Amsterdam Data Collective helps organisations in becoming data-driven. But what do we mean by a Data-Driven Organisation? Why become a Data-Driven Organisation? And how to become a Data-Driven Organisation? Rik van der Woerdt, Co-Founder and Managing Director of Amsterdam Data Collective, explains it to you in three short videos.
- What is a Data Driven Organisation
- Why become a Data Driven Organisation
- How to become a Data-Driven Organisation
1. What is a Data-Driven Organisation
TRANSCRIPT Amsterdam Data collective helps organisations become data-driven. What is a Data-Driven organisation? Data-driven organisations gather and use (big) data to make better decisions. This does not mean that it is a data company such as Google or Facebook. So, what do they do differently? First of all data-driven organisation gather and store the right data which is called data engineering. Using advanced analytics such as econometric modeling or artificial intelligence, this data is then analysed and the predictions interpreted to create actionable insights. This is where the real data science takes place. But insights alone are not enough. Data-driven organisations act on these insights to make the best decision every time.
2. Why Become a Data-Driven Organisation
TRANSCRIPT Why become a data-driven organisation? Not every decision requires advanced analytics or artificial intelligence. Some decisions are just best made based on intuition. At Amsterdam Data Collective we consider three types of decisions perfectly suited for advanced analytics.
Efficient Decision Making
The first example: efficient decision making. This is a typical case for recommender systems, so think about Netflix that wants to recommend which movie to watch next or eBay that wants to suggest which other products you might be interested in. In such a case it is impossible for a human to make this recommendation every time by hand. This is where automation and advanced analytics is very handy to make a prediction of what that person will like.
The second example: processing complexity. Imagine that you are the prime minister of a country in the midst of a pandemic. And you need to formulate the right policy, in such a case you do not want to make any decision lightly. You want to have as much information as possible. Who is vaccinated? What is happening to infections? Are people in hospital? Do these people in hospital end up at the ICU? And many more metrics that can help you make an informed decision. In such a case, when you need to process so much complexity, advanced analytics and data-driven decision making is the only way to go.
Compliant Decision Making
The third example is compliant decision making. This is the case when an organisations needs to comply with regulation. For example, a bank that wants to have capital in place to cover its unforeseen loses. It wants to have this capital in place, so it is a solid organisation. And it has to adhere to certain regulations. If this is the case, what you want is solid data and solid data-driven decision making to demonstrate to the regulator that you have done whatever you can to make a well-informed decision about your capital buffer.
So, these are three examples of when advanced analytics or data-driven decision making can be very helpful to your organisation. But is does not answer why you want to become a data-driven organisation.
Well, think about the examples again. Think about the bank who very accurately predicts how much capital it needs to hold to cover its unforeseen loses. In that case your business becomes way more predictable and thus more valuable to its shareholders.
Or think about Netflix, if you are a customer of Netflix and you get perfect recommendations, you will love the product. So Netflix will have happy customers.
Or for your employees in case you get all the information you need to make a decision, you will feel very supported. And if all the tasks that you need to do that are repetitive are automated you will feel way more impact from your work.
And, eventually think about the prime minister who has made the perfect decision about Corona policy based on the right information and data. We will all experience more wellbeing as a society and we will feel that we are treated fairly. So, being a Data-Driven-Organisation has an impact on shareholders, customers, employees and society as a whole.
3. How to become a Data-Driven Organistion
TRANSCRIPT How do you become a data-driven organisation? This is a topic surrounded by ample mystique. But, at Amsterdam Data Collective we take a very practical approach. Where we start with an organisation scan. In which we dissect your organisation into its core processes, and per process we assess what the data-driven potential is. And once we have done that, we start with the top process, the one that has the most potential, and we start developing solutions to make that process more data-driven. We do that in 4 steps.
Step one is identifying the use cases; we do this by applying the principles of design thinking. Step two is to work out the business case. Step three is to develop a pilot in which we develop a minimal viable product, so we do not go all the way out straight away, but we just develop the essential features to make sure that whatever we develop has indeed the potential which we thought upfront. And once the pilot is successful and we do indeed see that the application is going to make the process more data-driven and more valuable, we then go on with step four: implementation.
Redesigning your organisation process by process will have an impact on the organisation as a whole. On your people, your data infrastructure, your contracts, and on the way you communicate internally and externally. These four elements we call the organisational prerequisites. And when we redesign organisations, we make sure that each of these is lifted to the level where you are able to execute the processes in a data-driven way. And if you do so, and all your processes are up to the data-driven potential that we have identified up front, you are an organisation that is data-driven.