What the Hell is “Data-Driven Decision-Making”?

It has become apparent to me that “data governance” can’t just focus on data and tools. 

We hear a lot these days about topics like “digital transformation,” “big data,” and “data-driven decision-making.”

A common thread is that organizations must learn how to govern, analyze, and interpret the increasing volumes of data that are relevant to them, regardless of sources or types of data. Failure to do so will, according to the pundits, result in failure, defeat, lack of competitiveness, or worse.

While I can’t argue with the importance of making sense of data, I do have a bone to pick with one of these terms, “data-driven decision-making.” What usually pops into my head when I hear this term is, “When wasn’t rational decision-making not data-driven?”

Granted, I’ve always considered myself to be somewhat data-driven. My graduate studies were heavy on research methods, statistics, and operations research. My careers since then have focused on data intensive systems and processes, right up to my current interest in data governance.

I learned long ago the limitations of data and the need for judgement in personal and family affairs. Anyone who has been faced with major life and death medical decisions will know the terror of selecting among choices with uncertain probabilities of success – or failure. Numbers don’t necessarily lie, but they don’t always tell the whole truth, either.

Consider organizations. Are organizations now really more likely to be more data-driven than they were in the past?  A lot will depend on the nature of the business and the organization. Firms that depend on high-speed augmentation of financial transaction management, for example, must seriously be considered to be data-driven, as are many firms that have grown up with the digital revolution and web based e-commerce. Calculating orbital paths and fuel consumption are also data intensive.

But what about smaller or more traditionally structured organizations that must still rely on legacy programs and processes to conduct their more uncertain day to day businesses? Is there any reason that they, too, shouldn’t strive to make their decision-making more data-driven, given the increasing power and flexibility of the tools now available for making sense of data of all kinds, including data on human and consumer behavior?

Of course not.