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A Guide To Data Driven Decision
Making: What It Is, Its
Importance, & How To
Implement It
What is data-driven decision-making?
Data-driven decision-making (DDDM) is defined as using facts, metrics, and data to guide
strategic business decisions that align with your goals, objectives, and initiatives. When
organizations realize the full value of their data, that means everyone—whether you’re a
business analyst, sales manager, or human resource specialist—is empowered to make
better decisions with data, every day. However, this is not achieved by simply choosing the
appropriate analytics technology to identify the next strategic opportunity.
Your organization needs to make data-driven decision-making the norm—creating a culture
that encourages critical thinking and curiosity. People at every level have conversations that
start with data and they develop their data skills through practice and application.
Foundationally, this requires a self-service model, where people can access the data they
need, balanced with security and governance. It also requires proficiency, creating training
and development opportunities for employees to learn data skills. Finally, having executive
advocacy and a community that supports and makes data-driven decisions will encourage
others to do the same.
Establishing these core capabilities will help encourage data-driven decision-making across
all job levels so business groups will regularly question and investigate information to
discover powerful insights that drive action.
The importance of data-driven decision-
making
The amount of information collected has never been greater, but it’s also more complex.
This makes it difficult for organizations to manage and analyze their data. In fact,
NewVantage Partners recently reported that 98.6 percent of executives indicate that their
organization aspires to a data-driven culture, while only 32.4 percent report having success.
A 2018 IDC study also noted that organizations have invested trillions of dollars to
modernize their business, but 70 percent of these initiatives fail because they prioritized
technology investments without building a data culture to support it.
In pursuit to be data-driven, many enterprises are developing three core capabilities: data
proficiency, analytics agility, and community. Transforming how your company makes
decisions is no easy task, but incorporating data and analytics into decision-making cycles
is how you will see the most transformative impact on your organization. This level of
transformation requires a dedicated approach to developing and refining your analytics
program.
Organizations benefiting from data-driven
decision-making
Thanks to modern business intelligence, organizations are inching closer and closer to
understanding the value of data-driven decision-making across all departments and roles.
Here are a few examples of organizations that are effectively leveraging the value of their
people and their data.
Lufthansa group increased organizational
efficiency by 30%
Providence St. Joseph Health improved quality
measures and cost-of-care
Charles Schwab Corporation increased their
speed to business insights
“ Without our visual analytics solution, we would be stuck analyzing
enormous amounts of data in spreadsheets. Instead, our dashboards
provide clear actionable insights that drive the business forward.”
DONALD LAY, SENIOR BUSINESS INTELLIGENCE MANAGER AT CHARLES SCHWAB
CORPORATION
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visualizations with
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6 steps to effectively make data-driven
decisions
These steps can help you can find the “who, what, where, when, and why” to make the
most of data—for you, for colleagues, and the business. But keep in mind that the cycle of
visual analysis isn’t linear. One question often leads to another, which may mean you need
to go back to one of these steps or skip to another—eventually leading to valuable insights.
Step 1 - Identify business objectives: This step will require an understanding of your
organization’s executive and downstream goals. This could be as specific as increasing sales
numbers and website traffic or as ambiguous as increasing brand awareness. This will help
you later in the process to choose key performance indicators (KPIs) and metrics that
influence decisions made from data—and these will help you determine which data to
analyze and what questions to ask so your analysis supports key business objectives. For
instance, if a marketing campaign focuses on driving website traffic, a KPI could be tied to
the amount of contact submissions captured so sales can follow-up with leads.
Step 2 - Survey business teams for key sources of data: To ensure success, it is crucial to get
inputs from people across the organization to understand short and long term goals. These
inputs help inform the questions that people ask in their analysis and how you prioritize
certified data sources.
Valuable inputs from across the organization will help to guide your analytics deployment
and future state—including the roles, responsibilities, architecture, and processes, as well as
the success measurements to understand progress.
Step 3 - Collect and prepare the data you need: Accessing quality, trusted data can be a big
hurdle if your business information sits in many disconnected sources. Once you have an
idea of the breadth of data sources across your organization, you can start data
preparation.
Start by preparing data sources with high impact and low complexity. Prioritize data
sources with the biggest audiences so you can make an immediate impact. Use these
sources to start building a high-impact dashboard.
Marketing agency Tinuiti centralized more than 100 data sources with an analytics platform
that supports faster data preparation to create custom dashboards for 500-plus clients and
give them the full story of their brand efforts.
Step 4 - View and explore data: Visualizing your data is crucial to DDDM. Representing your
insights in a visually impactful way means you’ll have a better chance of influencing the
decisions of senior leadership and other staff.
With many visual elements like charts, graphs, and maps, data visualization is an accessible
way to see and understand trends, outliers, and patterns in data. There are many popular
visualization types to effectively display information: a bar chart for comparison, a map for
spatial data, a line chart for temporal data, a scatter plot to compare two measures, and
more.
Step 5 - Develop insights: Critical thinking with data means finding insights and
communicating them in a useful, engaging way. Visual analytics is an intuitive approach to
ask and answer questions of your data. Discover opportunities or risks that impact success
or problem-solving.
JPMorgan Chase embraced a modern analytics solution to make decisions that are
important to the bank’s health. JPMC gains a comprehensive view of the customer’s
journey by reviewing line-of-business relationships (i.e. products, marketing, and service
touch points) with customer data. For example, the Marketing Operations team performs
analyses that influence design decisions for the website, promotional materials, and
products like the Chase mobile application.
Step 6 - Act on and share your insights: Once you discover an insight, you need to take
action or share it with others for collaboration. One way to do this is by sharing
dashboards. Highlighting key insights by using informative text and interactive
visualizations can impact your audience’s decisions and help them take more-informed
actions in their daily work.
Market
Overview
Dashboard
from
Boeing
This dashboard from
Boeing uses 10 charts to
give viewers different
perspectives and a chance
to discover new insights
about airplane demand
over the next 15+ years.
EXPLORE THE PUBLIC VIZ
With an analytics platform such as Tableau, you can create and share dashboards in a
secure, governed environment where others can search, view, and reference data in their
workflows. To ensure that you are serving the needs of your organization, you should
regularly evaluate governance models and data sources so people can find the data they
need.
Data-driven decision-making is transformational. When visual analytics is embraced by
everyone in an organization, data becomes a critical enterprise asset. With a modern
business intelligence solution, data-driven decision-making becomes a company mission,
more than a hassle. This leads to faster, more-informed decisions. And these decisions will
generate a stronger bottom line, greater creativity and commercial success, and more
engagement and collaboration from employees.
Read more about the elements of strong Data Cultures and learn how to build your own
with the step-by-step guide, Tableau Blueprint.
Related Content
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Your methodology to becoming
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a data-driven organization Dig into elements that separate See how other companies shift
the top performers from the rest. their culture towards data.
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