From Big Data to Better Decisions
Big Data has become fundamental to business decision-making, but how can you ensure that you continue to reach optimal decisions?
According to a study by 451 Research, 95 percent of IT decision makers expect Big Data volumes and the number of data sources they use to grow this year. However, as Big Data proliferates, organisations report that they aren’t equipped to maximise its potential. More than 85 percent of organisations tell Gartner that they are unable to exploit Big Data for competitive advantage. Many of these organisations have enormous amounts of data ready to be used, but they are unsure how to make the most of it.
A 360° feedback approach to decision making
Organisations in this position either lack the appropriate tools and analytics, or lack the processes to separate the signal from the noise. Many face working with inefficient processes that can lead to internal challenges and pressures, many of which can be alleviated by a managed period of transformation.
The best way for organisations to manage vast quantities of data is to implement a simple, repeatable process for making decisions. A methodology that works in any situation allows organisations to reflect on and learn from the data-driven insights derived, decisions made, and results achieved. FICO’s six-step framework for best-practice decision-making aims to create a full cycle with a feedback loop, so that every decision is better informed than the previous one, and incremental improvements enhance the process every time.
Here are those six steps:
- Codify the decision process and domain expertise so both can be easily examined, repeated and shared
- Record the decision and the factors and data that led to it
- Model the analytics used to make decisions, with models that can be managed and repurposed
- Optimise the models as business conditions and data change to ensure they deliver the results you want
- Adapt models so they can be applied to multiple decision scenarios
- Improve decisions by measuring results, evaluating successes and optimising further
These six steps sound logical – perhaps even easy. In reality though, correctly analysing available data and implementing a strong, consistent framework for decision-making can often be challenging. This is particularly difficult when dealing with legacy IT systems made up of several parts that have been variously integrated over the years.
Unifying decision making
This is what UK’s Nationwide Building Society set out to do: improve their decision-making platform to give their customers the best possible service. With 15 million members and more than £200 billion in assets, it is the largest building society in the world. Nationwide wanted a unified, customer-centric approach to decision-making across all retail products.
“By the end of 2017, we plan to have migrated all our retail credit products to the same decision-management platform,” said Andy Jackson, Head of Secured Credit Risk at Nationwide.
In the past, the building society was tied to a single credit bureau, but now it has a multi-bureau system that provides better data so Nationwide can switch providers on a customer-needs-basis and provide better, more flexible customer service.
Andy Jackson added “This approach to decision making has proven successful for Nationwide. In the first few months following implementation, we achieved a consistent view of all customers, regardless of the product they were applying for; an increase in loan application acceptance thanks to better data insights; and a shorter time-to-market for new and updated products. In addition, data from multiple credit bureaus has helped us in building a more holistic view of each customer.”
By implementing thorough methodologies that make the most of the information available, organisations like Nationwide Building Society can manage the growing levels of Big Data and ensure they continue making the best possible decisions.