your future moves and the directions of your business.
What is a data-driven decision?
Prior to data-driven operations, a lot of business decision-making was done using experience, instinct, gut feelings and more damagingly, assumptions. With the advent of digitization, tracking becomes more possible. Almost all the information and business-related processes can now be quantified and tracked. This includes web traffic, web utilization, mobile services and social media comments, among others. This information can be put to better use and if that is done properly, gives business owners a competitive edge as they make better and more business-benefitting decisions. This type of Artificial Intelligence (AI)-driven model are paving the way in many sectors, more notably in the Fintech segment.
How are data-driven decisions effective?
- Forecast and prediction – Data-driven decisions give you the leverage and platform to make better predictions. In the past, businesses relied on past sale records to forecast the revenue of the future. Data provides better probability percentages.
- New campaigns – Venturing into digital marketing can be risky but if certain businesses have done so and succeeded with convincing numbers to show, then it could be the basis by which you can do that too.
How do I start making data-driven decisions for my business?
Generally, there are a few things you need to do as a start.
- First, you need to plan your data collection. What data do you need what are you planning to measure? You can start with collecting information about your customers or those who are interested in your business (through your landing page or social media). That would give you an indication of your target segment.
- Then, use the right tools to digest the data that you will collect. This could be SalesForce, a popular CRM application or analytics tool that will help you churn out useful information from raw data.
- With the information at hand, you must now read them without bias. While you might read data one way, another person might have differing opinions. Be objective about this.
- Now you can apply the data to help you make decisions. In most cases, your past experience helps but it should not be the main basis of your decision making. There are situations when your experience says one thing and the data tells you another. You will need to exercise caution here and look at the facts.
- Once you have this up and running, then the process must be allowed to continue. Take note that this is a continuous process and needs to be enhanced all the time. What you want to get out of this is the right information so that you have the tools and data to compete.
