Today’s guest post is written by Erin Palmer from University Alliance. Thanks Erin for sharing your knowledge in the field of business intelligence and data mining.
Benefits of Using Data to Make Decisions
It has been said that what gets measured gets done, and this is perhaps the key factor in why data analytics leads to a higher performance level by those organizations who religiously implement it. From healthcare to technology to professional sports, it is the data mined and analyzed that indicates the path of least resistance to success. In contrast, making business decisions without properly utilizing and analyzing data can impede a company from reaching its full potential.
Clearly-Defined Problems Lead to Better Decisions
Decisions can only be made after a problem or goal has been clearly defined. In this way, data mining is akin to a high school science project. A decision comes about only after a problem has been identified; a hypothesis developed; data has been collected and analyzed and finally interpreted. Only at this point is a decision made and communicated to the group.
Every organization must follow this process in order to efficiently solve internal problems as they arise. Utilize brainstorming sessions to accurately construct hypotheses. Figure out first how you will use the data’s results before you collect it, and when ready to mine, consider using several methods of data collection.
Data is Neutral and That’s a Good Thing
Data is necessary in making effective decisions and solving problems specifically because it has no personal agenda. Data is neutral; it simply tells a factual story. Human beings are the ones that hold differing opinions that often shape decisions which could lead to lesser results.
In order for the data to do its job though, an organization’s team members must be able to read and interpret it accurately. This means familiarizing themselves with a few basic data mining terms and concepts such as the mean, standard deviation, counts and benchmarking. This will ensure that team members do not “find” something in the data that is not valid but simply supports their own personal views.
Decision Monitoring is Equally Important
Data-based decision making is a cycle, and as such, has no real end. Once the data has been mined, interpreted, and a decision has been made, the next step is to monitor the results of the chosen decision and determine if the outcome gives desired results.
Monitoring the implementation of a data-based strategy provides key information on how the chosen methods need to be adapted and refined. Evaluating outcomes offers even more data needed to make any subsequent decisions.
Data Analytics as a Modern Day Crystal Ball
Complex data gathering and analysis allows an organization to examine their current strategies and past performance in order to make educated decisions regarding future business goals. This data analysis is beneficial not only internally, but can be used to monitor and predict future market climates across many different industries.
In any business, knowledge derived from data mining can be the one thing that sets a company apart from the competition and gives them that all-important edge. Making effective decisions based on data gathered and analyzed; monitoring the results and refining when necessary is the true path toward any organization’s full potential.