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Organizations that adopt data-driven decision (DDD) making are 5-6 percent more productive than organizations that don’t rely on extensive data analysis prior to making their decisions. That’s one of the results of a study made by Erik Brynjolfsson and his colleagues at the MIT Sloan School of Management.
David Grossman, a technology analyst at Stifel Nicolaus, a brokerage and investment company, commented that “The biggest change facing corporations is the explosion of data. The best business is in helping customers analyze and manage all that data.”
Companies definitely want to be able to take advantage of data-driven decision making, but most companies just aren’t in a position to widely use the technique. A report from SAS on the use of Big Data and data analytics across different organizations, identified four stages of evolution in gaining competence in applying the results of data analytics to the decision making process.
The SAS report classified the four stages of evolution for how companies effectively utilize their data:
- Strategic Data Managers – companies with well-defined data management strategies that focus on prioritizing and analyzing the most valuable data
- Data Valuers – companies that understand the value of data and manage data, but still struggle with issues around data accuracy and complain they are short on resources to manage their data
- Data Collectors – companies with no central data management strategy, have no data governance, and suffer from poor alignment between business and IT
- Data Wasters – companies that don’t prioritize data, struggle with data management issues, but collect large amounts of data and make little attempt to analyze it
The SAS report found that globally only about 18 percent of organizations fall into the category of Strategic Data Managers, and of those, about two-thirds manage to very effectively analyze large amounts of their data and to use the results of their analysis as a basis for making business decisions.
Jim Davis, SAS Chief Marketing Officer and Senior Vice President, said that “Data provides transformational insight, but not by just sitting there. Pulling value from data requires business analytics – comprehensive technologies that manage data, analyze it and deliver insights for improved decision making.”