Know what you are talking about: The difference between Data-Informed, Data-Driven and Data-Inspired in a nutshell.

Today, data is commonly understood as an invaluable resource of information that can enable businesses to make the right decisions. In fact, more corporations and organizations sought to have data at the core of decision-making processes. As it should be. However, how data is used in the decision-making also matters. It can have an impact on the business and its trajectory.

So, how should data be used? There are three commonly mentioned approaches — ‘data-driven’, ‘data-informed’ and ‘data-inspired’ — terms that you may have heard being used interchangeably. But the difference is not just semantic. Let’s take a look at what they actually mean and how they can work for you.

Data-driven: decisions made based on cold facts

In a data-driven approach, data has the final say in the decision-making process. As the most rigid form of data use, there is no room for insight based on experience and gut feel.

Data-driven is best for answering business questions and ensuring any changes resulting from the outcome will not negatively impact the business.

Here’s an example where a data-driven approach will work: optimizing an ad campaign by determining the best time to release an ad, or the best design to use. Running A/B tests will offer results pointing to the best configuration for the ad campaign.

If you’re looking to validate, be data-driven.

Data-informed: decisions made based on data and the human insight

Being data-informed means that data is one of the many components in the decision-making process. Since data represents only a snapshot of reality, taking into consideration other sources of information like past experience, intuition, judgement and insight will allow decision makers to have a more holistic understanding of the business and make better decisions.

Data-informed is best when you’re working on a complex project that requires a number of inputs, or a project that requires creativity.

For instance, when building a new product feature, apart from product data, you need feedback from your users, your personal experience, stakeholder input and more. To further illustrate, a website designer would have to consider user experience, website data and so on, to create an additional feature that is not just beautiful but also optimized for its functionality. You’re sacrificing neither style nor function.

If you’re looking to innovate, be data-informed.

Data-inspired: explorations inspired by data

Unlike the first two approaches, a data-inspired approach is exploratory, with zero expectations on outcomes. Analysis produced by this approach draws entirely from intuition and inference based on data from different sources. The data will not have a definite direction about your design or strategy, but it does offer observed trends that can be used as springboards for ideation and innovation.

Let’s say you’re brainstorming ideas for the upcoming pitch presentation on a shampoo brand. You might find out that shampoo is sometimes used as substitutes for laundry detergent. Based on that trend, there might be ideas like targeting green consumers who look for more environmental solutions, or cash-strapped students who are just cash-strapped, or even proposing an outrageous laundry foam party. The possibilities are… endless.

If you’re looking for inspiration, be data-inspired.

So, data-driven, data-informed or data-inspired?

Being data-informed allows you to interpret the data while acknowledging and understanding its limitations. Being data-driven requires you to use the data as it is. Being data-inspired allows you to imagine possibilities based on interpretation of the data.

There is no one right answer, and ultimately, the right approach is dependent on the goals you are trying to achieve, and the type of data that you have available. And naturally, as your business evolves, so will your approach to data too.

At Sapera we work data-informed. Check out, how this approach transforms our services into something completely new: https://sapera.com/en/products

Further readings:

1. A quick read on how you can leverage on the different frameworks
2. Another quick read with the pros and cons of being data-driven and data-informed
3. An exposition of the data-driven, data-informed and data-inspired as buzzwords describing existing ideas