Why Do Companies Struggle to Make Data-Driven Decisions?

Why Do Companies Struggle to Make Data-Driven Decisions? 

by | May 23, 2017 | Big Data

When it comes to gaining a competitive advantage, data analytics is crucial. It can steer your business in the right direction, helping to understand your customers, find new ones, and develop your products and services. So why is it that so many businesses that conduct their own data analytics struggle to make more effective and intelligent data-driven decisions?

The Importance of Data Quality and Data Collection in Making Data-Driven Decisions

Data analytics begins with collecting the data in the first place and surprisingly many companies unwittingly stumble at this first, crucial hurdle. If the data is of low quality, contains missing values, errors and inconsistencies, then any subsequent analysis will, of course, be useless. Furthermore, if the data is incorrect and everyone remains none the wiser, then any business insight gained and decisions prompted by the analysis are likely to be ineffective, or at worst detrimental to the company.

Some of the causes of poor quality data include a lack of discipline in capturing and storing data as well as faulty processes. In particular, the quality of the data may be compromised when entering the system at origin, either by someone manually entering data incorrectly or by incorrect data coming from a third party company. Moreover, the data may have entered the system correctly, but the integrity of the information may not have been maintained during processing.

Investment in Technology

Currently, many organisations fail to implement a modern, coherent, and readily accessible system in which to collect and store their data. Out-dated legacy systems are still commonplace, and they often hinder the ability to access and transfer data because they don’t always communicate with other software. Moreover, the data structures behind these legacy systems are not always fit for purpose as they were previously. As a result of the development of the business, these systems have often had to be modified and extended over time in order to keep up with business needs. At best these changes align to good design; at worst they result in systems becoming far too complex. To further complicate matters, there is often a lack of documentation and the individuals who best understand these systems are more than likely no longer with the company. Consequently, the data is much more difficult to analyse.

It takes an experienced data specialist to address such issues, clean and organise data and prove its accuracy. This requires knowledge of the business, an understanding of a variety of IT systems and applications, as well as technical data expertise. In most cases, the greatest amount of effort is placed at this stage of the process.

In-House Data Analytics

When it comes to in-house data analytics, a common problem is the executive’s understanding of data. They may know how to manage the business like the back of their hand, but for many business managers, data analytics can be unfamiliar territory. More often then not, data is left to the IT department to deal with. However, your typical IT department tend not to have properly trained and experienced data analytics specialists. To account for this gap in skillset, companies typically hire a data analytics expert, or even several, to bring in the skills and methodologies to help achieve the desired goals.

The Way Forward to More Effective Data-Driven Decisions

Data analytics presents opportunities for companies of all sizes to improve their business through more informed data-driven decisions. However, many struggle with turning data into something they can take action upon.

Keeping up to date with today’s technology is imperative – not only because it is smarter and more effective, but because modern technology is more flexible and efficient too. However, if data isn’t collected properly, shared and integrated easily, or is not meticulously organised, then any analysis has to overcome these hurdles first before any meaningful insight can be gained.

Unleashing the power of an organisation’s data requires the right tools and expertise to integrate data sources that are available throughout an organisation, prepare the data and then analyse it. After all, better decisions start with better data. In particular, companies that want to make the most out of their own data need to focus on the following:

  • Implementing better systems for storing, integrating, viewing and analysing data
  • Making the data easily accessible to all relevant employees
  • Having the data analysed by those who are data literate – at an expert level
  • Understanding what those findings mean for the business

Carrying out in-house data analytics is not always a cost effective solution – especially when you’re the head of a company and data-driven decision-making is not your forte. While some companies spend money on ineffective in-house data analytics, others invest in tried and tested data analytic companies to handle their data instead. This is a wise move. Employing experts in data ensures companies are able to make more informed decisions with confidence. This in turn can make a significant difference to a company’s growth and success.

by | May 23, 2017 | Big Data

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