Think about the amount of data that passes through your organization every day. In the era of Big Data, that number is likely higher than you can count.
While the idea of managing it all can be daunting, the most competitive and successful companies are finding ways to wrangle it.
If you want to get ahead and stay there, it’s important to learn how to mine your business data for key insights so you can make more informed decisions.
What is data-driven decision making? Today, we’re taking a closer look and sharing how you can get started.
What is Data-Driven Decision Making?
To keep operations agile, business leaders must be able to anticipate problems and react in real time. You also must empower your teams and employees to make strategic decisions on a daily basis.
In many ways, this might seem like an impossible task. However, if you step back, you might find that you already have almost everything you need.
The key ingredient to making smart, data-driven decisions lies right within your organization. Of course, we’re talking about data.
The 2024 Top 10 ERP Systems Report
What vendors are considering for your ERP implementation? This list is a helpful starting point.
3 Benefits of Using Data to Drive Decisions
You might have critical information at your fingertips, but you don’t necessarily use it to predict future outcomes or create a profitable and efficient supply chain.
If this describes your company, you may need to move to a new decision paradigm. Here are three of the top reasons why it’s smart to lead with data when making business decisions.
1. Eliminates Organizational Siloes
If a business process isn’t working, the workflow itself might not be to blame. Instead, the issue could be how your employees are interacting with one another (or not interacting).
When siloes exist, teamwork suffers. This usually happens when one group has access to certain data, but another group does not.
When you organize your data within a modern ERP or SCM system, you can ensure everyone is using the same platform, and it becomes easier to collaborate. Not only does this make internal decision-making easier, but it enables a consistent, personalized customer experience.
Of course, if you streamline your data and a workflow still isn’t working, it might be time to perform business process management to understand what’s not working and how to fix it.
2. Establishes a Single Source of Truth
As information gets passed around your organization, you need a way to track and control it.
When you centralize your data, everyone will know how to access and share key insights. Then, they can use those insights to make decisions for their department.
All the while, there will be only one source of truth for each data point. You don’t have to worry about one team making a decision based on one version of a file, and another one referencing an entirely different file.
3. Drives Continuous Improvement
When you allow data to lead your decisions, you may be surprised to discover an uptick in employee engagement. This is because it’s easier for team members to see what other departments are doing and consider how to make each other’s lives easier.
How to Lay the Groundwork for Smart Business Decisions
So far, we’ve covered why data-driven decision-making is important and the benefits it brings. Yet, you might be wondering about the specifics of how to leverage data to improve business performance.
There are several solutions that can help you analyze information, including AI technology and data visualization tools. However, many organizations already have this technology in place – they just aren’t leveraging all their data.
In our experience, we’ve found that clients find it helpful to walk through a strategic planning process before diving into their data or conducting ERP selection. This typically involves:
- Conducting a readiness assessment to understand current levels of buy-in and alignment
- Defining an information strategy
- Assessing your current technology state
- Assessing your current data sate
- Tying existing data to corporate objectives and restructuring it to enable KPI tracking
- Defining your future state
- Assessing your technology infrastructure to determine if you need to reimplement, repurpose, or replace your current systems
What to Do With All That Data
1. Track KPIs
Are your workflows flowing as they should? How is your employee satisfaction?
With key performance indicators (KPIs), business leaders can drive informed decisions from the data they collect.
Assess where you’re at and how far you are from where you want to be. By checking in routinely, you can learn about any problems that might be on the horizon and initiate a proactive response.
2. Make Visuals to Understand Data
It can be difficult to make data-driven decisions if you can’t understand what the data is telling you. Simply reading it in paragraph form or in an Excel spreadsheet isn’t much help.
With modern enterprise software, such as one of the top ERP systems, you can access customizable dashboards that make the key points easier to understand.
3. Influence Executives
If you’re trying to get key stakeholders on board for a project, data speaks louder than anything else. C-suite leaders want to see concrete numbers showing that your idea is a good one, and the best way to establish credibility is to show them the facts.
Leverage the Power of Data-Driven Decision Making
You don’t have to make all your important business decisions blindly. It’s time to harness the power of your business data.
What is data-driven decision making? It’s the difference between a well-planned business move and a shot in the dark. It gives you the confidence to press ahead, knowing that your strategy is firmly rooted in facts.
To learn more about ERP real-time data analytics, including predictive and prescriptive analytics, contact our independent ERP consultants today.