How to Become a Data-Driven Company
Driving your business into the future requires a cultural change. Becoming a data-driven organization takes time and a companywide commitment to infuse analytics into all operations, but the hard work can pay off.
By Ulrik Pedersen
Since when did pulling data from a single Excel spreadsheet equate to business intelligence (BI)? Today's advancements in BI allow us to do things like speak in natural language into a smartphone and watch analyses come to life in real-time. Enterprises have never had a better opportunity than now to fully capitalize on these advancements and move towards operating as a data-driven company.
Becoming a data-driven company ushers enterprises into the future and helps them make the jump from performing outdated, unsophisticated spreadsheet "analysis" to truly harnessing business intelligence capabilities to make a measurable, positive impact on the greater business. Here's how.
Becoming a truly data-driven organization can be broken into three components: understanding the health of your business, experiencing operational excellence and lastly, shaping competitive strategies by analyzing both internal and external-facing data.
But of course, there is one caveat: finding success with being a data-driven business is also one of a cultural transformation. This is because data-informed analytics help shape bigger strategic decisions as well as operational processes. Data and analytics must touch nearly all aspects of the business.
In fact, business intelligence and analytics should become tools used by employees across the company, with both management and staff embracing the changes that data-driven insights enable in order to gain competitive advantage.
Making the cultural switch is not a simple or quick process, but putting business intelligence in the hands of every decision maker aligns company goals and ensures everyone is on the same page with the most updated information. This way, there are no "different versions of the truth" floating around in disparate spreadsheets, and every user has a consistent experience across platforms.
Once your organization is prepared for this update, here's how to approach the three key components of becoming a data-driven organization:
Understand the Health of Your Business
At the beginning of this stage, analytics are often held within the realm of a few "super users" in IT or finance. As the organization becomes more mature in business intelligence and analytics, standard reports give way to specialized reports. Then, a cycle of greater insights leading to better questions and answers begins. In order to get here, you must:
- Build a data warehouse
- Connect the most critical data sources
- Share data through dashboards, analyses, mobile business intelligence, storyboards, and reports
Experience Operational Excellence
As data volume, variety, and velocity increase, so does the organization's ability to make use of it. Analytics, resources, and skills are no longer limited to a few departments, and everyone from sales to marketing and supply chain is leveraging the benefits. Users become smarter about the entire value chain. This is the step where the cultural shift is especially crucial. To complete this:
- Set the data free to everyone - decision makers, vendors, and suppliers
- Connect all data sources to provide analytics for all departments
- Allow everyone to build their own analyses to gain insight specific to individual situations
- Monitor data using alerts and predictions
- Perform data discovery on ad hoc data sets outside data warehouse
Most important of all, foster a culture that allows decentralized decisions to be made and actions to be taken.
Shape Competitive Strategies by Analyzing Internal and External Data
Companies operating at this level of maturity use data disruptively. They employ the most highly skilled analytics resources they can find – and they often can't find enough of them. This is when ad-hoc analytics with external and big data sources come into play.
Today, BI users have tools at their fingertips to tap into the power of external data sources such as Microsoft Azure DataMarket, OData feeds, Quandl, Global Weather data, Google Trends, Twitter feeds, and much more to analyze big, external data against their own internal company data. With so much data available, it won't be long before a company's external data far exceeds its internal data.
- Look outside the organization to make sure your results are not pulling from narrow data
- Continuously analyze this external data to see how it matches up with your internal findings
- Extend your value chain to learn what's going on before and after you meet customers
Clearly, making the cultural change of becoming a data-driven organization takes time and a company-wide commitment to infuse analytics into all operations. But, the hard work pays off. Becoming a data-driven, strategic organization empowered to make informed decisions faster and more confidently than ever before is no longer an option -- staying competitive in today's world requires enterprises to be data-driven.
Ulrik Pedersen, chief operations officer, joined the TARGIT team as project manager in 1999. Since then, he's taken on the challenge of penetrating the North American market with TARGIT's business intelligence and analytics solution. You can reach him at [email protected].