5 Ways to Making Better Data Driven Decisions

Chris Ganje, CEO and founder of business intelligence firm AMPLYFI, looks at how leaders can gather and use the data that is critical to charting turbulent waters ahead.

Data, in some respects, has been on the back foot in recent years. Landmark events such as the UK’s EU Referendum or the US Presidential election have caused chaos for economic projections, whilst the introduction of new technologies and platforms have transformed the way that both industries and consumers behave. For CEOs, the rapid pace of change in today’s world is making it harder than ever to make quick, informed decisions.

Business leaders may be forgiven for reverting to their gut instincts at a time when, having as much data to hand as possible, to drive strategic decision-making, has never been more important.

Business leaders may be forgiven for reverting to their gut instincts at a time when, having as much data to hand as possible, to drive strategic decision-making, has never been more important.

Here are five ways for CEOs to ensure that they are making the most of the data available to enable better decisions:

1. Have the right information

Big Data has presented a challenge to many businesses, in part, because leaders have not known where to start in analysing it. Research published in 2016 in the International Journal of Advanced Computer Science highlighted the challenges with managing the volume of data and how it is used. Today, as big data continues to get bigger, the focus on the issue of scaling – compared to just a couple of years ago – has come into even sharper focus.

To overcome this, CEOs must first assess all of the sources available. These can be internal (financials, customer data, etc.) or external (research, business intelligence, consultancies). Next, they must then understand the data actually required: for example, if they are considering an acquisition, what must they understand from their own business, their prospective acquisition, and the wider cultural or political environment that will inform their decision?

Only once Big Data has been broken into manageable, digestible insights can it be of use to CEOs.

2. Quality and quantity are both important

The opportunities presented by Big Data are evident. This will certainly be the year where the business community at large recognises the need to fundamentally change its relationship with data.

However, in order to be relevant and credible, the insights provided by Dig Data must be accompanied by trusted opinions from peers, advisors and other business leaders. The make-up of a CEO’s Board must consist of subject matter experts and, often, those who bring experience from other industries. Getting the balance right between quantitative data and qualitative knowledge, can deliver powerful outcomes.

Getting the balance right between quantitative data and qualitative knowledge, can deliver powerful outcomes.

3. Don’t just rely on the status quo

If faced with a challenging situation, it often makes sense to look at past events for insights that inform key decisions. During the 2008 financial crisis, many analysts and commentators looked to earlier events, such as the Great Depression, as a guide to how we might respond and make better decisions in the future. However, the world is a very different place in 2008 compared to 1929, so what are the new influences, options, and opportunities for decision-making today?

CEOs need to consider data and insights from outside of their own professional sphere to make truly effective data-driven decisions. Often, there can be links, trends, and warning signals that machine-driven analytics can highlight that human analysts would overlook – we call them the “unknown unknowns”. These can be incredibly hard to identify but, with new technology, it is becoming easier to identify these early-warning signals.

CEOs need to consider data and insights from outside of their own professional sphere to make truly effective data-driven decisions.

4. Find the right platforms and technologies that enable better analytics

As in many industries, technology is having a huge impact on business intelligence and data analytics. As capabilities in this field evolve and improve, it is becoming increasingly important for CEOs to understand the opportunities available to them.

The application of artificial intelligence is just one example. Machine learning is enabling computers to analyse huge swathes of data in a fraction of the time that it takes human analysts; providing an accuracy and scale of insight not previously possible.

Speed is going to be a crucial factor in the evolution of business intelligence. Even the largest institutions – whether banks, oil and gas giants, pharma companies or any other area – are looking to become more nimble, so that they can respond and, more importantly, be proactive as the increased pace of change in business conditions and consumer habits impact their markets globally.

5. Still listen to those around you

The implementation of automation has been a hot topic in 2018. However, automated decision-making at a business level is only just emerging and should be approached with caution. Currently, this tends to apply to threshold testing on consumers (e.g. a mortgage or financing application), but as technology evolves, there is no reason to believe that automation for smarter, faster decisions will not be increasingly used at higher executive levels.

Such is the concern in this area, that limitations on automated decision-making have been applied under GDPR.

From a business strategic point of view, it remains crucial that the analytical platforms remain transparent and that people remain involved in the process throughout. Just as machines can be useful for challenging human insight (see point 3), it remains important that knowledge workers and analysts scrutinise how technological platforms are gathering, monitoring, and presenting data.

Within business intelligence, we are entering an exciting new phase. New technologies will enable businesses to do more with data than ever before, at a faster pace and more effectively. For CEOs, the difference between success or failure could literally be the extent to which they embrace the emerging machine-drive analytics presented to them.