Being data driven is basing desicions on facts (your data) instead of personal opinion. But data is nothing in itself, it has to be interpreted and used for a relevant purpose at a relevant time to add value to your business.
Data can be described as a meta-asset related to your company´s true assets, which are your customers, products, brands, employees etc. The data gives you information about your assets (customer behavior, products in stock, brand awareness etc), so that you can take informed decisions to increase the value of these assets.
Turn data into information
For data to be turned into information you first need to have a question to be answered. Based on this question you can select, refine and analyze your data and turn data values into information that can serve as decision support.
The quality of your data is vital. Using bad quality data (i.e. containing errors, inconsistent definitions etc.) will not give you information, instead it will make you misinformed leading to bad decisions and counterproductive actions.
Without purpose (questions to be answered) data is nothing but a great potential (if kept in your database) or a distracting noise (if used in reporting etc.). Presenting data without an explicit purpose is very common. I think you recognize it from reports you get sent to you (or send to others).
From information to knowledge
Taking advantage of information, discussing it, analyzing it and acting upon it, gives you knowledge. Evaluating the actions you take, based on your information, is what really brings a higher degree of knowledge about your business.
The best data driven organizations are able to spread knowledge within the organization and make it part of it´s structural capital. If so, the organization can base new decisions on previous learnings instead of moving around in circles. Simple in theory, difficult in practice.
Andreas Franson, andreas[@]internetintelligence.se, +46 733 56 41 51