IDG Contributor Network: What exactly is a data-driven organization?

0 Posted by - 29th October 2019 - Technology

The use of data by organizations to improve the efficiency of their operations and drive innovation is nothing new. Since the early 20th century, companies have been applying “scientific” management techniques to get more from their assets, both physical and human. However, the last decade has seen the rise of new tools and techniques as well as new sources and forms of data that are changing the landscape for business planning and innovation.

Analysts at Forrester Research have identified a new type of organization, the insights-driven business, which they claim are growing at an average of more than 30% annually and are on track to earn $1.8 trillion by 2021. Similar research from other consulting firms highlights the emergence of firms that are dominating their sectors as well as creating new markets by generating actionable insights through data collection and analytics.

For business leaders, a key question is what are the defining characteristics of data-driven businesses and what can companies do to catch up with the leaders?

Embedding a data culture

At the heart of any data-driven organization is the internal culture of the business with respect to the way it views and acts upon data. This has to come from the top and permeate down through the business. Research shows that treating data as a resource only relevant to specific parts of a firm for the creation of reports or strategic planning will limit the potential for developing insights that can feed into innovation and new product development.

A recent interview with the CEO of rapidly growing ecommerce start-up ShopRunner highlights the importance of a top-down approach to building a data culture. This starts with their recruitment process where they ask interviewees, “How have you used data in the past to make decisions?”

Research from McKinsey supports the notion that engaging in data analytics for its own sake is not going to move the needle. At the heart of all this activity needs to be the objective of making better decisions. This requires data to be made available to everyone in the organisation who needs it as well as the tools to analyse it. Evidence from global businesses such as Boeing and Maersk show that when employees have better access to data then new ideas will emerge and operating improvements made.

read more at by Martin De Saulles