Gone are the days when businesses and their leaders could make decisions intuitively, with only their gut feelings about their industry and particular company and clientele.
In a 2019 McKinsey survey, over 60% of respondents said at least half the time they spent making decisions was inefficient. And a 2021 Gartner survey discovered that 65% of decisions were more complex than they had been just two years prior. Clearly, leaders are struggling with the changed decision-making process.
Enter analytics-based decision-making, which combines massive amounts of internal and external data with AI.
To be successful, businesses today must make decisions backed by quality data and analytics. After all, the numbers don’t lie. There are a few reasons for this change.
With the rapid pace of change and the unpredictability of today’s world, businesses must move to make data-driven decisions, or they will be left behind. A relevant example of this would be when companies used analytics-based decision-making to combat the supply chain issues caused by COVID-19. Some businesses developed supply chain control towers (SCCT), which gather and integrate metrics about crucial parts of the supply chain and deliver them to an organization’s decision-makers. Read more about them in our blog post here.
Long story short, if your competition is making informed, data-backed decisions and you’re not – you’re already falling out of the game. And more and more of the competition is using analytics: Businesses spent $215 billion on analytics solutions in 2021, a 10% increase over 2020.
Analytics-based decision-making is more potent than ever before, too, thanks to the explosion of data quantities and advances of AI in the last decade.
Several significant advantages of using analytics-based decision-making include:
- It sorts through the noise and helps make leaders more aware of what’s happening in their industry and the broader world.
- It helps companies uncover the best ways to reduce costs and make the most of their spending. Analytics-based decision-making can inform marketing and sales strategy with insights into the customer journey and buying behavior.
- Bringing analytics-based decision-making to an organization involves providing all decision-makers with a single source of truth through data. When an organization has a single source of truth, business decisions become much more aligned and compatible, allowing for a broader and more expansive business strategy to take shape.
- It can save time in the decision-making process, as data analytics brings the best strategic decisions into focus for leaders.
- If a business receives continuous analytics, they are well-equipped to make more frequent decisions, with up-to-date data to reflect any developing situations (such as a pandemic or geopolitical conflict). For many companies, COVID-19 and the resulting business shifts necessitated a more improvised, on-the-fly approach to decision-making, which continuous analytics is the perfect tool to support.
- People have biases and make mistakes. While organizations are free to do what they wish with the analytics at their fingertips, analytics provides the facts, which are a great baseline for any decision.
So, we’ve established the need for your business to utilize the powerful tool that is analytics-based decision-making. Be on the lookout for our upcoming blog post about how to determine what type of analytics will best fuel your company’s decision-making.