Data, they say, is the new oil. Most organizations make business decisions based on data. When organizations transform themselves through data-driven decisions, several positive characteristics become apparent. Here are some of them:

  • Companies that practice data-driven decisions will uphold collaboration as core to their culture and ensure that data is accessible to all the employees who may need it

  • Organizations practicing data-driven decision-making will invest in time and resources to build the tools and skills necessary to manage the vast amounts of structured and unstructured data

  • Teams and individuals will begin receiving real-time insights. This will encourage early course correction, and also provide vital information about  new opportunities and insights

  • A culture of transparency and free-flowing communication will develop

Positive Uses Of Data-Driven Decision-Making

Decision-making based on data is likely to have a positive impact on every facet of an organization’s various functions.

  1. Finance

There are many data-driven decision-making examples when it comes to company finances. Ranging from seeking the most cost-effective way to deploy resources or allocate annual operating budgets, sound financial management is the very definition of data-driven decision making.

  1. Human Resources

From remuneration benefits to employee appraisals, data is crucial to carry out so many functions of human resource management. From recruitment to training and development, data-driven decisions ensure consistency and transparency.

  1. Sales & Marketing

Critical decisions affecting sales strategy and marketing campaigns need data-driven decisions to secure the best return on investment. Organizations cannot afford to plan and bankroll big campaigns based on individual opinions and anecdotal evidence.

  1. Customer Relations

An area of business management that has been significantly influenced by decision-making based on data over the last two decades is customer management. Customer servicing and consumer research have been transformed by Big Data analytics.

Positive Impacts Of Data-Driven Decisions

Every organization benefits from a system based on data-driven decision making in a variety of ways. Here are two far-reaching benefits:

  1. Increased Confidence

Data analytics allows companies to make decisions with a higher degree of confidence. Whether it needs to decide to launch or pull the plug on a product or make course corrections to the marketing strategy, data can provide actionable insights. Data helps in benchmarking objectives and provides a better understanding of your business’s impact.

  1. Proactive Initiatives

The more companies practice data-driven decision-making, the more proactive they become.  It allows them to identify business opportunities and prepare for changes in the marketplace.

Let’s understand this through an example. Shriram Pharmaceuticals was a traditional owner-driven company dealing in medical supplies. After a reasonably good run of two decades, the reins had been taken over by the owner’s daughter, Smita. A statistics graduate from Wharton, Smita was no stranger to dealing with data. Beginning with production and finance, she began implementing a series of data-driven processes to arrive at critical decisions. She wanted to expand the customer base and the product line.

One of the first things she did was set up research teams in both departments—the job of these teams was to build a robust database with qualitative and quantitative inputs. Within a couple of years, Shriram Pharma transformed from being a reactionary business to a highly proactive one. The valuation of the business has risen several-fold. Smita is ready to launch an IPO and take her organization to new heights.


Data-driven decision-making brings many benefits. One can start small by benchmarking performance, improving documentation, and so on. All it requires is an openness to learn and imbibe. Harappa Education offers a six-module course on Creating Solutions that will teach you to leverage the right kind of information to get to the root causes of any problem. The course will help you become a problem-solver.

One of the most significant benefits of adopting data-driven decision-making is that your business becomes nimble and fleet-footed. Problem-solving processes can become more robust and resilient if they are built on a bedrock of data.

Explore topics such as Ethical Decision MakingData Driven Approach & How to draw Actionable Insights from our Harappa Diaries blog section and develop your skills.

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