Why Big Companies need to build a Data Driven Culture?
Updated: Feb 12, 2021
Since the concept of large data centers became popular in the late 20th century, computing algorithms, computer infrastructure and hardware have also seen a major uplift and development. Data has been used to improve consumer experience and operational efficiency at workplaces across various industries for a long time now. That has led to the growth of use of analytics and data sciences for various business problems across the board.
In the last few years, most companies have taken to the growing trend of incorporating analytics in their business functions. However, a lot of these firms still lack a data driven culture which is important to survive the competition of the corporate world.
What exactly is the data-driven culture?
With data flowing in from multiple sources, almost every company has a huge source of data at their disposal. However, it is not necessary that large amounts of data corresponds to accurate and useful information. The data-driven culture represents a work atmosphere where everyone in the company uses data to make more informed decisions and has access to the right source of data for the same whenever required. Data driven companies use data to not only make better services and products for the customers but also generate data internally to monitor the pulse of their own organization.
Data-driven organizations do not just publish monthly or quarterly reports to circulate among the personnel. They ensure that every decision made for the people, company or the customers are backed by strong data points, observations made from historical data trends and predictions made on the basis of available information from the data gathered. Such firms have all the necessary technologies and platforms for gathering, storing, processing, analyzing and visualizing data as per the need. They have grown such capabilities to be independent in terms of their data needs and often provide such support to various other companies.
Why is a data driven culture necessary?
The surge of a data-driven culture in the corporate world has seen a significant impact on how organizations are structured. As one knows very well, the data gathered by different companies is complex and noisy, this calls for a lot of knowledge and experience to get accurate information out of the data pool. Most data driven companies merge different department to harness their individual strengths to make the most of data. Before the data-driven culture took over, the IT departments sifted through huge piles of unstructured data.
Now, creating an ecosystem based on data would require an organization to create an interdependent network of multiple departments. This promises not just a well-oiled machinery but also a higher possibility of people having access to all necessary data in a more efficient and a faster way.
This promises a better business efficiency and effectiveness. If the internal operations of a company are seamless, the organization can make better decisions for the customers. With the technologies advancing at an unprecedented pace, a data-backed culture would ensure the companies adopt the latest technologies, equip the workers with the necessary skill set and place themselves at the forefront of technological race in the market.
Data can help firms define a clear strategy involving success measures and key performance indicators (KPIs) that give real-time feedback about any decision. Data literacy is another advantage of creating a data-driven work culture. People will not only know more about statistical tests or mathematical algorithms but will also be able to monitor their activities and observe how their decisions are affecting the company, industry or the market.
A salesforce report published in 2015 placed better operational efficiency and company growth as the biggest advantages of incorporating data in the regular operations. However, there is a long list of other benefits of doing so too:
Optimize existing operational processes.
Improve existing products and services based on customer and market needs.
Identify new revenue streams in terms of products, services or organizational decisions.
Driving innovation and generating new ideas.
Monitor customer loyalty and predict their behavior.
Improve employee relations and operations.
How to build a data driven culture for your company?
Multinationals like GE have already started incorporating data in their day-to-day operations.
The manufacturing giant has identified the scope of using data for customer satisfaction. They are shifting towards intelligent electrical consumer goods that are software-driven and are connected to a network that uses data to monitor the device performance, diagnose and report problems if necessary and raise automatic notifications for services when needed. Furthermore they are using data to get immediate customer feedback on their innovation and development ideas. This
data-driven decision making helps the company make their operations smoother and connect
the bandwagon of turning into a data-conscious organization.
To inculcate the data-backed culture into a firms’ daily machinery requires democratization of data. What that means is that data needs to be available to all departments according to the privileges, privacy considerations and security constraints of the firm. It then becomes necessary
to ensure that the personnel is well aware of the data access and how to monitor the vital KPIs and metrics that they are being evaluated on. They should also be trained on how to use the data to provide better services to the necessary stakeholders. Training sessions should be designed in a matter that builds skills around technology (example: basic analytical tools like Microsoft Excel or R, and visualization tools like Tableau or QlikView), basic mathematical tools (example: Measures of error, accuracy and deviation, correlation and some basic distributions and statistical tests) and business acumen to understand the dynamics of the industry and the market. This would help the firm build its ‘Business Intelligence’.
However, to strengthen the same, regular and active feedback loops need to be put in place. Muscles like customer feedback, employee feedback, web and social-media analytics, and IoT and sensor data are some ways to collect feedback and record the necessary data in a structured way. Furthermore, it will be necessary to build a work culture where people or departments do not work in silos and are well connected for all information and resources needed. Although a centralized data system is necessary for a data-driven culture, the success of the same can only be ensured by securing the data sources. Firms need to build a secure database where the scope of malpractice, data theft and illegal manipulation is negligible.
Last but not the least, a data-driven company depends on its personnel to grow and flourish. Hence, such firms need to be in direct conversation with all their employees, should invest in their development and should have the infrastructure to record and store data from all possible sources available at their disposal.
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