As technology-based industries continue to grow in maturity, products and services have become increasingly consolidated. This results in extremely high levels of competition and saturation, putting executives under constant pressure to make the right business decisions and maintain a competitive advantage.
While this can be achieved through data-driven decision making, business leaders often rely on unreliable data, making decisions no more reliable than a hunch. Here is why business leaders need reliable data to make important decisions.
Businesses constantly generate data but it is often stored in an unstructured way. This makes it extremely difficult for business leaders to derive useful insight from company information they already have.
However, the impact of using this data to make decisions is unquestionable. Recent research has revealed that over 50% of business leaders report more than 4 data quality issues. When business leaders organize operational data so it provides real insight, they can make more informed decisions about everything from product lines, operational processes, and future business investments. Here is how business leaders can make operational data reliable and ready to use for decision making.
What is data reliability?
Before business leaders can explore the software solutions and data management systems that can help them improve data reliability, they must understand what data reliability is. Data reliability can be broken down into three components; validity, completeness, and uniqueness. Until business leaders have evaluated and resolved issues within each of these components, data reliability cannot be achieved.
The first step in ensuring that your data is reliable is making sure it’s stored in the correct format and in the right place. For modern systems to aggregate data and extract valuable insight, data points must be stored in the same format regardless of which business department is recording it.
Data leaders within businesses must set standards for the rest of the company to follow. International organizations, for example, might want to standardize the currency that they use to analyze spending. This principle applies to all information that businesses collect, store, and analyze.
When making decisions, business leaders often rely on multiple related details, so the data sets needed for decision making must be complete. While most businesses have some processes in place to collect and store information, not all data is handled the same way. However, data management systems often require a wide range of complete data sets to extract actionable insight. Businesses that keep a comprehensive data set can expect higher levels of data reliability and consequently, make better business decisions based on accurate data.
The final component of data reliability is uniqueness—data points within the data set can not be repeated in multiple locations. When business silos separate data processes but pull information from the same information source, data points can be duplicated. This skews any insight business leaders may derive from the completed data set.
Businesses need to ensure that each piece of information is unique and that there are no unnecessary repetitions that could mislead decision makers who interpret that data.
To ensure that data sets used for decision-making are complete and accurate, it must be easy for all stakeholders within the company to share and communicate important information. Business silos have been a thorn in the side of many businesses over the past couple of decades.
Digital transformation has made it possible for companies to close this gap by collating information in a single source of truth. It is important that every member of the company can easily add information to that repository. This ensures that the data used to make decisions is complete and pulls from all sources across the organization.
Data-based decision making is not limited to top-level business leaders. Industry laggards have been revealed to be over 10 times less likely to support frontline decision-making. Ensuring that every member of the business has access to business insight and data analytics can form the foundation for this type of decision making.
There are more benefits of democratizing data analytics. When there are more eyes on a data set, mistakes and discrepancies are more likely to be found and get called out in time to resolve issues.
Business leaders can build various data processes and introduce simple systems for employees to contribute to them. However, these processes are effective only when each member of an organization engages regularly.
This is why business leaders should make it a key priority to create a company culture that encourages data-based decision making. This requires businesses to explain the benefits of data sharing within their organization and ensure that employees have the right tools to contribute to company-wide data processes.
Reliable data is the basis for business leaders to make informed business decisions. Once businesses collect the appropriate data, they must organize and structure this information in a useful manner. A data-centric corporate culture takes this even further by empowering employees and employers to make informed decisions at every level of the organization.
