The what, why, and how of data-driven working

The term data driven, or data-driven working, has become indispensable in modern business operations. And for good reason. Because our lives, and those of our customers, increasingly play out online, gigantic amounts of data are being generated. But the number of sensors collecting data in all kinds of ways has also increased exponentially in the past few years. Technology is more accessible and cheaper, and more and more data is readily available thanks to IoT and cloud technology. Data is thus everywhere and has an impact on the way we work. But what exactly is data-driven working? Why should you do this? We answer this, and other questions, in this blog.

What is data-driven working?

In a company, it's mainly about making decisions. How are we going to approach this? When are we successful? You can make these decisions and evaluations based on gut feeling, but you can also make them based on data. In companies with a strong data culture, important decisions are informed by data and analysis, and executives act based on analytically derived insights rather than intuition or experience.[1]

Data-driven working means working based on facts. These facts arise because collected data is analyzed using, for example, data analytics tools, in order to gather information. This information, combined with the knowledge and experience of employees, then forms insights. By making informed decisions based on these insights, you ensure the organization becomes data-driven.

A data-driven organization is characterized by making this way of working part of every work process and every department. It's therefore no coincidence that research firm Gartner indicates that business leaders increasingly recognize the importance of data and analytics when it comes to accelerating digital business initiatives. As a result, data and analytics are shifting from a secondary focus — supplemented by a separate team — to a core function within the entire organization. However, business leaders often underestimate the complexity of data and ultimately miss opportunities. According to Gartner, this can be addressed by involving strategic data specialists in this process, such as a Chief Data Officer (CDO). By involving them in setting goals and strategies, they can even increase the consistent production of business value[2].

Why should I work data-driven?

The potential for data-driven business strategies and information products is greater than ever. But while companies flourish on data and analysis, we still too often see data and analytics play a supporting role when it comes to business initiatives.[3] This needs to change. And that means shifting from steering by gut feeling to well-founded decisions.

A data-driven approach means you know faster when something is going well or not going well. This makes it possible to adjust the right levers faster to bring about change. And not only that, but you also know which levers you can best turn for the desired result. You have the data to properly substantiate your decisions and therefore also easily bring other stakeholders on board with the decision. In addition, it also becomes possible to use the available data to automate certain processes. The organization starts working faster and smarter. By working data-driven, we steer our processes better, discover and predict patterns in customer behavior or business performance, and in some cases we even find new revenue models by marketing the data products. In short, the benefits are numerous, and it's high time to start working data-driven if you're not already doing so. But how do you get started with data-driven working?

How do I get started with data-driven working?

Data-driven working is more than just being able to extract the right data from your systems. The transition to data-driven working also brings organizational change with it; partly to place responsibility in the right place, but sometimes also because it can be wise to outsource the specific technical execution or support to a technical partner. According to Gartner, however, it's mainly about your people. Data alone can only take an organization so far. People are the real drivers. Analytics leaders must therefore bring in the right talent, set a good example, and know when not to rely on data[4].

Teach your employees to fish

To truly work data-driven successfully, your employees are essential. It's important to provide sufficient training so they can work with data and analytics tools. ShopRunner CEO Sam Yagan has a useful trick for this. "The way we got everyone to start using analytics tools is by making sure they know how to 'fish'. If someone comes to the analytics team with a request and says, 'Hey, I'd like you to put this report together', the analytics team is expected not only to send the report, but also to teach the person how they can do this themselves in the future, so the request doesn't come in again."[5]

A journey toward improvement

It's important to realize that data-driven working is not a final destination but a continuous journey toward improvement. Your data strategy, roadmap, KPIs, and dashboards therefore deserve to be regularly held up to the light. Every process you optimize gives you data and insights that let you make further improvements. And that new data also gives you an increasingly better picture of your own organization, your customers' wishes, and your products. By scaling along with the growth of your data, you gain more and more context, and your data-driven decisions keep getting better. But that's not all: the knowledge you gather this way may be worth even more in the long run. Because with the right data, predicting success factors becomes ever easier, and you keep applying data further in your revenue model. And who knows which data will give your organization the decisive advantage?