I am big about making “data driven” decisions. I have written in the past as to how wiring your product can help you make data driven decisions. You cannot make the right decisions unless you know what is happening in the market, in your product. Data can be collected in a myriad of ways – listening to customers (one of my favorites – talk to real humans who use or will use your product/service), analyzing usage (web analytics, product usage metrics), win/loss analysis (again talking to humans to understand why they bought and why they did not), conversion analysis (who bailed out vs. who put money down etc.). 
There are companies that don’t collect data. But there are a whole lot more companies that collect a lot of data. Unfortunately, they find that no one analyzes the data or the large volume of data is not what they need to help them make decisions. Just like how one says that a wrong decision is sometimes better than indecision, to me having no data is better than a ton of worthless data. At least you are not going to spend time analyzing the worthless data and draw wrong conclusions.
The sole purpose of data is to create “actionable” information that will allow you make decisions that will move the needle – increase in revenues, improved profitability, faster performance, higher customer satisfaction or whatever business metric you care about. But what I find is that many companies collect a lot of data, but none of it is actionable. It is almost like someone said “we need data” and someone ran and collected whatever he could.
So next time you or someone you know is going to start a data collection exercise – here is what I suggest – pause, take a deep breath and ask yourselves three simple questions:
- Why do I need this data – meaning what decision am I looking to make?
- What is the right question I should ask that will get me the “actionable” information? Make sure you phrase the question right.
- How many people do I need to collect it from before I can call it trustworthy?
Make sure you have solid answers to questions 1) and 2) and if you don’t, drop the data collection project. Yours truly is also guilty of this rush to go and collect data. Surveys especially are not easy to do – hence put in the right amount of time to make sure you ask only the needed questions (and phrase them right!) to get the right information to make the right decision.
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Software Product Manager by Gopal Shenoy 
Gopal,
These are 3 good points to remember. Before creating surveys (for example), I like to ask those involved — What are the objectives of the survey?
It’s often interesting to hear the responses as many times it’s unlikely that the data collected from the survey will deliver on the stated objectives. The 3 questions you list answer (literally) the Why, What and How questions that are so often ignored.