By Jim McNulty
Gone are the days when business decisions are made solely with your gut. In a time where technology allows us access to more information than ever before, the opportunity to minimize as much risk as possible is available at your fingertips. Data-driven decision-making is one major key. To some, this term may be a bit ominous, but once you understand the full scope of what this is and the benefits is has to offer your facilities, you’ll see it’s a no-brainer.
Data-driven decision-making is defined as using facts, metrics, and data to guide strategic business decisions that align with goals, objectives, and initiatives, versus intuition or bias. More and more companies are relying on data to help them identify challenges, capitalize on opportunities, and make timely decisions that affect their bottom line.
Meanwhile, we face a broken construction material supply chain and a labor shortage that may limit the amount of capital work getting done, even if one gets all the capital budget requested.
What’s Wrong With The Way I’m Doing Things Now?
Maybe nothing, but more than ever, owners and operators of today’s facilities face a challenging landscape of unvetted partners, pressure for greener solutions, and low bandwidth to make informed decisions. Most are working within constrained budgets against expensive operations all while making decisions without consistent analysis of on-site conditions across a portfolio of facilities. This combination is leading to wasted money, resources, and time. Dozens of vendors are lacking in-house project management availability, while asset consultants are delivering piles of paper that are neither actionable nor relevant. Data-driven decision-making can solve these problems using web-based applications and other tools to give better insights.
Many businesses today are still operating in a “break-fix”, reactive cycle, meaning an asset is only repaired when it is required. Businesses are then forced to spend dollars on a time and materials basis for a problem that could have been avoided using predictive analysis which creates opportunities for lower-cost solutions. This “squeaky wheel gets the grease” approach also applies to the way many businesses handle capital budget and project approval requests: whoever is the loudest gets what they want when it may not always be the best or most profitable decision. Data-driven decisions eliminate any favoritism or unfair advantages in the workplace, creating a process that allows for full transparency and accountability.
Who Is Currently Taking This Approach?
A recent Harvard Business Review study, “The Evolution of Decision Making: How Leading Organizations Are Adopting a Data-Driven Culture,” found that companies that rely on data expect a better financial performance. The study, which surveyed 646 executives, managers, and professionals from all industries around the globe, discovered that many corporations are integrating data capture and analysis into their decision-making processes to deliver those expected financial outcomes.
If you’re not convinced of the benefits that data-driven decision making has to offer, look no further than the businesses you are likely using on a regular basis. Companies such as Amazon, UPS, and Southwest Airlines are all shining examples of what this change can do for your bottom line.
Amazon offers recommendations based on past behavior. By integrating recommendations into nearly every aspect of Amazon’s purchasing process, from product browsing to checkout, the company has found that product recommendations, in fact, do drive sales and increase the bottom line.
UPS tracks speed, direction, traffic updates, weather, and other driver metrics, and designs the most effective routes for its 46,000-strong delivery fleet. Because it incorporates real-time updates, drivers can make better route choices and deliver more packages instead of wasting time in traffic. It’s no secret that airlines use data to track customers’ luggage, personalize customer offers, boost customer loyalty, and optimize their operations.
At Southwest Airlines, executives are using customer data to determine what new services will be both the most popular with customers and the most profitable. Southwest has found that by observing and analyzing customers’ online behaviors and actions, the airline can offer the best rates and user experiences. As a result, Southwest has seen its customer and loyalty segments grow year after year. These success stories are not restricted to global business either, small businesses have a unique opportunity to implement data-driven decisions from the ground up, allowing for growth at a much quicker speed.
What Outcomes Can I Expect? How Do I Get There?
Few factors influence operations like data-driven facilities management. In the digital age, when Facilities Managers make informed, cost-saving decisions through data-driven facilities management, total cost ownership decreases. – Cushman Wakefield 2018
Where is the data? If you can’t see it, it could just be trapped. Getting good data typically isn’t very hard or expensive, and chances are that you already have useable data that is stuck in disparate systems. Uncovering what you have and centralizing what you have (along with warranties, past assessments, construction docs, etc.) can provide you with a data set for analysis and insights.
How do you get there? It’s not effortless but it is straightforward.
The Five-Step Process for Leveraging Data-Driven Decision Making:
- Have a vision: Just like your car, teeth, and house, facility assets don’t last forever. You understand a $500 problem today can easily become a $10,000 problem in just a couple years.
- Create and communicate the connection between data and facility operations: Data needs to be incorporated into the overall culture of the organization.
- Change the common misperception that data is only for techies: If you’re not exactly a numbers person, the term “data” may seem to be out of your wheelhouse. We need to make data more approachable in a business perspective.
- Prove that data can benefit each department of the organization: Creating a data-driven culture that ties into the organizations mission is crucial to its success.
- Enable different members of the organization to interpret data, not just your IT department: Insights need to be reviewed on a much wider level allowing for IT to focus on the security and functionality of these systems.
Data Is At The Core
Data-driven decision making is not successful solely through gathering data; it all depends on the business owner or facility management team using that data intelligently, like buying the right work at the right time. In doing so, you can improve business processes, save money and resources through proactivity, increase asset performance, and keep customers for longer, resulting in increased revenue and profit. Data-driven decision making is vital as it enables us to observe data in real-time to come up with predictive insights. It provides the ability to research and know what is working well for the business and what is not. Data ultimately forms the central part of the organization and therefore represents the best possible perspective from which to form business and operational decisions.
Article originally appeared on Facilty Executive.
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