The Foundation of Data-Driven Decisions: Why Data Quality Matters

Abstract

The decision-making process relies on assumptions, premises, and background, all of which are directed by the objective linked to the choice. The backdrop and assumptions reflect external factors beyond the control of any decision-maker, whereas the premises and knowledge of the firm rely on our data. A prevalent conceptual error arises from the misconception between data and information, which are fundamentally distinct notions. In other words, we can collect data from several heterogeneous sources; yet, there is no guarantee that the data will be consistent, comparable, and traceable. This study discusses the significance of measuring and assessment in connection to data-driven decision-making. Subsequently, we outline the ramifications of intuition-driven decision-making and their potential societal consequences. Ultimately, a case study about the monitoring of business processes at the Autarchic Institute of Housing (La Pampa, Argentina) is presented to illustrate the implementation of principles associated with data-driven decision-making.