BUS607: Data-Driven Decision-Making

8a. Relate the consequences of improperly using or implementing analytics

• Why is data collection a crucial step in the research or marketing process?
• How are primary and secondary sources of data different?

Before there can be any data-driven decision-making, there has to be some data. This data is 'fed' into the system to help generate business insights and be collected from various sources. Data collection methods vary based on the purpose of the research, the availability of data, and its suitability for a particular use. As we've previously discussed, quantitative data and qualitative data are very different and fulfill specific needs.

Data collection methods are just as important as the collected data. Without a firm understanding of what is to be collected and how it is collected, the organization risks collecting incorrect or unusable data. Even though the actual data may not take place until the fourth step in the market research process, it needs to be an important consideration in the first step of Problem Definition.

Primary research data is data collected directly by the organization and could be prior purchase data or direct survey data obtained through their research processes. Secondary data is data collected or compiled by third parties that can be acquired by the organization. This includes Nielsen Ratings data, Gallup Poll data, or U.S. Census data.

To review, see Collecting Data and Data Collection Methods.

8b. Examine how organizations have benefitted from properly using DDDM to grow their business

• What are some sources of primary data to support an organization's DDDM?
• What are some sources of secondary data to support an organization's DDDM?
• What are the different types of data businesses collect for their DDDM?

Businesses collect a wide variety of data to help inform their decision-making. To be successful, they have to differentiate between the types of data, prioritize the relevance and determine how much is relevant to their decision-making process.

Primary research is usually data collected directly by the organization. Many times, it is used to fill in gaps found in secondary research data. The typical primary research includes:

• Interviews: conversations where one party asks questions of another either in person, over the phone, or over the internet
• Surveys: are written documents sent to individuals to complete and return
• Observations: the researcher watches and records the behavior of the research study participant
• Analysis: gathered data is examined and organized to reveal patterns or uncover trends

Secondary research is gathering information from other's primary research, such as journals, books, or other sources. Secondary research is usually less costly, more efficient, and less time-consuming since it is already developed by other sources.

Organizations typically collect five types of data for their DDDM efforts, including:

1. Business process data to continuously improve their operations
2. Physical-world observations of real-time data collected from radio frequency identification (RFID), wireless remote cameras, GPS data, etc.
3. Biological data such as facial recognition, retinal scans, and biometric signatures
4. Public data collected from the internet, instant messages, or emails
5. Personal data includes personal preferences, habits, pastimes, likes, and dislikes collected from social media sites

To review, see Types of Data Sources and Business Data.

8c. Analyze the key questions management must ask to determine the best decisions to make in response to an analysis result

• Why is it important to avoid bias when interpreting data for analysis?
• What are the components of a management information system?
• How does a management information system support the DDDM?

Before any decisions can be made from the data collected, it must be analyzed and summarized to be comprehended by the organization's management. To avoid bias, personal opinions should not be introduced into the decision-making process. Still, it is essential to interpret the analysis results in light of their impact on the organization. That is, does it make sense in light of the current situation? Blindly following the analysis can also result in making bad decisions.

The task of managing a company's information needs falls to the management information system, which is comprised of the users, hardware, and software that support decision-making. These information systems collect and store key company data and produce the information managers need for analysis, control, and decision-making.

To review, see Analyzing Data and Management Information Systems.

Unit 8 Vocabulary

This vocabulary list includes the terms that you will need to know to successfully complete the final exam.

• analysis
• business process data
• data collection
• interviews
• observations
• personal data
• physical-world observations
• primary research
• primary sources
• public data
• secondary research
• secondary sources
• surveys