The use of social networks, cloud computing and other technologies has enabled companies to acquire, store and analyze massive volumes of high-quality data. However, all this information will mean little to an organization that doesn't make exceptional decisions based on its evaluations. Big data, even with all its promising qualities, can prove to be harmful to companies that don't incorporate their findings into complex decision-making processes, according to a Harvard Business Review report by Corporate Executive Board.
Research by Corporate Executive Board found that there are three types of decision-makers in the business world. The first two are those who trust examinations over their gut feelings, called "unquestioning empiricists," and those who solely make choices from emotions and disregard analytic tools, dubbed "visceral decision-makers." Finally, there is a combination of the two, classified as "informed skeptics." These individuals make informed conclusions based on a balance of test results, judgment and opinions from colleagues, even if they disagree, the news source said.
The latter is often equipped with the best logic to make knowledgeable decisions and is sought after by data-centric organizations. Unfortunately, only about 38 percent of employees and half of managers fall under this class, Corporate Executive Board noted.
The lack of data-savvy workers, however, isn't the only problem that businesses face in the advent of big data, the report said.
Companies often encounter an issue when IT departments are too focused on clearly defined technology demands. As traditional IT functions evolve in finance, human resource and other concrete number-driven departments, less consistent divisions of the organization often develop problems when trying to analyze non-concrete figures, Corporate Executive Board noted.
Additionally, sometimes managers know that important decision-making data exists but are unable to locate it due to accessibility problems. The proliferation of mobile devices, like smartphones and tablets, and the growing use of social media in the workplace have made it more difficult for organizations to acquire and analyze important data, the news source said.
According to a report by the New York Times, businesses are doubling their quantity of data every 1.2 years. This explosion of information is creating an enormous opportunity for firms that wish to improve customer retention and satisfaction. However, not all data is created equal and managers need to ensure they analyze the appropriate information if they wish to make informative and effective decisions.