When there’s no such thing as too much information

April 26, 2011 | Source: New York Times Business Day

Companies that adopt “data-driven decision making” achieve productivity that is 5 to 6 percent higher than could be explained by other factors, including how much the companies invested in technology, researchers at the Wharton School have shown.

The study, based on a survey and follow-up interviews at 179 large companies, showed that data-driven decision making was defined not only by collecting data, but also by how it is used — or not — in making crucial decisions, like whether to create a new product or service.

The software industry is betting that data-driven decision making is the wave of the future, say the researchers. The drive to help companies find meaningful patterns in the data that engulfs them has created a fast-growing industry in what is known as “business intelligence” or “analytics” software and services.