How data can change your business – if you let it
Business models within many industries are evolving as more organizations incorporate data-driven decision making in the move toward becoming a data-driven business. David Loshin has blogged about the differences among three different data-driven business models that he calls completely data-driven (transforming information into monetizable assets), data-infused (using information to drive business process optimization) and data-informed (adapting new information to fit existing business models).
Katrina Wakefield recently pondered if it’s possible for a business, especially one formed long before the era of big data and advanced analytics, to learn to be data-driven. “So what should you do? Carry on with traditional business models and approaches to data use, or try to acquire the same mindset – the same data-driven mentality – as the digital generation? And even if the latter is possible, how can you achieve such a huge cultural shift?”
As I have previously blogged, it’s easy to say that we will go where data drives us. But what happens if data is driving us to a destination we’re uncomfortable with? What happens when data calls into question some of our long-standing beliefs? “The reasons inhibiting data-driven business,” Phil Simon blogged, “are decidedly human. We like to think that we can do things that machines and algorithms can’t. No computer or statistical model knows what I know. This belief doesn’t make us evil; it just makes us human beings. Add up these pockets of admittedly understandable resistance and progress lags or stops.”
“Businesses that want to be data-driven,” Loshin explained, “first have to be data-aware – all the staff members have to understand that the company values data and that it is everyone’s responsibility to ensure its utility.” Different roles within organizations must work together to ensure they’re doing the most they can to put data at the center of decisions they and others make, across the business. Wakefield recommended collecting more data – including new types that could help you better understand your business – and making it easily accessible to everyone throughout the enterprise. By doing so, “you will have a culture where the answers to almost every question can be extracted from data. This reliance on data is one of the core tenets of data-driven businesses born into the analytics or algorithm economy.
