Data gives you insights that help you run your business better. You will make better business decisions if you are sufficiently well-informed from the output of Business Intelligence (BI) systems. Achieving this outcome involves know what data to analyze, and then pursuing a sound analytics process.
Data and Business Decision Making
Running a business is about making decisions, hopefully the right ones, on a regular basis. Some decisions may seem minor, but aren’t. For instance, if your manufacturing business provides field service, should you charge to send a repair technician to fix a product whose warranty expired just one day earlier? Maybe yes, maybe no… but it won’t put you out of business either way. Other decisions appear to be more substantive, like should you double your fleet of repair trucks?
These two decisions may actually be quite closely linked. Using BI tools to analyze mountains of ERP and CRM data your manufacturing business generates can offer you insights into the value of repairs as they relate to lifetime value of customers. You might look at customer histories and determine that most of your customer defections were due to poor service experiences. The income you get from the service call may be outweighed by the customer’s feelings about receiving a defective product.
Data helps you answer related questions. Should you increase the size of your repair fleet? Should you make a policy of offering free repairs after warrantees have expired? Data gives you better decision making ability because it lets you compare the costs and benefits of a decision.
How to Realize Data-Driven Decision Making
Data makes you a better decision makerif you’ve established the right analytical processes and implemented the right BI tooling. With good data modeling, you can draw useful conclusions. For example, you could model the impact of field service experience on customer loyalty. Armed with this knowledge, you would be in a good position to make a wise call on expanding the service fleet for your manufacturing business.
The ability to dig deeply with data is essential to effective decision making. In the repair example, it might turn out that poor route planning and resulting lateness were the reasons for poor service quality. The corrective action is not to increase the number of trucks – a costly proposition – but rather to get smarter about repair routes.
Using data to help with decisions should involve what is
“root cause analysis ,” to answer questions. What is really causing a problem? A BI
tool can facilitate root cause analysis by visualizing data from different
sources to identify what’s really happening in a given business situation. The
data might come from external sources for this to work properly. An overlay of
Google map directions could reveal poor routing that might not otherwise be
identifiable from simple business data.
We have worked with many businesses on BI and data analytics that helps with business decision making. If you want to learn how data can improve your decision making abilities, let’s talk.