With data management well beyond the days of spreadsheets, technological advancements have enabled unprecedented amounts of data to be recorded and categorised.
With this potential growth, business decision making is moving towards the utilisation of Big Data to influence their future decisions, rather than working from gut instinct or feeling. Understanding how and why decision making is being changed is crucial, along with understanding how data analytics can aid your business’ future performance.
Managing Big Data for your business in 2019
Traditional business models are now being broken down in favour of decision making that heavily incorporates Big Data management and data analytics. A McKinsey Global Institute survey showed that data-driven organisations are 23 times more likely to acquire customers, six times as likely to retain customers and 19 times more likely to be profitable from data-driven analytics.
While Big Data may seem ‘too big’ for your company, it’s possible for it to be used by businesses of any size. While it’s able to gather data from an array of analytical processes, it’s important to differentiate what these processes are classified as, and how they can influence decision making for your business. Dr Michael Wu, Chief Scientist of San Francisco-based Lithium Technologies, has broken down the three main categorisations of data analytics:
- Descriptive. The most simple and basic usage of data analytics, essentially a summary.
- Predictive. Utilising statistical modelling, data mining and machine learning to look at past and present data, and use it influence future decisions.
- Prescriptive. The most advanced, this recommends an array of action plans and shows the outcome of each plan. This utilises actionable data in the form of a feedback system, helping to track the outcome produced by the chosen action.
How can data analytics influence your decision making?
Continuing digital decision making through every level of a business is essential for performance and growth, helping open a number of avenues. Allowing data analytics to influence your decision making has internal and external organisational benefits, shown through these three areas data:
1. Provide a better customer experience
Data analytics can play a large part in your business’ decision making, helping to decipher patterns from both employees and customers, allowing you to understand their interactions, and work with the IT department to further enhance these interactions.
Having your IT departments liaise with marketing teams will help drive key audience outcomes and targets. By running data simulations, your business will better recognise how to realign budgets based on a customer’s reaction to particular marketing campaigns or a specific product.
2. Improve overall performance
Equally important is your business’ internal performance and utilising data analytics to maximise time and employee skills are great decisions to improve this. Data analytics can help understand what areas an employee needs to improve, departments whose improvement could come from a reconfigured team, thereby ensuring better performance across the entire business.
Using data helps alleviate the need to go on a gut reaction or feeling, giving you the most evidence-based results for promoting an employee.
Internal costs can also be saved with data analytics, allowing you to make better decisions with your business’ supply chain. Allowing your IT department to run simulations on machinery and inventory ensures that internal budgeting is properly configured, leading to improvements in inventory management and technical logistics.
3. Conduct better risk assessment and management
Another key area that decision making can be aided by data analytics is risk assessment and management. Whether it’s structured (an existing database), or unstructured (social media or blog posts), cooperation with your IT department can improve the forecasting of potential issues. By using this data, you’re better able to improve your decisions in a crisis, eradicating a more reactive risk management style.
Banks are a key example of how their decision making has been affected by analytics; particularly when looking through the lens risk management. By combining structural data (client credit scores), and unstructured data (loyalty customer results), banks can better configure their credit risk models, with more accurate forecasted customer risk assessments.
Understand how you can change your decision making for the better
If you want to improve your decision making with data analytics, the University of New South Wales (UNSW) has the Master of Analytics degree available to study 100 percent online, meaning you can study without losing focus managing your business.
Covering a wide array of skills including an elective course on “Decision Making in Analytics”, this two-year Master of Analytics from UNSW can be a helpful tool for you and your business. With a strong understanding of data analytics, you can build your business’ performance now and into the future.