The competitive world of entrepreneurs, companies and organizations have been changing rapidly over the years. With the advancement of science and technology, global marketers all over the world has also realized the true value of data. Indeed, the use of data science has been proven to have paved the way towards positive results within the company.
Unfortunately, only a happy minority has made these realizations. Majority of the companies around the world have not given data enough importance. What’s even worse is that major decisions are only made from gut-feel or opinions. They only make use of instinctive thinking. They have yet to realize that data-driven companies have an edge over them.
What is a data-driven company?
Alternative terms of “data-driven” such as “data-science driven”, “insight-driven” and “data-informed” all refer to an extent of savviness when it comes to data. For a data-driven culture to exist in a company, a company is said to make use of a form of scientific method as well.
According to Sham Mustafa, CEO of data science job marketplace Correlation One, a company can be considered data driven if these 3 things are applicable in the company’s culture:
- Everything can be measured
- Data reduces uncertainty and helps in coming up with better decisions.
- Data plays a crucial part in the major business strategies.
What are the advantages of a data-driven company?
Although good ideas come from gut-instincts when it comes to everyday life challenges, the need to make tactical and strategic decisions, however, call for a more data-driven approach. Today, gathered data have provided so many advantages in all aspects in the business world. Some of these main advantages are the following:
- Numbers do not lie. When decisions that will make or break a company have to be made, it is most important for these decisions to not be decided through the use of ego, personal interests and/or biased opinions. With companies that are data-driven, majority of the big decisions will depend on the data gathered and what the numbers speak.
- As companies deal with clients and customers, necessary changes to improve the business or the company’s performance and response to their target audience are based and anchored upon real time data.
- Data science encourages innovation within the business and in turn, it helps companies develop a more unique competitive advantage based from the gathered data. Strategic plans are attained more easily with the help of facts, evidences or in other words, data.
- Data-driven culture helps the company when it comes to financial efficiency and effectivity. Decisions based from evidence-driven data have lower probability of financial losses compared to decisions done out of opinions and pure gut feel. These types of decisions, in short, lean more towards failure.
That being said, research has, indeed, found that most top-performing and successful companies are actually data driven. A study in 2012 found that those who have rated their companies as data-driven have also rated their company’s financial performance as greater than those who belonged to non-data-driven organizations.