What Does Data-Driven Decision-Making Really Mean?

We’re operating in a new world.

If you’re a business owner or leader, keeping your business agile—no matter the state of the economy—requires you to anticipate problems and take action in real time. To do this, your company must use data to drive strategy and make decisions throughout its business units.

Data-driven decision-making entails using facts, metrics, and data to make strategic business decisions that align with your company’s goals, objectives, and initiatives. It empowers your employees to make informed decisions every day.

In a nutshell: if you can look around your organization and see teams making decisions effortlessly because they are using data, you’ve realized your data’s full value.

The Benefits Of Using Data To Inform Decisions

There are a variety of benefits associated with taking a more data-driven approach to decision-making. For example, it:

1. Establishes a common language across teams.

When everyone in your organization can “speak data,” people from different departments can share insights with each other.

And when different teams in your business have access to the same real-time data (at appropriate levels of security depending on what they need to know to do their jobs, of course), they will be working from a single source of truth.

2. Breaks down silos.

Removing silos from different parts of your business processes will help you create a customized, personalized end-to-end experience for your customers.

3. Increases collaboration among teams.

The data you’re seeing is often the same data that someone else is looking at from a different perspective. When your data is linkable and discoverable, people from different areas of your business can turn their insights into data-driven actions. Shared information leads to new opportunities and true transformation.

4. Fuels curiosity and new business solutions.

Your employees can move faster by tapping into what their colleagues are doing and gaining new insights that wouldn’t be possible if that data wasn’t discoverable.

5. Drives cost savings.

It costs money to process and store data manually multiple times, because when data is not automated, multiple teams spend personal time analyzing and using the same data sets.

Harnessing Data Across Different Parts Of Your Business

Different parts of your business—for example, HR and finance departments—have different challenges when it comes to using data. Take HR and finance departments, for example.

HR departments

People are your company’s biggest expense—and its greatest asset. HR teams need visibility into hiring, attrition, turnover, diversity, and more. And like many other business units, HR personnel are often working under tight deadlines with multiple projects.

A trusted analytics partner like Tableau can provide best-in-class analytics for understanding employee experience, engagement, and development. With easy-to-understand dashboards, HR teams can gain a holistic view of their data, consolidating data from other tools and sources into one place.

Here are some other benefits:

1. Automation means no more manual calculations in spreadsheets.
2. Your HR leaders will gain the ability to quickly spot talent trends and outliers across data sets.
3. The use of intuitive AI will enable HR professionals to make important personnel predictions, like who is most likely to leave the company this year, and help them implement proactive strategies to mitigate attrition.

By using data to drive decision-making, HR leaders can unlock insights connecting people to business outcomes. Leaders can answer questions like, “How much is head count growing? Is my company meeting its hiring goals? Am I promoting from within or making external hires for leaders? How is attrition shifting?”

Furthermore, promoting data literacy throughout your company can lead to more engagement and collaboration from employees, helping with attrition rates. A study by Forrester Consulting commissioned by Tableau revealed that nearly 80% of the employees they surveyed said they were more likely to stay at a company that sufficiently trains for the data skills they need.¹

Finance departments

For your business strategy to be sound, you need insight into your company’s current and forecasted financial health. Volatility and uncertainty mean businesses must be able to pivot quickly—which can create new accounting and budget challenges.

By using an analytics partner like Tableau, financial analysts and business users can save time and boost efficiency when analyzing their data. Even if they have scattered data, they can uncover insights. With Tableau, they can combine data from different sources, compare actual T&E costs against the budgeted amount allocated for these expenses, and understand major drivers of spending. They can also use data to make enterprise-wide decisions such as travel freezes.

Automation means busy analysts can save time. They can scale and automate recurring analysis for faster decision-making and eliminate manual calculations in spreadsheets. They can also find answers faster with self-service analytics, ensuring financial trust and auditability.

Furthermore, sensitive data can be kept secure and available only to the people who need access, and previously siloed teams and regions can collaborate by having access to shared data.

The Challenges Ahead

All the above said, technologies to help companies better use their data can be easy to acquire and implement. The harder reality is that shifting to a data-driven decision-making framework requires more than technologies.

Here are some challenges I often hear from other business leaders —and what can be done to overcome these roadblocks.

1. People, process, funding, and prioritization all pose challenges.

Many data teams are considered operational; they’re essentially buried beneath the business strategy aspects. They aren’t properly funded to support data operations and new strategic insights to keep up with the business. This makes it difficult to acquire real-time, action-oriented insights.

And sometimes, other internal initiatives take priority. Whether it’s at the team, department, or enterprise-level, data analysis and resources often get moved down the list in favor of other, short-term efforts deemed more important.

2. Focusing too much on the technology and not enough on the actual data itself.

Digital migration and data transformation are both important activities as you get further in your data journey, whether you’re trying to grow a business, drive new engagements with customers, or increase operational effectiveness.

You can implement the best technology in the world, but if your data is poor quality, neither linkable nor discoverable, or if you’re not collecting the right data to answer questions that are relevant to your business strategy, you’re not going to get the maximum value of your technology investments. 

3. Neglecting to educate your workforce about data ethics.

Data analysis is still considered a job of the few, with only select teams owning and using data to drive the rest of the business. But everyone who works with data should understand data ethics. Without proper training, situations can arise where there is duplicated information, no known right source of truth, or quality concerns. Or perhaps data is not being handled ethically due to a lack of awareness of how to do so.

To get ahead of these challenges, leaders and managers should model the behaviors they want to see by framing challenges with hypotheses, demonstrating how tactics connect to strategy, and reinforcing the view that data and technology proficiency are critical to bottom line and career impact. Leaders must also invest in data skills, policy, ethics, and data management to ensure they’re handling data appropriately. They should encourage the development of a pervasive data culture and promote data literacy throughout their workforce so people can effectively read, work with, analyze, and communicate with data. Finally, to provide the most value for your business strategy, data must also be discoverable and linkable.

An Approach Worth Implementing

“Data-driven decision-making” is more than a buzzword—it’s an approach worth implementing if you want to stay agile in a constantly changing market.

When you empower your employees with data to drive decisions with data, you can transform the employee experience, drive intelligent business operations, and create seamless customer experiences. You can also demonstrate and communicate team value and successes; rally around clear, common goals; foster synergy across teams and business units; and better collaborate and align with other business leaders.