Business Intelligence Systems – How Historical Data Helps Guide Better Decision-making
One essential insight in this digital era is that it has helped to establish how important data-driven decision-making is to any business. How much accuracy you will achieve in making business decisions, is directly linked to how much information was gathered.
Historical data is data collected from sources such as ads, emails, articles, press releases, documentation, etc. that involves past events and situations. Historical data helps to identify different patterns and develop models to predict future trends.
On the other hand, data-driven decision making (DDDM) is a process that involves collecting data based on a set objective to analyze patterns, and utilizing them to develop strategies, as well as activities that benefit the business in several areas. It simply means adopting and adapting verified information in decision making.
A recent research shows that data-driven businesses are twenty-three times more likely to acquire customers, six times as likely to retain those customers, and nineteen times as likely to be profitable as a result.
Here are a few insights on how historical data helps to guide better decision-making;
1. Helps businesses set measurable goals in decision making:
While some businesses set goals based on vision and mere aspirations, data-driven organisation have learnt to set more accurate and predictable goals backed by data. This is a major success factor for businesses that makes decisions via the lenses of data.
Through the lenses of historical data, organisations can set goals that propels them towards realizing their vision.
2. It helps you solve questions confronting your organisation:
Most of the questions you will be confronted with, in your organisation, will be those that have answers in historical data, and your job is to find those data, analyse them accurately, and apply them appropriately.
A good example of a question confronting most luxury and high income consumer brands today especially in the FMCG sector in Nigeria is the urge to join the trend of pivoting into creating products for the mass market.
In the past few weeks, we have seen high-income brands in wines, foods, beverages and the likes creating sachets options to serve lower income earners. This looks like a great decision to make in terms of market penetration and keeping the brand top of mind. However, this decision needs to be backed by data that guarantees that venturing into mass market can break even and be profitable, putting into consideration the production and marketing cost of these products with the price and demands in the market.
Therefore, if pivoting does not pay the bill, it’s only wise to halt such portfolio and prevent the organisation from bleeding unnecessarily.
3. Helps you guard against your biases:
Leaders sometimes make business decisions based on biases and immediate emotional attachment without realizing. This in some cases ends up not being the best decision especially for long term plans. However, cultivating the culture of data-driven decision-making helps to make an accurate decision that is based on proven records. This is essential for any business to save you from sabotaging yourself because of your biases.
4. You make a confident, verifiable and scalable decision:
While some organisations still run on a random trial of processes driven solely by intuition, making them constantly susceptible to errors, data-driven decision-making organisations combine with intuition enjoys the benefit of making sound decisions that helps to achieve their vision on the long run.
Businesses that will survive and thrive from one generation to the other must constantly engage based on verifiable and scalable data.
5. Making most out of consumer patterns
Gone are the days when an organisation creates a product or offer a service without zero consumer insight. The businesses of today create their offer from the consumer point of view, and the problem they want to solve.
In an increasingly customer-focused era, businesses have no choice than to amass the wealth of consumer information and data, in other to continue giving value to consumers and to remain competitive. Data is critical for any organisation in leveraging consumer insights to shape their products, solutions and buying experiences.
As we conclude, we cannot overemphasize the place of data in organisations. Businesses that want to remain relevant must adopt a process that allows data-driven decision making. The fastest way to be ahead of competitors is to make data-driven and strategic decisions.
Businesses are sustained by their bottom-line, clients and customer drive the bottom-line, and the most effective marketing and customers’ acquisition strategy is data-driven decisions.
