You have been making decisions on the basis of your gut; it has never led you astray. Undoubtedly, you have been hearing this buzz about using data to make decisions around you. Can Data Driven Decision Making (D3M) be trusted? Is it worth all the hoopla surrounding it? Let us find out.
As the name suggests, D3M is literally making decisions based on the analysis of data or information. Primarily, the information that must be analysed has to be relevant and there has to be a sufficient amount to help you make your decision. We shall discuss more about the nitty-gritties later as we dissect this term further. The concept of D3M was born out of necessity. Today, any action by a human causes data to be generated. According to an article on TechnologyReview, in the year 2012, 2.8 zettabytes of data was generated. That is almost equal to 3 billion hard disks of 1 terabyte each. A one terabyte hard disk can store 250,000 songs. Mind boggling, is it not? Even if you were to deal with the smallest fraction of the human race, there is still too much data for a mere mortal to handle. Enter the concepts of Big Data and D3M; these concepts have perhaps single-handedly revolutionized the way we make decisions.
Surprisingly, the concept of D3M has been around for a really long time; organisations started using it as early as the 1980s. It is just the scale and corresponding technology that has evolved. It is best stated in an article by Pamela Wheaton Shorr back in 2003 where she states that making a decision without data is similar to flying a plane in the dark without any radar. She also states that using D3M makes sure that everyone is held accountable; in her words-â€œ there is nowhere to hideâ€ because the analysis of collected data can find out the most minute of discrepancies ensuring you do not lose any money to such irregularities.
Contrary to what many people believe, D3M is not that different from the methods that we have been using to make decisions. For starters, it is used all across the organization in different capacities as stated by Irving Wladawsky-Berger in this article on the Wall Street Journal. Henceforth, I aim to make it clear that D3M is an extension to the current intuition based decision making and not a replacement. As mentioned by several experts, every decision is made two times-
a.) Intuition: We make a decision on the basis of our intuition and past knowledge
b.) Data driven: Once data is available, we decide to continue with or forego the decision altogether.
The benefit of D3M is that you can combine these steps into one and get better value for the time spent in making that decision.
Even though it is not apparent, what we call intuition and belief are often a sum total of data. Our belief is born out of our past experiences; that too is data evaluated by our brain. So in essence when we talk about D3M, we have brought out the workings of our brain into the real world. Just like our brain, the D3M too has points which if not watched out for may cause incorrect decisions to be made.
In the discussion so far, I have tried to cover all the important details about D3M. The purpose of presenting even the possible issues above is to show you that this system is just an extension of what you have been doing till now. The benefit of D3M is that it gives you the ability to quantify your decision and you have absolute control over the decision making process. You do not have to take my word for it; just refer to the links provided within the article and make sure for yourself.
1. Decision-Driven Data Management: A Strategy for Better Decisions with Better Data (SAS White paper)
2. Other references mentioned inline
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