Data-driven literally means based on data; often it is referred to a decision-making approach, according to which decisions are based on empirical evidence. This type of approach involves data collection and analysis prior to decision making.
The opposite of data driven would be an approach of decision making driven by instincts, personal discretion, experience, or habits. Instead, when a company or an individual base a decision on empirical evidence, then the approach can be defined as “data driven.”
Nowadays, many companies choose to base their strategies and operations on data, which they collect — both internally and externally — and organize to better understand the market, their customers, and their competition.
Data driven decision making
What does it mean for a business or an organization to be committed to data-driven decision making? It means that, when someone’s gut feeling or experience leads one way, while the empirical evidence and research lead the other way, the decision maker will choose the latter over the former.
Data-driven decision making is usually applied to decisions involving a company’s branding, product features, product launch, advertising, event planning, internal organization, structuring, and so on. The effectiveness of this approach results in a spiked interest in data collection, data processing, data storage, and data analytics technologies. But while one might think that the more data an organization has, the better, it is also important to note that owning a dataset does not automatically translate into knowing what to do with it and how to extract useful information from it.