Every step in a business setting requires data in order to make the best decisions for growth, especially in terms of gaining a competitive advantage. Carl Anderson defines data-drivenness as “the development of tools and abilities.” “Most importantly, a data-driven culture.” Data-driven businesses have existed in advanced economies for over a decade. From Facebook to Walmart, business activities are carried out using data gathered from various sources. Tesco is one of the most well-known retailers in the world, and it has used data to gain market share. Casinos have also made marketing a science.
Data-driven companies, according to evidence, have an open attitude toward employee data use. Companies that fail to align with data-driven practices have a tendency to lose competitive advantage, market share, and revenue games. According to a recent PwC survey of business executives, 30% of companies are heavily data-driven, compared to 45% and 53% in the United States of America and China, respectively.
To make a company data-driven, the necessary data must be accessed, collected, and reported to the beneficiaries. These are the appropriate elements of the data value chain. However, the most difficult challenges for most businesses are how to extract data, refine it, and ensure its effective utilization. Despite the challenges, research has shown that many businesses are developing new business models based on extracting, refining, and ultimately capitalizing on data.
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This is necessary because models that predict and optimize business outcomes are critical to the long-term sustainability of values created and delivered to consumers. Aside from these, businesses must manage operations, communicate with customers, pay employees and suppliers, and plan for the future, among other things. Apple and Amazon are constantly leveraging big data to present relevant products and services to customers. According to a study conducted by the MIT Center for Digital Business, organizations that rely heavily on data-driven decision making have 4% higher productivity rates and 6% higher profits.
Data Enabled Business: Asking the Right Questions
To enable companies, create data enabled business, the Cambridge Service Alliance in its study came up with the six questions for the facilitation of big data use in today’s competitive business environment. The questions include what do we want to achieve by using big data? What is our desired offering? What data do we require and how are we going to acquire it? In what ways are we going to process and apply this data? How are we going to monetize it?
The answers to these questions, as well as their eventual application, are the responsibility of each employee. According to experts, everyone should be expected to collect, analyze, and learn from data on a regular basis. When employees generate data, it must be shared among them and used for strategic thinking, planning, and reporting in accordance with internal monitoring against goals and objectives for telling the company’s stories.
This phase of developing a data-driven culture is well-known in companies like Google, Apple, and Facebook. The core four strategies for new start-ups who want to use data to serve potential market opportunities include having much hands-on access to data as possible, setting measurable goals using the SMART technique, making data available to everyone, and hiring the right data scientists.