Making Data-Driven Decisions During an Economic Downturn

The first four months of 2023 have already claimed more positions in the tech industry than the whole of last year. Repercussions have reverberated across other industry verticals, signaling an economic slowdown that should continue through 2023. Although these circumstances are reminiscent of the Great Recession of 2008 or even the dot-com bubble burst in 1999, the current economic outlook is not nearly as dire. Many business leaders nonetheless adopt a proactive approach to brace for an economic crisis.

To navigate the economic downturn, business leaders are exploring better ways to use data to drive important business decisions. Key areas of interest include financial forecasting, risk management, cost optimization, business resilience, and competitive analysis.

One can argue that these objectives share an obvious and common priority among business leaders regardless of economic circumstances. However, many VC-led startup firms and large enterprises tend to prioritize growth and scalability over resilience and sustainability. And when an economic downturn hits, these organizations undergo drastic cost-cutting measures, including mass layoffs to ensure business continuity. Technology companies are often forced to let go of personnel leading critical positions in their data technology departments.

In short, many businesses take a short-term view of business resilience and sustainability. However, by enhancing the technological capabilities to identify and absorb economic stress through data, businesses can maintain critical functionality and prepare for any unexpected financial hurdles.

Painting a Bigger Picture

Accurate financial forecasting and cost optimization require a comprehensive view of business metrics and KPIs. Instead of applying traditional and resource-intensive efforts to data collection, processing, and analysis, new practices have emerged that offer a bigger picture with far less effort. 

Now, business leaders can capture useful information to guide them in making the right business decisions. These technologies can help businesses transform raw data into practical insights, empowering users of all technical backgrounds with advanced analytics while still complying with stringent security and governance policies.

In the technology industry, progress often depends on agility and market disruption. By looking beyond traditional data systems, business leaders can capture insights from all sources and in real-time.

Creating an Effective Data Strategy 

The solution lies in streamlining your data pipeline so that your system can efficiently ingest and process real-time data streams from multiple sources. This allows you to scale the data platform without running into bottlenecks that require manual reconfigurations every time you acquire new data streams.

Data structures, data quality, and workflows limit traditional data warehouse systems. In contrast, an advanced data lake system allows users to ingest real-time data streams. The centralized data repository of the data lake system enables consistent data governance and quality standards.

Additionally, businesses must isolate data assets so relevant data users across the company can access and consume information with a strong yet flexible management system. Access management controls such as Attribute Based Access Management (ABAC) will drive adoption for large-scale data platforms.

A data lake system can dramatically reduce reaction times since users no longer need to perform manual configurations. This means that business leaders and teams can identify opportunities with these new information sources.

Bracing for Unpredictability 

It’s important to note that this goal of making data-driven decisions is a moving target: the economic circumstances evolve continuously, market conditions and user behavior become unpredictable, and business organizations have little time to respond. An automated data pipeline and a scalable data platform can help businesses create continuity and resilience to overcome the adverse effects of an economic slowdown.

Looking to strategize your Data-Driven Decisions? Learn how Mactores can help you.