Data-driven decision-making (DDDM) is becoming increasingly crucial for the future success of businesses. By using data and analytics to inform decisions, organizations can gain valuable insights that help them make better decisions faster and more accurately than ever.

However, many companies struggle to adopt a data-driven approach due to several common obstacles that impede their progress or even completely block the integration of data-driven management (DDM).

Most commonly, limited access to data, difficulties in interpreting complex datasets, lack of knowledge among employees on how to use data effectively, no data-driven company culture, and inadequate technology infrastructure. Additionally, organizational cultural barriers prevent the widespread adoption of a data-driven mindset. To overcome these challenges and successfully implementing a successful data-driven strategy requires commitment from leadership and adequate resources to train personnel in the skills needed for leveraging big data. With the right attitude and support from all levels of an organization, businesses can reap the rewards of making informed decisions based on accurate analysis of available information and the resulting insights.

This article will highlight some of the most common problems for Data-Driven Decision-Making (DDDM) and mitigation strategies to overcome these obstacles.

Obstacle 1: Lack of Data Quality

Most companies think that they have a lot of data, but the reality is that they don’t have enough data of good quality. Data quality is essential because it affects the accuracy of decisions, and inaccurate data can lead to wrong conclusions. In this context, poor data quality refers to data’s low accuracy, completeness, consistency, and relevance. It is a significant challenge for organizations that rely on data to make informed decisions.

Common causes of poor data quality

The following are common causes of poor data quality:

1. Lack of standardization: The absence of a uniform set of rules and guidelines for data collection, storage, and management. Without standardization, data may be inconsistent, leading to confusion and incorrect conclusions.
2. Missing values: This occurs when important data is not captured, recorded or entered into the system. Missing values can result in incorrect or incomplete analysis and decision-making.
3. Outdated Information: Data can quickly become outdated, leading to inaccurate or irrelevant analysis and decision-making. Organizations must regularly update their data to ensure its accuracy and relevance.
4. Unstructured datasets: Unstructured data, such as text, images, or audio files, can be challenging to manage and process. Data can become messy and difficult to use without proper organization and structure.
5. Lack of data governance: Effective data governance is essential to ensuring the quality and consistency of data. A lack of governance can lead to inconsistent and incorrect data and difficulties in tracking and controlling data access and usage.
6. Lack of data validation: The absence of checks and controls to ensure that data is accurate, complete, and consistent. Organizations may rely on incorrect or incomplete data without verification, leading to poor decision-making.

Strategies for improving data quality

Implementing data governance policies is one of the best strategies for improving data quality. These policies should include a framework for regulating data acquisition, use, storage, and disposal. They should also have data sharing, access control, security, and legal and regulatory compliance guidelines. In addition, organizations should establish standard procedures for the collection and management of data to ensure consistency and accuracy. Furthermore, organizations should implement data validation processes to detect errors and check the completeness of data before it is used for decision-making. Finally, organizations should regularly review their data architecture to ensure that suitable systems are in place to store, access, and manage data effectively.

Here are some common fixes for poor data quality:

• Ensure data is standardized, validated, and governed.
• Regularly audit and cleanse datasets to ensure accuracy.
• Establish procedures for the proper collection, storage, and use of data.
• Invest in automated tools to help monitor, identify, and rectify incorrect or missing data.

Obstacle 2: Insufficient Data Access and Analysis Capabilities

Data access and analysis are critical components of a successful data-driven decision-making process. Access to the correct data is essential to making informed decisions that positively impact the business. Performing accurate analysis or gaining meaningful insights may be impossible without access to the right data and analytical capabilities necessary to extract useful information from their data.

Common issues that organizations face with data access and analysis

These are the most common issues when we are speaking about data access and analysis obstacles:

1. Lack of data access: Poor access to data can limit an organization’s ability to make informed decisions. Organizations need appropriate access to the right data to analyze and interpret it effectively.
2. Lack of data integration: Integrating data from multiple sources is essential to gain a comprehensive view of the data. Without integration, organizations are limited to working with siloed datasets that do not provide an accurate picture of their data landscape.
3. Limited analytical capabilities: Organizations may lack the skills and tools to analyze data accurately and gain meaningful insights.
4. Lack of data visualization tools: Visualizing data helps organizations understand trends, track progress, and identify opportunities for improvement. Without these tools, gaining valuable insights from complex datasets is challenging.
5. Lack of benchmarking tools: Benchmarking allows organizations to compare their performance against industry standards and track progress over time. Without these tools, it is more difficult for organizations to measure the success of their decisions. Platforms like MoreThanDigital Insights will help to evaluate and compare relevant datasets.

Strategies for improving data access and analysis capabilities

Improving data access and analytics capabilities involves optimizing data storage, retrieval, and processing. Organizations should deploy solutions to make data more easily accessible across multiple platforms and locations. These include technologies such as ETL (Extract, Transform, and Load), databases, and middleware that help integrate data from different sources.

Next to tools also, staff should be involved to ensure successful data access and analysis. Organizations need staff with the proper knowledge and skillset to analyze data, interpret results, and make decisions based on insights gained from the data. Organizations should also invest in training programs that equip their staff with these skills or hire external experts when necessary.

Here are some common fixes for better data access and analytics capability:

• Implementing proper data tools to ease access to data and analytics
• Investing in analytical software and giving employees access
• Utilizing data visualization tools for easier understanding of the accessed data
• Establishing benchmarking tools (e.g., MoreThanDigital Insights)
• Developing a data-driven culture to ensure everyone sees the value of data and capability is built across the entire organization

Obstacle 3: Lack of Data Culture

A data-driven company culture is one in which decisions are made based on insights gleaned from data rather than relying solely on intuition or experience. This culture puts a premium on utilizing data to make informed, evidence-based decisions that ultimately lead to better outcomes for the organization. Unfortunately, many companies lack this culture and rely heavily on gut feeling and subjective opinion when making critical business decisions. As a result, they miss out on valuable opportunities to optimize their operations and maximize profits. A lack of data-driven company culture can be a significant obstacle for most organizations.

Common reasons why organizations lack a data culture

These are the most common issues why there is no data-driven company culture:

1. Lack of Leadership Support: Organizations often struggle to implement a data culture from the top down, as executives and senior management are often hesitant to embrace a data-driven approach. Without strong leadership support, it is difficult for organizations to implement and sustain a data culture. As such, organizations should ensure that their leaders are well-versed in the importance of data-driven decision-making and can effectively communicate this message across the organization.
2. Organization structure and hierarchy problems: Poorly defined organizational structures can be an additional obstacle to implementing a data culture. Without proper roles and responsibilities, it is difficult for organizations to ensure that employees understand why data is important and how it can be used to make informed decisions. Organization structures should be designed so that data flows efficiently and all stakeholders know their respective roles in the data-driven process.
3. Lack of Data Literacy Among Employees: A lack of understanding and appreciation for data within an organization can also prevent it from establishing a data culture. Organizations should invest in training programs that equip their employees with the skills and knowledge they need to utilize data effectively. Data literacy could include a combination of technical, software-related, and analytical skills.
4. Resistance to Change: It is also common for organizations to face opposition from individuals when implementing a data-driven culture. People may be hesitant or unwilling to accept the changes that come along with this shift. Organizations must recognize and address these issues to ensure a smooth transition and successful implementation of data-driven decision-making processes.
5. Lack of Data Governance: Without proper data governance, it can be difficult for organizations to access the data they need to make informed decisions. Data governance is crucial to ensure that data is appropriately collected, stored, and analyzed to maximize efficiency and utility.
6. Poorly Defined Processes for Collecting, Analyzing, and Utilizing Data: Without well-defined processes for collecting, analyzing, and utilizing data, organizations may not be able to take full advantage of the data they have available. Organizations need to develop transparent processes and guidelines to use their data effectively.
7. Lack of Reliable Data and Insights: Organizations may struggle to find reliable data sources and insights. Without access to high-quality, accurate information, it can be difficult for decision-makers to make informed decisions. Organizations should invest in data sources (internal, e.g., Websites, CRM and ERP) or external analytics providers (e.g., Gartner, Forrester, MoreThanDigital Insights) and tools that can provide reliable insights to enable better decision-making.

Strategies for improving and fostering a company culture for data

Every good data-driven company culture needs to build a data-focused leadership team that understands and acts on data and insights. Leaders should ensure that their organizations have the appropriate resources and personnel to make data-driven decisions. The leadership team should also ensure that data-driven initiatives are given the proper attention and support (maybe even priority). This would also include the creation of incentives for employees to use data in their decision-making.

To make a data-driven company culture work, it is essential to provide data literacy training to ALL employees. Organizations should invest in programs and training courses to teach employees how to interpret and act on data insights in decision-making processes. An easy trick is implementing KPIs and Insights into employees’ daily tools. e.g., display relevant KPIs for the person in their Intranet portal or send out daily/weekly automated data reports, so it becomes natural.

In addition, it is essential to encourage collaboration between departments and teams for data exchange and more. This can be accomplished by developing a shared understanding of how data can support business objectives and identifying and encouraging “data ambassadors” who understand the power of data-driven decision-making.

Here are some common fixes that help you build a company culture for data:

• Make sure that the leadership team is becoming data-focused
• Invest in training and education to increase data literacy among employees
• Creating a sense of ownership and accountability when it comes to data and analytics for every employee
• Identify and encourage “data ambassadors” who act as an internal voice
• Make Data a “new normal” by implementing KPIs and Reports it into intranets, dashboards, other reports, meetings and management decisions
• Encourage collaboration between departments and teams by developing a shared understanding of how data can support business objectives

Obstacle 4: Difficulty Interpreting Data Complexity

Analyzing complex datasets can be daunting, particularly for less experienced personnel. This is because of the sheer amount of data available, making it challenging to find patterns or make sense of them. To overcome this challenge, organizations should invest in training and data visualization tools that enable personnel to interpret complex datasets quickly and accurately. Organizations can also develop data-driven decision-making workshops or seminars that help employees better understand the importance of leveraging data for informed decisions.

Here are some common fixes that help you interpret data complexity:

• Invest in training and data visualization tools that enable personnel to analyze complex datasets quickly
• Develop data-driven decision-making workshops or seminars that help employees better understand complex data
• Leverage “Data-Ambassadors” who can act as internal “Translators” for other employees
• Consult with external experts on how to present better or organize your data to reduce the complexity
• Evaluate if the complexity is needed and find simpler solutions if necessary
• Regularly check in with your employees if they experience complexity and difficulty – Get feedback fast and often.

Conclusion

Organizations must address the common obstacles to data-driven decision-making to foster a thriving data culture that leads to better decisions, faster results, and less friction. Leaders should ensure that their organizations have the resources and personnel dedicated to making data-driven decisions while also providing employees with training and education on interpreting and acting on data insights. Additionally, collaboration between departments and teams can be encouraged by developing a shared understanding of how data can support business objectives and identifying “data ambassadors” who understand the power of data-driven decision-making and communicate it internally.

By addressing these issues head-on, organizations can create an environment where everyone understands how vital using data is when it comes time for them to make decisions.