I make personal spending decisions knowing how much is in my bank account. I’ll make certain I know how much gas is in the tank before taking the car on a road trip and, let’s face it, making sure you know what is in the refrigerator before a trip to the grocery store is always a good idea.
The same holds true for making business decisions. I look at certain information or data when making a business decision. For example, knowing how data will be used drives the decision on what type of data to collect, store and analyze.
Here are the three factors I consider when making a business decision involving data:
1. Data Quality: Without good data, no decision will be sound. But waiting for perfect data might mean no decisions get made. The key is being cognizant of what the data is, and what decisions can and should be made based on that data. If, for instance, the bean counters are trying to know how many beans are being grown on each vine, then you’re going to need to count every bean. But if you’re pricing your beans by the pound, then weighing your inventory is faster and still produces the necessary information. In this same vein, I always evaluate the quality of the data as part of any strategic move I make. I ask myself if the data is suitable for the decision, and I encourage others to do the same.
2. Data Measurement: Taking data and measuring the results of how the data was used is vital to making business decisions. Looking at the trends these measures show can then support other data components such as analytics and data modeling. Without understanding whether you’ve gotten the results you’ve wanted with your data, you’ll not be able to leverage it in the future in a way that will be most beneficial.
3. Data Evolution: The decision to be made could have short- and long-term implications with regard to the development of additional data that could, in turn, be used to make future decisions. The potential for creation of new and useful data tomorrow should always be a factor in the decisions being made today.
There have always been decisions, and there has always been data — the latter has always driven the former. But in this day and age, the terms “wealth of data” or “avalanche of data” are both accurate. The exact data you need may be right in front of you, but you also may need to sift through a haystack to find the needle of perfect data. Finding the right data and matching it to the right decisions is a fundamental necessity, and thinking three decisions ahead about the data you have, the data you want and the data you’ll be able to generate are the extra steps that will set you and your company apart.
Roger Hartmuller is VP of Allstate’s information services group.
This blog was exclusively written for Insurance Networking News. Published with permission.