Business Strategy and the Importance of Data-Driven Decision Making Essay

Good close making is arguably the more or less consequential skill a successful bus can possess, but the strength to absorb intellectual closes on an on-going basis requires non only knowledge and experience, but also the proper(a) entropy. In fact, Garrison, Noreen, and Brewer (2012) identify intelligent, data-driven decision making as a furrow leaders most canonic managerial skill.That basic skill plays a diminutive voice in helping a manager mull and execute a successful military control strategy. Managers need access to pertinent historical data and projections to get at intelligent, fact based decisions. The expenditure of credit line cognition and analytics has become the cornerstone of strategy formulation and execution across corporations around the globe. Access to relevant data is a necessity in not only formulating a origin strategy, but in supervise the execution of that strategy.The apply of data for effective decision making is not a new con ception, but since the introduction of the equilibrise carte by Robert Kaplan and David Norton in 1996, the use of data to support decision making has taken off. In addition, the adoption of alter technologies has accelerated the use of data-driven decision making. Whether its an operations manager monitoring get word operational indicators or a sales manager forecasting sales revenue, appropriate data and the technologies which modify its most effective use, are key necessities in making intelligent and timely decisions.Formulating and executing a melodic line strategy is a basic requirement for just about any subscriber line, but making best decisions is the difference between a successful business sector and one that goes bankrupt. The key to making those intelligent decisions that aid in the formulation and execution of a successful business strategy is the use of data to support those decisions. As an encore to their balanced scorecard concept, Robert Kaplan and David Norton (2001) describe how to successfully execute a business strategy by creating an organization where everyone is focused on strategy.At the heart of their approach was their original balanced scorecard which provides a unofficial of relevant data for managers. In their next book, they expand their original concept by making strategy a priority for everyone pertain in the organization (2001). Although, Kaplan and Norton focused on business strategy, what they really succeeded in doing was pose data at the heart of every business process in every organization that adopted their approach. They alterd data-driven decision making as a by-product of designing a successful mechanism for executing business strategy. Kaplan and Norton understood that having access to relevant data was the key to successful decision making.Since Kaplan and Norton, the use of data-driven decision making has expanded. Today, aggregating, displaying, and analyzing data is referred to as business wisdom and analytics. Laursen and Thorlund (2010) contend that the deployment of business analytics and a business strategy are tightly linked. Analysis of important data sources and methods are a vituperative serving of overall strategy development and decision making (2010). Today, successful business leaders not only recognize the use of data to set out effective decisions, but they demand it. Although companies are capitalizing on the use of business give-and-take and analytics today, its clear the use of data as a tool for decision making had its roots in Kaplan and Nortons balanced scorecard (1996).The balanced scorecard concept was originally proposed by Kaplan and Norton (1996) as a way to measure a companys mathematical operation and execute the company strategy. It was an improvement on the traditional method of utilise financial musical arrangements to track performance (1996). Kaplan and Nortons balanced scorecard became the norm for not only measuring performance, but also as the favourite(a) method for executing business strategy (1996). Although the use of data was naught new in business, the balanced scorecard gave way to an era of using data for making critical business decisions. I have been involved in business meetings for a number of years with business leaders from operations managers to senior executives.Each meeting from operations reviews to performance or strategy always includes the review of some form of scorecard with critical business data. Simply adopting the balanced scorecard approach is not adequate though. Managers must choose a method for implementing the approach that is efficient and gets the right data to the right people when they need it the use of business intelligence can accomplish this goal (Paladino, 2008). Businesses have recognized the value of critical business intelligence, but some have taken the approach a step further. The most successful companies have adopted helpful business intelligence technologies available today to optimize the use of the balanced scorecard approach.Leading business intelligence tools on the market optimize the use of data for intelligent decision making by taking volumes of data and making it easy to access, organize, and augment to quickly fit the needs of the business. These enabling technologies allow a company to efficiently use data to formulate and execute a hefty business strategy. Business Intelligence offerings from SAP, IBM, Oracle, and Microsoft comprise more than half of the tools available in the market and are frequently tailored to specific industries (Henschen, 2012).For example, iLog is a business rule management system product from IBM that enables an insurance policy company to build a list of business rules that make a decision on whether or not an various(prenominal) is approved for coverage based on user input (IBM ILOG, 2009). An somebody enters all pertinent information into a form on the insurance companys web site (powered by the ILOG product), and a decision based on coverage is immediately provided. An insurance company whose business strategy outlines process and operational optimization and improving customer eruditeness is better positioned to execute that strategy with such(prenominal) a product. ILOG however is geared toward a more specific purpose.The more common business intelligence technologies take volumes of company and market data and organize it in such a way that provides a summary of valued business indicators. These technologies enable managers to make more informed decisions by having the right data quickly available.Intelligent decision making is a complex process that requires a combination of experience and intuition, but most importantly, the use of the right reinforcement data. The formulation and execution of a successful business strategy requires managers to make a number of intelligent decisions. Having access to relevant data to make those intelligent decisions is the ke y to success. Integrating the balanced scorecard into the heart of a business management system as outlined by Kaplan and Norton (2001) is, in fact, a way to integrate data into every business process within an organization.More recent business intelligence and analytics technologies have do adopting these methodologies much easier for businesses. Managers are finding that an investment in enabling technologies yields crucial financial results through efficiency and optimization. There is a common part that exists within any organization that has developed and executed a sound business strategy. Within each business, you will find a manager or team of business leaders who recognized and implemented the use of data to drive their decision making.ReferencesGarrison, R. H., Noreen, E. W., & Brewer, P. C. (2012). Managerial Accounting (14th ed.). Boston, MA McGraw-Hill tuition Solutions.Henschen, D. (2012). Advanced analytics. InformationWeek, (1351), 7-15. Retrieved from http//sear ch.proquest.com/docview/1220681098?accountid=7083 IBM ILOG Solutions for Insurance. (2009, July). IBM Software Group Solution Brief. Retrieved February 18, 2013, fromhttp//www-304.ibm.com/easyaccess/fileserve?contentid=193615 Kaplan, Robert S., and David P. Norton. The Balanced Scorecard Translating dodge into Action. Boston, MA Harvard Business School, 1996. Print.Kaplan, R. S., & Norton, D. P. (2001). The Strategy-Focused Organization How balanced scorecard companies thrive in the new business environment. Boston, MA Harvard Business School Press.Laursen, G. H., & Thorlund, J. (2010). Business Analytics for Managers winning Business Intelligence Beyond Reporting. Hoboken, NJ Wiley.Paladino, B., & Williams, N. (2008). Moving strategy precedent Merging the balanced scorecard and business intelligence. Business Performance worry Magazine, 6(2), 12-17. Retrieved from http//search.proquest.com/docview/218349922?accountid=7083