How Data Drives Effective Decision Making

The New York Times ran a story, When There’s No Such Thing as Too Much Information, by Steve Lohr, that covered some of the value of using data to help with business decisions.  The article began with the challenge and opportunity provided by the massive about of information we have today. If organizations are not swamped by the sheer volume, there is a lot of value to be gleamed from smart analysis of the content.

The article then focused on research conducted by new research led by Erik Brynjolfsson, an economist at the Sloan School of Management at the Massachusetts Institute of Technology. Brynjolfsson and his colleagues, Lorin Hitt, a professor at the Wharton School of the University of Pennsylvania, and Heekyung Kim, a graduate student at M.I.T., looked at 179 large companies. They found that those that adopted “data-driven decision making” achieved productivity rates 5 to 6 percent higher than could be explained by other factors, including how much the companies invested in technology.

The Times article noted that Thomas H. Davenport, my former colleague and a professor of information technology and management at Babson College, made that point in his most recent book, with Jeanne G. Harris and Robert Morison,  Analytics at Work: Smarter Decisions, Better Results.

The drive to help companies find meaningful patterns in the vast amounts of content has created a fast-growing business intelligence (BI) industry. Major technology companies – IBM, Oracle, SAP and Microsoft — have collectively spent more than $25 billion buying up specialist companies in the field.

The Times quotes David Grossman, a technology analyst at Stifel Nicolaus, “The biggest change facing corporations is the explosion of data. The best business is in helping customers analyze and manage all that data.”

We are very pleased to se these research findings and commentary as making sense of content overload and finding patterns within it is the goal of the Darwin Awareness Engine™. 

 

Comments

[Paul aka pt at large]

Bill, my former student, Jeff Kelly Lowenstein, is a veteran reporter. He uses what he calls computer assisted reporting to collect huge amounts of data when he's working on in-depth stories, the data shapes the story, sometimes changes it. I sent him link to this post, thought it would interest him.

[bill Ives]

Paul

Thanks. I hope he finds it interesting. Bill