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What to Know About Data-Driven Decision Making

Published: September 9, 2021
 

A good business decision can lead to a great partnership, the development of a new product, or a windfall for your company. But the wrong decision can lead to budget cuts, layoffs, and a potential shutdown. How can you predict what move will be right and which will be wrong? “Data-driven decision making” can help you make the right choice. That’s when you use facts, statistics, and metrics to make informed business decisions. You can learn about data-driven decision making in a good business administration program and hone your skills over time with some real-world experience.

Importance of Data-Driven Decision Making

You’re probably aware that financial data are at the cornerstone of many business decisions. Accountants and finance specialists will look at the company’s profit margins and expenses to determine a yearly budget. In turn, administration will use the budget as well as data on financial gains and losses to determine where money should be spent.

But data-driven decision making isn’t just for CEOs and CFOs. If you were a marketing analyst, you could use customer surveys to determine how to better market your products. If you worked as an HR generalist, you could use employee feedback to improve your organization’s benefits package and recruitment efforts.

How to Use Data-Driven Decision Making

Before you gather data, you need to know what your objectives are. What are you trying to learn and from where will you get the most accurate and relevant data? Usually when you set out to gather data, you’re trying to solve a problem. What’s yours?

Once you understand what you’re looking for, you can follow some data-driven decision-making steps:

  1. Collect relevant data
  2. Organize, process, and manage data
  3. Analyze data, looking for patterns
  4. Draw conclusions from data
  5. Apply your knowledge!

In case you’re wondering what kinds of companies actually use data-driven decision making, most all of them do! Google uses People Analytics to retain its best staff. Domino’s Pizza gathers info from 85,000 data sources every day to refine the customer experience. And Uber uses predictive analytics to figure out where and when their drivers will see peak demand.

Benefits of Data-Driven Decision Making

The more information you have, the better decisions you can make. That’s always been true. But tons of raw data aren’t the answer. With the right data and the right approach, you can be more confident in your decisions. After all, you have the data to back up your choices. Data-driven decisions provide a foundation of evidence for you to back up your ideas and allow for more consistent decision making over time. They also offer more transparency and insight into the decision-making process.

And they allow you to be more proactive. Just like Uber uses data to predict what’s coming ahead for its drivers, you can gather past data trends to predict likely future outcomes. And when you use data effectively, you can be more efficient and save your company money.

 

If you’re ready to develop your data-driven decision-making skills, contact Charter College today. We offer a degree completion Bachelor of Science Degree in Business Administration that can provide you with the knowledge and skills for a career in the public, private, or nonprofit sector. Call 888-200-9942 or fill out the form to learn more.