Nowadays, people in all industries recognize the immense value of data. Doctors, educators, business owners are all relying on data to make good decisions. It makes perfect sense; making decisions when strongly informed by data is inevitably going to improve the outcomes of our actions. But is it possible that data can sometimes lead us astray?
Dealing with data is very attractive. Data is tangible and it is easy to use it to support our arguments with data. However, when we don’t have the proper context, we can’t replicate the successes or fully understand the shortcomings that the data conveys.
In this article, we explore how data can have a negative impact on a business.
1. Dealing with inaccurate data.
Data-driven companies base all their decisions on data rather than opinion, in almost all instances. However, it is not uncommon for companies to find out afterward that the data they based their decisions upon turned out to be wrong.
As most companies focus on collecting and analyzing data rather than cleaning it, inaccurate data happens more commonly than people think.
Companies can improve data quality by setting up a data governance policy. It is necessary to determine data definition and ownership, indicators calculation, data quality tools, as well as invest in hiring data engineers who will adequately clean the data before storing it.
Analyzing incorrect data is worse than basing decisions on opinions, so make sure to clean your data first.
2. Not identifying data-based objectives.
Data-driven decisions can produce bad outcomes.
Companies are racing to collect and analyze data without a clear end objective in mind. It’s crucial to have a strong data strategy that’s aligned with the company’s goals.
The goal of a data strategy should be to track the progress of a project, solve a problem, or obtain insights. Only then will a company be truly able to use data for making decisions and improving outcomes.
3. Forgetting to differentiate between big and small decisions.
Data collection and analysis can assist in making significant decisions that affect a company’s direction as well as smaller decisions that improve a product or fine-tune a service.
It’s easy to become sidetracked if you expect that the same sorts and volumes of data can influence all business decisions.
Based on its importance, you should provide each decision with the appropriate amount of data and analytical time. Aligning importance can reduce effort put into more minor decisions and direct energy to where it is needed most.
The fact is, most companies like to proclaim that they are data-driven. However, in many cases, they turn out to be assumption-driven with only data support. Whether you are building a data-driven enterprise from scratch, improving existing KPIs, or still trying to connect the dots, we are the team of business intelligence experts in your corner.
At HICO-Group, we offer a holistic approach to customer solutions for business intelligence. We are masters in working with KPIs. From KPI identification and planning to building future-proof data solutions, we implement state-of-the-art BI concepts customized for your company’s needs and market.
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