BusinessDay: Data-driven culture is vital to companies’ success
Establishing a data-driven culture is challenging for many firms because data is rarely used as the primary foundation for making decisions.
By Johan Steyn, 30 August 2022
Published by BusinessDay: https://www.businesslive.co.za/bd/opinion/columnists/2022-08-30-johan-steyn-data-driven-culture-is-vital-to-companies-success/
In recent years companies have been paying increasingly large sums for data analytical talent and investing in new technology platforms to improve customer satisfaction, streamline their processes, and obtain strategic insights. The abundance of available data has ushered in an era of fact-based innovation and foresight.
Regardless of size or industry, all businesses have the potential to become data-driven, which is crucial as it can provide them with expansion-fuelling insights. To find new sources of exploitable value within a company and to develop the future potential for value creation, many forward-thinking businesses have been turning to big data analystics, enabling them to efficiently grow, optimise, and safeguard value.
According to a study by Forrester Consulting, organisations that rely on data management tools to make decisions are 58% more likely to exceed their sales goals than companies that are not data-driven. Firms with a solid data strategy at their core are 162% more likely than their counterparts to significantly exceed revenue goals.
Becoming a data-driven organisation is fraught with obstacles. Legacy technology platforms were not built to handle the processing of big data sets, and the proliferation of available data sources makes it difficult to extract essential information. Company and customer data is frequently concealed in isolated data islands, and qualified data professionals are difficult to recruit due to high demand.
Without a well-thought-out data strategy, however, an organisation risks falling short of its business objectives, which, in turn, can lead to inaccurate predictions and decision-making across all departments.
The lack of company-wide buy-in empowered organisational structures, and cutting-edge technology for data self-service are common challenges. The mindset adjustment required to develop a data-driven culture is something that can be done by any company, for the benefit of its management, staff and customers.
Establishing a data-driven culture is challenging for many organisations because data is rarely used as the primary foundation for making decisions. Making data and analytics central to your business's strategy, culture, processes, and at all organisational levels is imperative. It is more important than installing the appropriate applications and tools, hiring a dedicated team of data professionals, committing to a significant investment in data infrastructure, or implementing a one-time data literacy programme.
The first step is to develop a data-driven strategy. It’s pointless if you can’t make sense of your data. All of your customers’ information, including their proclivity to churn and their ever-changing requirements, can be found in the data.
The next step is to create a success metric for your clientele. To increase customer success, the best strategy is to incorporate a data-driven decision-making process into your current procedures.
Data-driven decision-making is critical in management and implementing relevant methods can help you improve your overall management team’s success. Employee satisfaction, the actual versus the expected cost of initiatives, and the return on investment for each project or campaign will all help your company improve its efficiency and financial returns.
As Peter Drucker once famously said, culture eats strategy for breakfast. This applies to your data strategy and investments. A data culture should be driven from the top, enabling all employees to function successfully. It is never just about technology. It is about human nature and our often inhibiting fear of change.
• Steyn is on the faculty at Woxsen University, a research fellow with Stellenbosch University and the founder of AIforBusiness.net