We know that we are in the so-called information age. Currently, data and information are generated everywhere, and those who are able to obtain them and convert them into knowledge for decision-making will maintain business leadership. A business cannot make decisions based on beliefs, intuition or perceptions; a solid base is required so that its planning has a structure on which to decide.
According to a Harvard Business Review article, which explains how companies perceive the value of their big data investments, taking Fortune 1000 executives as a reference, 48.4 percent report that their firms are achieving measurable results from their big data investments, with 80.7 percent of executives characterizing their big data investments as “successful.” This indicates that the most important companies are prioritizing this type of investment and have received good results.
So far, everything looks great and it makes sense that making informed decisions is paramount, but where do you start? The first thing that a company has to consider when it wants to start making informed decisions is how to obtain the data and what information to prioritize. A good idea is to define the analysis variables according to a Balanced Scorecard, which was presented by Robert Kaplan and David Norton for the Harvard Business Review in 1992 and has been a reference ever since. This dashboard suggests defining goals and having indicators regarding the perspective of how customers see us, internal business processes, financial perspective and perspective of innovation and learning.
Each of the previously mentioned perspectives requires technological systems to get information and, later, the ideal is to gather that information in dashboards with the help of Business Intelligence systems that help to display that data and at a glance to be able to know the traffic light of each of the previously defined indicators to make agile decisions if any issue with a red light is identified. Thus, for example, the perspective of customers can be addressed with satisfaction surveys and an automated Net Promoter Score, the perspective of internal business processes with the support of systems that control processes, such as ERPs, the financial perspective obviously also through a management system, such as an ERP, with special consideration for cash flow and finances and, finally, innovation and learning with the help of project management measurement tools in which advances of new ideas are identified, team learning is implemented and it can be validated that appropriate progress is being made.
Once the indicators have been defined and the appropriate systems implemented for registration, it is necessary to prepare the link for the creation of the control panels in the management system. It is important to achieve the maximum possible automation in this connection, so that it does not become a complicated job that has to be assigned extra human resources or additional work to have the boards ready. Ideally, visualizing methods should be simple, with graphs and tables with traffic lights, to be able to act with agility in regard to those points whose objectives are not being achieved. In addition, it is ideal to be able to play with the information and drill down so that the depth of the information is investigated to find the point of improvement at that very moment or the reason why the objective of the indicator was not reached so that agile actions can be taken and the issue resolved.
Finally, a core point is the process of continuous analysis and decisions, because on many occasions all the previously mentioned points are prepared but there is no continuous analysis structure, so it is simply reviewed once and forgotten. It is ideal to have specific dates on which the boards are reviewed together with the team involved in each of the areas analyzed and to have a recurring audit to prevent any complicated point from becoming critical. With this, there would already be a complete company structure aimed at making decisions in a rigid way thanks to data analysis. As a result, a greater probability of success will be projected.
With this structure focused on data analysis, we will have the basis to improve the various aspects of the organization previously mentioned; however, we must be aware that it is a process that takes time and we have to gradually refine the information and make change decisions, adjustments in metrics, generation of new tactics derived from the different analyses, etc. It is a continuous process of improvement that never ends, since companies are living entities that transform gradually and this transformation must be continually analyzed with data and perfectly measured. Thus, as the Harvard Business Review article states, the next phase will be to use data for new products and other innovations. I hope you find the way to change your own company by becoming a data-driven business.