The Role of Data in Decision Making

Tell me if I am wrong but do you or your family own a business and the decision for the betterment for your business comes from your father’s gut feeling? Having provided with the data and evidence which proves otherwise yet we tend to go with our gut feeling?

As a fresh out adult living in a modern society with a technical degree I can see how nepalese society has adopted the method of decision making via intuition or the mass of people talking. There is nothing wrong with going with intuition but in contrast to the data that you are provided with which says that this has a high chance of getting unsuccessful, Would you still go with it? Just because your idea is unique, it necessarily doesn’t mean it will be successful in the market? If you invent a knife which is made up of wood rather than a metal steel, how much do you think this unique invention of yours is going to work?

Yes, There’s is a chance of your intuition getting absolutely precise results but to base your decision because You feel like it is going to work is an absolute waste of data driven generation. YOUR GUT FEELING IS THE BIGGEST BOOST TO YOU BUT WOULDN’T YOU RESEARCH AND COLLECT DATA TO JUSTIFY YOUR DECISION AFTER THAT?

Let me tell you how data-driven decision making can make your decision making more effective and better professional. Firstly let’s look closely at what exactly is data driven decision making?

The Role of Data in Decision Making

What exactly is Data Driven Decision Making?

Data Driven decision making is a basic process where you would use the data whilst you are in the decision making process and finally confirm the path of act.
If you own a company or are looking forward to work in one then let me tell you some ways that business might use as a data for decision making.

  1. Analyze the trend or shift in demographic data chart – usually done to calculate the business threat or new opportunities.
  2. The TEST market for new product or services – just to get a hunch of how the product will get in mass audience
  3. Survey responses- the easiest yet effective way to get directly to customer’s mind
  4. User testing prior full release- this helps to find possible issues of your product and understand the mentality of the customer to your product.

There might be many factors that will apply on how much the data can be taken as base to your decision making processes such as your goal, most importantly the quality of data you have access to, the type of data that you have access to and many more.

Advantages of Data Driven Decision Making

Rather than going with the gut feeling, one can easily tell how data can give you accuracy in decision making. There are numerous advantages of using quality data in decision making; in contrast there are absolutely null disadvantages of DDDM. Now coming to the point what sort of benefits can one get by using data as a key base to come to a decision.

  1. There is no doubt about your confidence in decision making when you back your decision with quality data as evidence.
  2. Your reaction to data for your organization becomes proactive. When the data shows you a picture for your organization it is more likely that you will react to it accordingly. It kinda works as an immediate alert notification to you.
  3. You know what will work as a miracle for you and your company, The operational efficiency. The amount of reduction in your company expense using big data can be a turning point to your organization. How about an example of Data Driven decision making?

Ducati- You know ducati don’t have motorcycles for the entire market, they decided not to make one for the entire market due to which they can specialize in high profit, amazing bikes which sell out every year. It’s very easy to understand what sort of data Ducati had and the research they have done prior to the release of the product.

Starbucks- The Coffee bar phenomenon was invented by them, yet in 2008 more than hundreds of starbucks locations were closed which got the attention of the CEO of starbucks and compelled the CEO to pinpoint ideal store location using data like demographics and traffic patterns.

Now Comes The Big Question! How will You turn yourself into a Data-Driven Person?

While data driven decision making looks very simple but believe me you will require some practice for you to get into it effectively. For that you will also use this practice in your personal life rather than just your professional life. Let’s say you have two ways to reach your university, one would be a ring road where you can watch all the circus of town on your way towards university and other would be a way that is more quiet but no traffic whatsoever. You are used to taking the main highway but what you have realized is how it takes 30 minutes less time to reach university if you avoid the ring road and take another way. Isn’t it the primary data you have collected year long that tells you that you can save half an hour and it’s more efficient for you to take the quiet way to your university? I presume you have been doing that already. Well Congratulations, you have already started to practice data driven decision making.

Yet there are some ways which you can analyse to practice Data driven decision making.

  1. You have to analyse the patterns, they are everywhere, Look for it
  2. Revisit your decision with the data and compare it
  3. Data science skills is never a bad option for you to undertake
  4. How about looking for data to every critical answer of yours.