Using Data to Make Informed Decisions
Updated: Oct 26
In the fast-paced world of modern business, data plays a vital role in making strategic decisions. To succeed in this data-driven landscape, businesses must harness the power of data analytics. This article will go into what data analytics is and what are the essential principles of using data for informed decision-making.
Understanding Data Analytics
Data is facts and statistics collected together for reference or analysis. Data analytics is the process of turning raw data into valuable insights for informed decision-making. It involves translating those facts and statistics into plain English through inspecting, cleaning, transforming and modeling that data to reveal meaningful information. So what are the essential steps to using this data wisely?
1. Set Goals for your Business
Clear business objectives set the direction for data analysis, guiding the analytical journey. Defining those objectives is a vital first step in the data analysis process because they become the goals of the analysis you conduct. It drives what sources you get your data from, what type of data you collect, how you clean your data, how you design your model and analyze, and finally how you extract insight from those results. Common business goals include:
Improving customer experiences
Enhancing operational efficiency
Optimizing financial performance
Launching new products or services
Managing human resources
Tracking contract performance
Efficient inventory management
Improving overall performance
2. Collecting Data Carefully
To have a well-rounded strategy, you need to use different methods to gather the right data. Data can be collected through various methods, including:
Records and documents
Automated data collection from financial and sales software, customer profiles, and project management tools
3. Analyzing and Visualizing Data
Getting the right data and understanding it is crucial. Tools like Excel, Power BI, and Tableau help a lot. You can even learn from social media, websites, accounting software, and email marketing tools.
Data visualization is like turning complex data into simple pictures, which makes it easier to understand, especially for those who are new to data analysis.
4. Let Data Drive Your Decisions
Data-driven decision making can provide businesses with numerous benefits, including increased accuracy and reliability, more objective decision making, improved efficiency, and competitive advantage. Companies seeing the most benefit from data-driven decision making have experienced this level of impact by empowering every kind of employee with the ability to ask and answer their own questions to inform their specific decisions. Companies like Disney, Verizon, Wellthy, CVS, and more are using AI Analytics from ThoughtSpot to arm anyone in their organizations with the ability to find data-insights and act on them.
Illustrative Showcases of Data-Driven Choices
Google's People Analytics Team: They used performance reviews and surveys to show how managers' actions are connected to how well teams perform. This helped them figure out what good managers do.
Amazon's Product Recommendations: Amazon's suggestions for what to buy are based on how you've acted on the website. This shows how this makes people buy more things and get more involved with the website.
Southwest Airlines and Customer Data: Southwest Airlines uses what they know about their customers to predict what services will make money. This has led to a big increase in the number of customers they have every year.
Real-Life Examples of Data-Driven Choices
Here are some examples of local/small business data strategies
Data analytics aims to address business problems or achieve specific goals. Here are examples of business objectives and how data analysis contributes to them:
Identifying recommended products for customers
Targeting marketing campaigns effectively
Optimizing employee schedules
Recognizing seasonal buying patterns
Calculating average customer spending
Assessing cash flow for daily operations
Identifying valuable customers
Healthcare – Hospital:
Categorizing patients based on disease stages
Tailoring personalized treatments
Optimizing ER scheduling
Monitoring treatment effectiveness
Linking patient diets with disease types
Segmenting patients based on demographics and medical history
Data analytics is a powerful tool for making informed decisions, as demonstrated by real-world examples in the business world. Our insights underscore the vital role of data in today's highly competitive business environment, emphasizing the importance of adopting data analytics for success in specific industries.
About RL Engineering and Tech Solutions: RL Engineering and Tech Solutions is an industry-leading engineering, technology, and business solutions and consulting firm who empowers our clients with innovative strategies and tools to achieve their company’s growth, profitability, and success goals and add value to their business. Leveraging over two decades of experience in technology, engineering, and business development across various sectors, we offer a comprehensive set of services including data analytics, AI (Artificial Intelligence), performance management, process improvement, proposal writing and support, and strategic planning. Our team is committed to working and partnering closely with clients to assess, identify, and enhance critical aspects of their businesses. We assist clients in optimizing their business processes and operations by maximizing desired factors while minimizing undesirable ones. We take a holistic approach to identify areas of concern and determining the best strategy and solution(s) for execution. This ensures that potential issues are not only identified but also thoroughly understood, enabling our team to develop effective strategies and solutions that cater to each client's unique needs.