There was a nice column in yesterday's (4/24/2011) New York Times by Steven Lohr, titled, "When There's No Such Thing as Too Much Information." He cited a new MIT study which found that companies that adopted "data-driven decision making" had a 5-6% higher productivity than other companies. Erik Brynjolfsson and his colleagues surveyed 179 large companies and conducted follow-up interviews with some.
The researchers found that companies that not only collected but used data in decision making were the ones that benefited with increased productivity. They contrasted companies that made decisions based on data and those that made them based on experience and intuition.
It's great to see some empirical data that backs up a belief that I've held for a long time. When IT consultants implement data warehouses, business intelligence or analytics solutions, they often focus on the technology alone. They also need to look at the decision making process.
When we have implementthese solutions. We take a narrow approach, focusing on one key business process. we can then work with decision makers to make sure they have the data and tools needed to analyze performance data and make decisions. We do some of the preliminary data analysis to make sure that the managers understand what they are getting.
Analytics tools have been in existence for decades and are getting more powerful by leaps and bounds. We're just starting to see that organizations are using these tools to make better decisions and that these decisions are leading to improved performance. This is yet another example that it takes a while for management practice to catch up to the promise of technology.
I'd recommend the NY Times article as a good managerially-oriented summary of the research. It reinforces the important lesson that it's not the technology that matters, but how you use it.
Comments