Digital Transformation
Sep 7, 2023

Why organizations need to be data-driven

5 minutes

At Andela, we're inspired by the thought leadership present within our talent network, and wider community, and it's our mission to share these brilliant minds with the world. We invite Andela Community members to regularly showcase their knowledge and expertise in our Writer's Room blog series.

In this article, Abraham Enyo-one Musa, directs his insights to technologists who are - or aspire to be - leaders, and technical leaders who are looking to develop their knowledge of organizational data-driven culture.

Why organizations need to be data-driven  

Why is data necessary? Why should organizations seek to be data-driven - and how? These are the related questions I’ve heard business owners, executives, and employees ask in conferences, workshops, and knowledge-sharing events.

After pondering on some of the aforementioned questions, the inspiration to write came naturally, and I decided to share my thoughts in the best way possible. If you’re looking to understand what it means to be data-driven and why data is essential for every business, you’re in the right place.

What the heck does it mean to be data-driven?

The term “data-driven” means that an entity is oriented to make tactical and strategic decisions based on data rather than gut instinct, personal opinions, general observations, or pure hope. To put it simply, being data-driven means that an entity has the data it needs to make decisions that lead to outstanding, and hopefully profitable outcomes.

Becoming data-driven goes beyond installing  suitable applications and tools,  hiring a dedicated team of data professionals, committing to a significant data infrastructure investment, or running a one-off data literacy program — it’s about making data and analytics a fundamental part of your business strategy, organizational culture, processes, and throughout all echelons.

A data-driven organization is one that not only recognizes the importance of collecting raw data but also understands that they shouldn’t make business decisions using raw data alone. Instead, they collect, analyze and derive insights from data to address business problems, identify new growth opportunities, and drive profitability. In essence, data-driven organizations use data for several use cases, such as analyzing customer survey responses and demographics, observing customer behavior, purchase patterns, and more. Such enterprises have built a data culture that permeates the entire organization — not just within some functional regions or at the executive level alone.

Based on my experience as a data scientist, I believe that every organization generates data and can become data-driven, regardless of their business size, domain, and service offering (as long as they adopt the right strategies and do things properly). If you aren’t convinced that your organization is generating data, a good place to start would be to examine and think about every facet of your business, the kind of customers you have, what they say about you on different social media platforms, e.t.c. I bet that you’ll eventually discover possible data sources and valuable information you can start to extract, aggregate, and analyze to drive your business forward.

Why is data important for every business

Data is one of the most valuable assets for every organization. It’s a gold mine and a strategic, invaluable resource that has the potential to transform the world, enhance how we live, grow a business, and enable cheaper, faster, and better business processes.

Unlike traditional companies, data-driven enterprises don’t scale linearly, and I believe that one of the reasons giant companies like Google and Amazon always record exponential growth is because their business models are fundamentally built around data:

  • According to PwC, data-driven organizations can outperform their competitors by 6% in profitability and 5% in productivity.
  • This study also reveals that data-driven organizations are 162% more likely to surpass revenue goals and 58% more likely to beat their revenue goals than non-data-driven counterparts.
  • 81% of organizations also agree that data should be at the heart of all business decision-making.

Before you get carried away by the mind-blowing numbers, one key thing you need to always keep in mind is that data “just like untapped gold” in its raw form may not be very informative or immediately helpful. To get the very best out of your data, you need to collect the appropriate data and transform it into a reusable form. That said, the following are some important reasons every organization should start using their business data effectively.

Understand customer behavior and improve brand customer experience

We live in a world where products and/or services are countless, and your current/potential customers have several options about where to place their money. In addition, the competition between product suppliers has never been less tense.

One very strategic way to improve brand awareness and become relevant in your business is to understand what your customers say about you and their sentiments about your brand. But without data, it becomes pretty challenging even to know who your customers are, whether they like your products and services, or if your marketing strategies/campaigns are effective. In contrast, you can easily achieve all of these by rolling out customer surveys, reading social media comments/online reviews about your brand e.t.c

As soon as you gather data from your customers, you can analyze the data points to understand their pain points, what they think about your business, what products or services they’d like you to offer, what your organization needs to improve on, and more importantly, their willingness to choose you over a competitor. Eventually, the insights generated from customer feedback would be beneficial for customer care, cross-selling, and up-selling services, and/or product innovation. In most cases, I believe that business profits are closely linked to data-driven, customer-centric, and strategic business processes and decisions.

Netflix, for example, collects and analyzes customer data to see which kind of movies and shows are popular. Afterward, the company uses the insights gained to purchase similar scripts, assuming that subscribers would also like the new scripts based on their previous preferences. The company used this data-driven strategy to increase its business value by over $50 billion during the peak of the pandemic in 2020. Amazon also leverages consumer data such as browsing history, customer purchase, and preferences to fuel its product recommendation engine. This data-driven strategy generates around 35% of the company’s revenue.

Make better, informed business decisions

Decision-making is one essential aspect of every business that often involves several business executives, shareholders, and millions of dollars that business owners can’t afford to lose. With the right data at your disposal, your organization won’t have to make significant business decisions based on hunches, best-guesses, wrong assumptions, anecdotal judgments, or unsure consumptions — even in times of crises or stress. However, your business data will provide the facts, trends, statistical numbers, and insights you need to make informed, calculated decisions or understand performance.

I believe that every department in an average organization generates (or can generate) valuable data that can be used to either craft business strategy, drive growth and profitability. For instance:

  • Business executives need data to understand the more significant trends in their market, such as changes in manufacturing, shipping, or customer price sensitivity.
  • Product teams need data to understand how end-users perceive a product after launch.
  • Sales teams need sales performance data to understand and differentiate products that are selling well from products that are hard to sell.
  • Marketing departments need market segmentation data to identify customers who are more willing to buy from them and speed up the sale-closing process.
  • HR departments need people data to manage talents better and build more effective global, remote teams.
  • The list goes on and on.

By constantly collecting, monitoring, and analyzing business data, organizations become better positioned to make smarter executive decisions and develop winning ideas that impact the bottom line, leading to more growth or effective strategies. In essence, data-driven decisions better position you to manage risks efficiently and heighten the chances of success for your brand.

Measure Business Performance and Understand Employee Engagement

In addition to helping you understand customer behavior, improve brand awareness, and make better business decisions, analyzing business data also enables you to measure business performance, build more reliable, long-term hypotheses, and a very vibrant workforce. You can drill into business data to understand whether you’re meeting your most important business indicators or not. For instance, most professional teams today employ a team of data analysts and collectors to help support and improve player performance on the field using data.

By analyzing business performance data, you can also understand strategies that worked and didn’t work in the past, business decisions and/or policies that brought in the most return, business operations and costs that can be optimized, and other drivers of your business. Eventually, your organization can leverage all the insights to restrategize, reduce costs, improve your services, products, or how you nurture and attract leads. For hypothesis validation, some businesses consider randomized experiments such as A/B testing to test several variations of business decisions, analyze and figure out the alternatives or approach that yields better results.

Many organizations are so glued to the “customer is king” mantra that they only prioritize keeping their customers unique and happy. This is understandable because customers are central to the fate of businesses. However, my only advice would be that you should never overlook your employees because they’re as important as your brand:

  • Are your employees happy to work with you?
  • How are they coping with the new method of working?
  • Do they have all the tools they need to work efficiently?
  • Are they happy to work from home or struggling?
  • Do your employees still have good working relationships with their teammates?

The truth is that although these questions seem very simple and somewhat direct, only the right data can provide answers that’ll help you determine if your employees are facing specific challenges/limitations in the workplace that affect their drive, happiness, morale, or productivity.

“When your employees are happy, they’re more likely to build better relationships and make your customer happy Well, a happier workforce is closely tied to your organization’s ability to deliver better customer satisfaction and brand growth. By collecting and analyzing the right employee data and placing their experience on the same pedestal as customer experience, you become more proactive and better positioned to overcome employee unhappiness or disengagement.


Undoubtedly, data is central to any business. Its importance through every facet of business increases daily with the massive growth in Big Data and the possibilities good data offers. I believe that one of the best ways for organizations to position themselves, outperform competitions, drive innovation programs, and take market leadership over the next decade would be to use data in an innovative and creative way.

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