The availability of data in this current age is terrifying – in a good way.
This is because, with the vast presence of data and an array of related courses such as a Master of Business Analytics Online, a positive change can be made within society and business which invariably translates to the betterment of life and an increase in the finances of corporations.
Even more with the presence of digital technologies such as Artificial Intelligence (AI), data is generated at a faster rate when compared to previous decades.
Latest estimates show that 328.77 million terabytes of data are created every day. The USA has over 5,300 data centers, which makes it the leading country in this domain. This should inform you how prevalent data is.
With millions of terabytes of data readily available, it pays no one any good to live off their gut feelings than the readily available information we can access daily. Rather, individuals must analyze and understand the data they ever so readily have.
Now the question at hand is, how do I understand and analyze my data to help make informed decisions?
Worry no more, as this article aims to bring to your attention how to use data for problem-solving and decision-making.
How to Use Data for Problem-Solving & Decision-Making?
Before any set of data can be used for problem-solving and decision-making, the steps required are outlined in this section.
- Problem Definition
It is paramount to get a clear and specific definition of what the problem is and why must it be solved. A good and well-written problem statement is required.
The four main elements of a perfect problem statement include an ideal situation, reality, the consequences, and a proposal to deflate the problem. With a good problem statement in place, it allows you to know which data you need and the particular questions you need answer to.
- Collection of Data
After the problem has been defined, it is now time to progress to the collection of data. Data can be collected in a myriad of ways such as internal records, interviews, observations, experiments, external reports, databases, or genuine websites.
Data can be represented in either qualitative or quantitative formats. Qualitative data is non-numeric information, which includes in-depth interview transcripts, diaries, field notes, answers to open-ended survey questions, audio-visual recordings, and images.
Quantitative data, on the other hand, represents data that can be represented numerically, thus it can be counted, measured, or given a numerical value.
The collected data can be stored in spreadsheets, databases, or cloud storage such as iCloud and Google Drive.
- Data Analyzation
Data analysis is needed to find hidden patterns, trends, existing correlations, or relationships between individual components of the data that solve the problem at hand.
Bar charts, pie charts, tables, or dashboards can be utilized to give a graphical representation of the collected data. This makes it easier to read and interpret the data.
It is always advised to interpret the data carefully and patiently. Most importantly, you must deter from making assumptions or jumping to conclusions without evidence.
- Solution Implementation
A solution can be implemented based on the results of the data analysis.
The proposed solution must factor in the feasibility, costs, benefits, and risks of the solution to the potential market. Additionally, a comparison must be made to other alternative solutions.
The management team of the firm must agree with the proposed solution before deployment to the wider customer base.
Businesses can leverage presentations, reports, or proposals to make the communication of the proposed solution seamless.
- Result Evaluation
This stage involves the measurement of the outcomes of the proposed solution against expected results.
Feedback from users is a great way to analyze if your new solution is making a positive change. Users always give unbiased feedback, hence appreciating feedback from them is a win for corporations seeking to use data for problem-solving and decision-making.
Online forms, surveys, or metrics are easily accessible tools that a business can use to understand the results of the proposed solution effectively.
Why is Data Important for Problem-Solving & Decision-Making?
Data is a very important facet in planning out strategies and making informed decisions across several business domains.
It provides a better perspective in understanding the behavior of users. With data from users, software developers can identify the heterogeneous patterns and trends of users to aid in providing a better user experience.
The availability of data provides an opportunity to enhance marketing efforts. Access to user demographics makes it easier to reach target audiences more effectively and efficiently.
Data shows you the competitors that exist within your business area. This allows business owners to strategize means and ways to retain their customers.
Bernard Marr of Forbes recently published on why businesses need data to make better decisions. In this issue, Bernard mentioned that making the shift towards data-driven decisions can be a tricky path for companies to navigate, particularly for larger organizations that have deeply entrenched values. However, he emphasizes that ” in today’s climate of fast-paced technological change and digital transformation, it’s increasingly becoming the deciding factor in whether a company will rise to the top or get wiped out by more forward-thinking, digitally adept competitors.”
Benefits of Data for Problem-Solving & Decision Making
Making decisions and solving problems by analyzing data is indeed crucial. It provides an unparalleled position in ensuring your business remains fair, goal-oriented, and focused on improvement. Additionally, it allows your business to make confident decisions, guard against biases, find unresolved questions, set measurable goals, and improve company processes.
- Confident Decisions
As rigorous steps are taken before arriving at a decision, unnecessary mistakes are avoided in problem-solving and most importantly decision-making. This contributes to pushing the team forward and boosts the confidence of every member which enables better performance.
- No Biases
Biases of all kinds are avoided when data is utilized in decision-making. All decisions made will be fair and objective, with substantial proof from the collected data.
- Set Measurable Goals
Data shows the trajectory of a business over time. This allows businesses to set attainable goals over some time and also see which area attention is required. Without data, it would be difficult for businesses to have an overview of how they are performing.
Conclusion
In a nutshell, data is a very powerful tool that businesses must leverage to positively shift their frontiers.
