What is a data-driven company?

There is no doubt that we live in the age of data. It is the new raw material—a highly valuable resource that brings significant benefits to organizations that do not miss the opportunity to leverage all their resources. Resources that, until not too long ago, were not even known to exist, and that have proven essential to improving efficiency, operations, and profitability across all sectors.

To get the most out of data, organizations must operate under a data-driven philosophy and become data-driven companies. What does that mean? Concisely defined: to base all organizational decisions on the analysis and interpretation of the figures it generates. This therefore requires data, as well as the technology and expertise to exploit it.

We have one pillar—the primacy of data—but there is another that is just as crucial in any data-driven project: a change in organizational culture, which necessarily must affect each and every department in the company. And this is no minor matter: to become a data-driven organization, it is not enough to use advanced analytics or data science techniques; they must be the central axis around which the company’s decision-making strategy revolves. The backbone that will underpin any action.

Once it is internalized that data will be the cornerstone of the business strategy, it must be compiled, processed, and transformed into useful information that facilitates decision-making and makes it more accurate. At this point, Business Intelligence, Internet of Things (IoT–IIoT) devices, Artificial Intelligence, Machine Learning, algorithms, and a whole set of advanced data capture and processing techniques come into play, enabling us to develop, for example, demand forecasting systems, predictive maintenance, or prescriptive systems, which are highly useful in the industrial sector.

All these systems provide objective information, either in real time or in the form of future predictions, about the performance of any business unit. Massive, isolated, hidden, and underutilized data becomes highly valuable information on which it is possible to make better decisions easily and optimize business processes.

Data Driven vs Big Data

As we have already noted, we should not confuse working under data-driven parameters with the use of big data in the company. Big data refers to the ability to compile and process enormous quantities of data. Right now, we can work with volumes unimaginable twenty years ago. Processing speed and capacity have increased exponentially, while storage costs have decreased.

And what does this mean? The possibility of obtaining objective, reliable, and highly useful information with which to improve business operations. It is a shift from acting based on teams’ intuition and experience to doing so under parameters that reveal the organization’s real situation in the present and the future, which makes it possible to adjust decision-making and eliminate uncertainty.

Therefore, the use of big data is essential to remain competitive in a globalized and increasingly digital market like today’s, but it does not make an organization data-driven. Big data is a tool used by data-driven companies, which require data to take precedence throughout the entire business strategy.

Data Driven for everyone

Although it may seem otherwise, these global digital transformation processes are not only accessible to large corporations. Advances in technology, along with the resulting cost reductions and democratization, mean that data-driven approaches are within reach of organizations of all sizes.

It is true that this shift in philosophy requires effort, like any transformation process, and it is not achieved overnight, but it is not limited to the titans of the economy. SMEs can now use digitalization to increase productivity and profits, just like large companies; in fact, it is increasingly becoming a necessity.