Why Data Analytics is Crucial for Business Decision Management
“Decisions are the counsel woven into the fabric of real life”. So how many decisions did you make today? I have made rather many, and it’s just the start of the day. I decided to challenge myself to wake up early for a fast pace workout session. I decided to skip breakfast and opted for green tea rather than milk tea. Then I proceeded to choose a formal dress from a myriad of dresses in my closet. On the way, I chose to listen to upbeat classics to kickstart my day on a cheerful note. Long story short, even before I made it to work, I had already either consciously or subconsciously made several decisions.
People make hundreds of decisions on a daily basis. In fact, research suggests, an adult makes about 35,000 remotely conscious decisions each day.
In an organizational context, companies make millions of operational decisions every day. Some of the complex operational decisions are:
- What can be the next best offer?
- Which is the best method to configure a product?
- Whether to accept/approve an application for credit?
- What is the best strategy to improve customer experience?
- How to prevent fraud?
Effective business decision making keeps the organization growing sustainably with speed. Several companies face this problem, particularly, the growing ones undergoing transition at a rapid pace.
It is worthwhile to understand that decision making needs accurate and complete information, and the ability to synthesize meaningful results from that information.
Decision making is a complex task as it involves:
- Big data
- Stakeholders with different objectives
- Varied analytical techniques
At this point without having a mechanism for decision management, the organization may spin out of control.
What is Decision Management?
Decision Management is an approach of designing and building an integrated system that automates and improves the high-volume of operational decisions. Organizing data obtained from all levels of the enterprise is enormously valuable for the decision making process. This process is termed as Data Analytics.
Instead of going with a hunch, companies are embracing sophisticated Data Analytics and statistical tools to make operational decisions for managing inventory, building customer relationships, formulating strategies or pricing solutions.
Data Analytics helps in sorting massive amount of unstructured data to derive key insights. On top of that, a decision management system, also known as decision modeling simplifies the overall decision management process. It includes input data, the algorithm (i.e. logic, rules, and analytics, applied to the input data), and the output (the judgment or determination) to produce structured decisions.
How Data Analytics Helps in Decision Management
Big Data and Data Analytics are disrupting the existing ecosystem and business models. Having the potential of using granular data for the proliferation of new data sets, it enables faster and fact-based decision making.
Let’s consider an example of customer retention. Customer retention includes creating specific offers across multiple channels that make sense to different kinds of customers.
Moreover, the retention offers are for the customers who decide to leave in the near future. So how, can we target or identify such customers who are planning to leave in the future?
The first step is to start using the data we have about our customers and then consider using Predictive Analytics. Predictive Analytics analyzes current and historical data to identify risks and opportunities for the future. The best effective method of predictive analytics is a rank-order individuals technique. Using this technique, we can turn uncertainty into probability — able to estimate who is at the retention risk and enable us to take further decision. The higher the score, the more “renewers”.
The agility to derive insights from data which can be translated into action is essential and often leads to competitive advantage. Collectively, strategic and tactical day-to-day decisions constitute the lifeblood of operational effectiveness.
Why Data Analytics Matters To Your Organization
The data-driven organization makes better strategic decisions and also experiences high operational efficiency, improved customer satisfaction, and robust profit and revenue levels.
In this volatile data-driven market, enterprises need to look through the lens to identify risk and rewarding opportunities, and include Data Analytics into a core business decision making process. This streamlines internal processes, unfolds customer preferences, interprets emerging risks and builds a mechanism for constant improvement and feedback. That’s how your organization can gain a competitive edge and stay at the forefront of digital disruption.
The time to become insight-driven is now. Get in touch with our analytical experts to know how to accelerate the application of Data Analytics within your organization at Cygnet Infotech on +1-609-245-0971 or drop us an email on email@example.com.
Ankita Hariyani is a content writer at Cygnet Infotech. She has the technical precision, business experience and creativity to craft technically detailed write-ups with ease. She embraces her writing skills to condense complicated information into easily digestible articles for prospective clients, business readers, executives, and for those with an appetite for knowledge. When she is not busy writing, she loves to spend her free time singing, reading and writing poetry.View All Posts