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Companies today are collecting data more than ever. What do you do with this data? Do you let it degrade and become irrelevant or do you use it for business growth?
Companies that make use of data to drive decisions gain a competitive advantage, increase profits and reduce business expenditure. But how do they do this?
In this article, you will learn about data-driven organization examples that will give you insight into how companies have leveraged data to make smarter, effective business decisions.
It is not enough to collect data. Great business leaders utilize this data to make decisions.
Assume that a jeans manufacturing company uses materials made in China. If tariffs are imposed on these materials, the cost of the jeans will rise. Understanding the data and how the business is going to be affected in terms of profit margins is imperative in developing a strategy that will keep the company from losses.
The business owner might decide to source materials elsewhere, which might save him from the tariffs and the unstable international political situation. He might decide to push the increased cost to the consumer by raising the price of the final product.
At the beginning of this challenge, the company could decide not to react and bear the costs because the profit margin is still enough to make the business profitable. This strategy could reduce the profit-per-sale but it will create a demand for the products since competitors will probably raise their prices. Because of the competitive advantage, the business might end up making the same profits before the tariffs.
Data should be at the center of almost all business decisions. Whether you are aware or not, you have used data to make decisions in the profession you are in.
Human resource managers gather data from different sources to determine the best candidates to hire. Marketing departments look into market segmentation data to identify target consumers and to speed up the sales process. Business executives are also part of data-driven organization examples because they too utilize data in decision making. How do they do this? By analyzing business trends in the market in shipping, prices, and manufacturing.
Most organizations have researchers and data analysis departments tasked with collecting data. Unfortunately, this data sits on databases never to be used. You can, however, change that by paying attention to data and incorporating it into your business growth strategy.
You have a company that wants to make a new skincare line for women. You need to have some key factors to design an effective marketing campaign. Even though the product is designed for all women, do you brand it for a younger audience to capture that niche?
Or is it more strategic to target older women who are more focused on maintaining a youthful look? You consider having labels for each group. A higher price point is unreasonable for the younger women, but will be perfect for the older ones.
However, these claims must be backed by research for informed decisions to be made. You, therefore, need to find data from a competitor company addressing the cost of products sold, with the ultimate product pricing and the potential customers.
This will lead you to design an entire packaging around the larger target audience, even if the rest may buy it.
Business decisions as you can see are not about gut feelings but should be centered around data.
Data-driven decision-making (DDDM) is the process of collecting data, analyzing patterns and facts from it, and utilizing the information gathered to develop strategies that address these insights. Generally, it means taking advantage of accurate, verified data rather than shooting in the dark.
Data-driven organization examples are not just about companies creating strategies because data says. It involves instances where companies collect, extract, format, and analyze data against the company’s goals and KPIs.
Companies that incorporate DDDM have proven to be more successful. According to a study, marketers that employed data-driven decision-making delivered 5 to 8 times of their marketing ROI. The study found that those who exceeded their revenue goals were incorporating DDDM most of the time.
Now that we have explored the meaning of data-driven decision-making in business, it’s time to find out why DDDM is so important.
The importance of using data in decision-making lies in consistency and continual growth.
DDDM enables companies to generate more profit, create new business opportunities, optimize current operations, and predict future trends. That is how you can grow your business over time and make your organization more adaptable.
One area that is in a constant state of flux is the digital world. To be on top of things you must leverage data and make powerful decisions. However, be very careful when making these decisions. DDDM can make or break a company. That is why data visualization is very important.
Having a visual summary of the information you are presenting is so important.
Data analysts can pull insights from spreadsheets of data but that is a small number of users.
Since you want everyone to understand, having data visualized is very important.
Charts and graphs make communicating data a less complicated process.
Companies that approach decision-making as an important part when drafting strategies treat information as a real asset more than companies that use a more ambiguous approach.
Understanding how you can manipulate data brings with it insights that are significant at every business level. Here are the benefits of being a data-driven organization:
Companies that were early adopters of the data revolutions experienced long-term effects on their businesses. The advantage of using data visualization is that anyone can derive meaning and insight from it. This enables employees to understand the current situation of the company and give their input on the best way forward.
More organizations are adopting data analysis to find areas of improvement. Companies have used data to understand the stop-gaps and find new and better ways to achieve operational efficiency.
When you hear the statement “data is the new oil” what comes to mind? You probably wonder how data can be compared to oil, which has been a huge cash-cow for decades. Visualizing data enables organizations to accurately predict future trends which helps them gain a competitive advantage resulting in better revenue. You can also use the data in identifying other business opportunities to increase revenue sources.
A company created a website to capture the online market. They hired an SEO person and created a PPC campaign to generate both organic and paid traffic. Six months later, they did a review to determine which performed better. They gathered the data and hired an analyst to visualize the data.
From the chart, the total traffic was 10.28 million. Organic traffic was 4.26 million and paid traffic was 6.02 million. That company concluded that both departments are doing great jobs.
Companies that are not using a data-driven approach are considered old school. This is among the reasons why some companies do not embrace a data-driven approach. Other reasons include:
They do not know how to gather data – Which is a challenge with many companies, especially in SMB. If you are not interested in data you will not hire a data analyst. Many companies are data illiterate for this reason.
They do not know how to use this data – Many companies have a monthly, quarterly, yearly data-based analysis of their performance. Unfortunately, that is where they stop. Data is stored in databases and with time becomes obsolete until the next analysis. Data collection should not be done to tick a box. If the data is not used then what is the point of collecting it?
They do not know the tools to use – Data collection and analyzing tools are available but some companies have no know-how of where to find such resources. They, therefore, miss out on the opportunity to use data to make key business decisions.
If you were faced with a big decision would you prefer to reference data in its original form or when summarized in a chart?
Imagine you work in a huge company whose annual budget is 100 million dollars. Referring to a spreadsheet with this kind of data would be a nightmare right? It has been proven that you can turn even the most complex metrics into actionable insights that can drive decisions and visualization is at the center of making this possible.
Think about it: If you were looking for a needle in a haystack, would you turn every single piece of straw?
The same can be said for data visualization. Not every piece of data you come across will have significance to your organization.
Visualization helps you summarize and cleanup loads of information for better focus on the critical issues at hand.
Once you have the data you would like to use, incorporate a visualization tool like ChartExpo to help you correct errors and represent the data in a simple, concise way.
This tool helps you to detect relationships in the data and merge them into functional columns. When you handle data this way, by finding trends, patterns, and grouping by similarity, you can easily identify outliers that are of no use.
The next step is to present the data intuitively and visually. From these visuals, you can derive summary insights that you can present to stakeholders.
So, how does this assist in data decision-making? Well, have you heard of analysis paralysis? It is a state of being overwhelmed when trying to make a sound decision when faced with many possibilities. This can leave even the most astute leader second-guessing their final word. On the flip side, if you are faced with only 10 or fewer choices, you have a higher level of confidence.
Research has found that managers who utilize data visualization in decision-making are 28% more likely to find relevant, critical insights than those who rely on the traditional methods of recording and reporting data.
Some years ago business leaders made decisions blindly and hoped it was the best choice for the company.
Luckily, today you do not have to gamble with your company’s future. Thanks to ChartExpo data visualization, you can see projections of prospects, and potential outcomes ahead of time.
Consider a chart like the Sankey Chart. This is an interactive visualization that allows users to view each department and determine which one used the largest chunk of the budget set by the company.
With this type of visualization, you receive an in-depth look at every aspect of the budget. There are also separate visualizations that help you predict what the future will hold if certain scenarios occur.
While this is an isolated example, you can perform similar data testing and manipulation techniques in the office. How will the tables or charts automatically adjust if you move an employee from one department to the next? Do you have enough money built into the budget to purchase “X”?
This kind of functionality helps leaders avoid some of the common pitfalls and risks associated with uncertainty. In addition, knowing historical results and the tentative future of your hard work helps you set stronger, more precise benchmarks and Key Performance Indicator (KPI) targets. If hard data reveals a favorable forecast, it’s easier to press ahead.
One of the most common decisions leaders in the business world face, is where to spend the budget and how to utilize talent.
Should you put more money into advertising, or in improving the products? What about investing in professional development? With these kinds of decisions awaiting you, visual data helps you quickly scan and see which parts of the company need the most attention. From there you can make smart financial decisions that will focus on strengthening fledgling programs while allowing successful ones to thrive.
Dumping your data in spreadsheets or plain text can leave you confused on the next course of action. Conversely, data visualization allows you to see where you need to put more effort.
For example, you can create a chart that visually depicts the sales statistics of the top 10 products in your inventory over the last quarter. In seconds, you’re aware of which items soared and which are falling behind.
One major appeal that data visualization has is usability. These are not volumes of text laden with industry jargon. Instead, they are simple and easy to understand.
This encourages decision-makers to take up an active role in analyzing the data no matter the department.
The sales department lead may want to see what is affecting repeat purchases, and marketers may want to see a forecast of the upcoming campaign. This information can be projected from the visual charts for everyone to see. This creates trust and collective responsibility in every department in the company by openly showing progress and creating a space for open discussion.
If you are in business it is unlikely to work in isolation. Even if you are a solopreneur, you have suppliers, distributors that help in the running of your business. You, therefore, need to have clear communication with each other before making certain important decisions. Doing so requires you to demonstrate their role in the bigger picture.
Data visualization can help you show the relationship between different business operators, and how they work in tandem. Department heads can have a look at the business operations and how they contribute.
For instance, you could address questions like, should we invest in this new Customer Relationship Management (CRM) software platform? Everyone who directly interacts with the system will need to understand how the new option will affect the way they work.
A better way to represent this would be through a line graph. It will demonstrate the growth of different departments currently using a different color to track projected growth post-CRM implementation. This visualization will show the correlation between departments.
In the meeting, you can have an open and clear dialogue around the decision, weighing inputs and opinions from employees across the enterprise.
In some cases, you have days, even weeks to think about a business decision, other times you have a few minutes. In either case, you do not have the time or energy to work through clunky, manual data.
Visualization compresses information to only what you need to know in a consolidated, simplified format. Sure, no one is stopping you from reading a database line by line or scroll through pages of text.
To understand data visualization, you will find that decisions come more easily and effortlessly than before.
Let’s take another example. A stakeholder wanted to see how their PPC campaigns are doing. So, he asked his agency to show the performance of PPC campaigns.
The agency knows that throwing a bunch of numbers at him might confuse him. Instead of showing them the numbers on a spreadsheet, they decide to represent the performance in a visualization chart. They gather the data and make a visualization of it.
The chart gave a clear picture of everything. Which gender, device, age group, and which campaign favored the product.
Many tools allow you to create charts that look very professional.
It is, however, wise to consider that they offer variety in the types of charts you can create.
ChartExpo has a wide range of options for different facets of data. The beauty is that you can install it on Google Sheets and Excel making it possible to work on your preferred platform.
ChartExpo has output options including multiple charts and mapping formats. The chart maker helps you create line graphs, bar graphs, pie charts, scatter plots, Sankey Chart, and many more charts. The ChartExpo data widgets offer you perfect visualizing map data, tables, and percentages.
To get your data visualized, you may outsource to a data analyst with knowledge of coding. This will cost you a lot of money and time as well. The disadvantage is that s/he has different clients, so s/he might not make the charts on time.
If you decide to learn on your own, it is time-consuming and exhausting. You would preferably use this time to develop strategies to grow your business. ChartExpo helps you save time by helping you create a chart in seconds. With a few clicks, you get your insights in front of you.
The modern business marketplace is driven by data. Knowledge is power, and it is especially when it comes to the performance of the company. In this article, we have looked at data-driven organization examples and the role data plays in organizations to empower leaders in making wise decisions based on facts and statistics.
However, you cannot make decisions without understanding the data. That is where data visualization comes in. ChartExpo is one tool that gives you a variety of charts that help you understand data from a visual point. Digging and gleaning insights is cool but managing to tell a story from the discoveries is much better.
With ChartExpo, you do not need to hire a data analyst who will cost you more money. This tool will help you create visualization within seconds, and with that, you can make transformative business decisions.
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