A potent instrument in the market nowadays is business analytics.
A recent survey by MicroStrategy found that businesses all over the world use data to:
- Improve process and financial efficiency (60%)
- Promote change and strategy (57%)
- Track financial performance and make it better (52%)
The study also reveals that 71 percent of multinational corporations expect their analytics spending to increase for the next four years and beyond.
Achieving a thorough appreciation of business analytics will help you progress in your work life and help you make wiser decisions at work in light of this trend.
Before exploring the data analysis benefits, it’s essential to understand the meaning of “business analytics.”
What Does Business Analytics Mean?
Business analytics involves using qualitative analysis methods to get meaningful data that can help make informed decisions essential to business growth. In other words, it involves gauging a business’s operational effectiveness. It helps assess both particular facets of a business and the broader organization.
There are mainly four approaches to conducting business analysis:
Using historical information to evaluate past events and ascertain their causes
This is the process of analyzing past data to spot patterns and trends
Using statistics to predict future results
The use of tests to ascertain which solution will produce the best outcome in a particular scenario.
One must choose which approach to use depending on the current business environment.
Business Analytics Evolution
Business analytics has existed for a long time and has developed as more technology becomes available. Operations research, which was widely applied during World War II, is where it has its roots. An analytical approach to data analysis used in military operations was known as operations research.
Over time, this strategy began to be applied in business. Here, the study of operations developed into management science. Again, the data, decision-making models, and other foundations of management science were the same as those of operation research.
Management science changed into decision support systems and business intelligence. PC software began to expand as businesses grew more and more competitive.
The Importance of Business Analytics
1. Making Smarter Decisions
Business analytics is a valuable tool when approaching a crucial strategic decision.
Uber, a ride-hailing organization, used prescriptive analytics to determine whether the product’s new version would be more efficient than its first version when it stepped up its COTA in 2018. COTA is a tool that makes use of natural processing language and machine learning to help agents enhance accuracy and speed when issuing responses to tickets’ support.
The company discovered that the upgraded product resulted in faster service, precise resolution recommendations, as well as greater customer satisfaction levels using A/B testing. This is a technique for comparing the results of two distinct choices. With the use of these insights, Uber was able to resolve tickets more quickly and at a fraction of the cost.
2. Increased Revenue
Analytics and data-driven projects can have a huge financial impact on businesses.
According to McKinsey research, businesses that make big data investments see an average gain in earnings of 6%, which rises to 9% for five-year investments.
According to a recent BARC study, which supports this trend, companies that do data analysis report an 8% rise in sales on average and an 11% decrease in charges.
These results demonstrate the unmistakable financial benefits of a strong business analytics strategy. Many companies will enjoy these benefits as the data market and big analytics expand.
3. Greater Operational Efficiency
Analytics is utilized to optimize corporate processes in addition to generating financial gains.
Many businesses and business management service providers like www.cbs-cbs.com/ now employ prediction analytics to foresee operational and maintenance concerns before they escalate into bigger problems.
An operator of mobile networks who participated in a study said it uses data to predict failures seven days in advance. With this knowledge, the company may better plan maintenance to avoid outages, reducing operational expenses while maintaining assets’ peak performance.
Business analytics has been around for a long time, and organizations have used it to make smarter business decisions, increase revenue, and obtain more operational efficiency. It’s never too late for you to start too.