In the past decade, thanks to the growing proliferation of smartphones and smart devices and the increasing adoption of Data Science technologies – AI, ML, Data Analytics, Business Analytics – the world has been churning out colossal volumes of data. And although we now sit on this data goldmine, raw data is of little or no value to us unless processed, analyzed, and interpreted. This is where Business Analytics enters the scene.
What Is Business Analytics?
Business Analytics focuses on analyzing large volumes of historical data using a combination of diverse technologies like information technology, statistical analysis, quantitative methods, and computer-based models to gain meaningful business insights.
Companies and organizations use these insights to make data-driven, actionable decisions for the future. While statistical methods help extract the relevant patterns from within large datasets, computer-based models allow business owners to visualize the performance of different strategies and decisions under varying scenarios.
In simple words, business analytics refers to the technique of employing different quantitative methods to extract meaning from data to make informed business decisions.
As such, by analyzing past performances and delivering data-oriented results, business analytics enables companies to prepare for the future. This is particularly crucial in the present age when every business entity is looking to optimize their decision-making process to achieve the competitive upper hand.
What’s great about business analytics is that it offers a wide range of applications suited to almost every industry such as customer relationship management, financial management, inventory management, and marketing, banking, supply-chain management, human resource management, to name a few.
Business Analytics involves three core methods
- Descriptive which interprets historical data to identify trends that can create value for a business.
- Predictive that leverage statistics to predict future outcomes.
- Prescriptive that uses a host of techniques to determine which outcome is likely to deliver the best results in a specific business scenario.
What Benefits Do Business Analytics Bring To A Business?
Here are the top seven benefits that business analytics brings to the table
1. It Promotes Informed Decision-Making
As we mentioned, business analytics is all about uncovering insights from raw data and using it to influence business decisions positively. When companies can analyze their past performances, they get to identify missed opportunities and subpar strategies. Accordingly, they can improve their ongoing campaigns and future decisions.
2. It Improves Customer Experience
The market is flooded with choices – the product/service you offer may be provided by ten other brands. So, why should a customer choose you? It all boils down to the quality of products and the degree of personalization you offer to your customers. Modern customers are all about products/services that are customized to suit their specific needs and preferences.
Business analytics can help you understand the purchasing behavior, tastes, requirements, etc., of your buyer personas. Equipped with this data, you can extend highly-targeted offers/discounts, campaigns, and products to your target customers, winning their loyalty time and again.
In the long run, the efforts you put into creating a unique customer experience boost the customer satisfaction factor significantly.
3. It Improves Operational Efficiency
Business analytics is one of the most vital tools for increasing operational efficiency. By analyzing the performance of your business processes, campaigns, marketing strategies, and business decisions, you can optimize the results.
In other words, analytics helps paint a clear picture of what is working for your business and what is not. This allows you to fine-tune business operations and processes for enhanced performance and higher returns.
4. It Increases ROI
Since business analytics enhances operational efficiency and improves decision-making, it inevitably creates new opportunities to increase the financial gains of businesses. According to McKinsey research, companies that use big data analytics witnessed a 6% increase in profits which can escalate to 9% provided steady investments are made in a five-year term.
5. It Helps Identify New Business Opportunities
The potential of business analytics is not limited to identifying opportunities to boost decision-making and operational efficiency. Companies can use analytics to conduct market and competitor research to find out untapped opportunities such as new markets, new customer segments, new product ideas, etc.
As new doors open, the potential to grow and earn more profits increases manifold.
6. It Doubles As An HR Tool
While AI and ML have already revolutionized the hiring process across the industry, today, many companies are using business analytics in HR management. Data analytic can evaluate employee performance and assess their job satisfaction and willingness to upskill/take on additional responsibilities, and so on.
This makes it easier for HR managers to determine the professional development of employees, make promotion decisions, and offer fair performance evaluations.
7. It Minimizes Risks
By enabling business owners to make informed decisions based on concrete data including performance, customer behavior, and market trends, business analytics minimizes risks to a great extent. This, in turn, not only establishes a company as a leader in the market, but it also saves it from incurring financial losses.
Why Study Business Analytics?
As an increasing number of organizations realize the potential of data backed by different Data Science technologies, the demand for skilled professionals is also rising. Any business failing to take the data-driven approach is going to fall behind in the race. However, be it AI, or ML, or business analytics tools, these will not deliver tangible results if a company lacks the right talent.
The global business analytics market continues to grow steadily as we speak, indicating that there’s a rapidly growing demand for certified business analytics experts.
In fact, business analysis ranked as one of the most in-demand skills of 2019. Unfortunately, the demand far exceeds their supply, and while this is bad news for companies, it is great for aspirants who’re looking to build a career in Data Science.
The proven pathway to entering the business analytics domain is by opting for a certification course or training program. For instance, the Global Master Certificate in Business Analytics is an excellent choice to broaden your domain knowledge and take your career to the next level.
Taught by expert instructors of the Michigan State University, this 6-month course will teach you how to use data insights to improve business performance, enhance decision making, and craft long-term development plans.
This course takes a holistic approach to business analytics by integrating business management, data engineering, and the natural sciences in the curriculum.
Apart from mastering the fundamentals of data analytics, you will learn how to use various analytical and statistical tools like Tableau, R, and Microsoft Access.
We hope this helps!