Even though businesses worldwide were increasingly adopting business analytics, artificial intelligence and agile delivery methods in their business practices before COVID-19 struck, the process has surprisingly accelerated post the pandemic.
Business analytics, widely known for its diagnostic, predictive and prescriptive prowess, has gained tremendous traction in the last year as governments and healthcare institutions embraced this progressive approach to overcome organisational obstacles and provide long-lasting solutions.
As per Mckinsey, business analytical capabilities are projected to create $9.5 trillion to $15.4 trillion annual economic impacts across nineteen industries worldwide, of which 40% can be credited to AI implementation.
This article will analyse the scope of business analytics in India and shine a light on how business leaders have updated their approach towards business decision-making.
Let’s first understand business analytics and look at the questions analytical techniques seek to answer.
What is Business Analytics (BI)?
Business Analytics is the iterative and systematic analysis of a company’s statistical data to gain insights into the past performance records, ongoing business operations, and industry trends to foster strategic planning and data-driven decision-making capabilities and drive the growth of a company.
Business Analytics is an investigative approach that seeks to answer the what, why, when and how of business operations.
1. Descriptive Analysis: Uses historical data to recognise trends, inconsistencies, or patterns used to profit an organisation.
2. Diagnostic Analysis: It is the analysis of an observed event to understand why it took place. It usually involves conducting test hypotheses to draw fact-oriented conclusions.
3. Predictive Analysis: It is the interpretation of information to forecast potential outcomes and improve risk assessment and management.
4. Prescriptive Analysis: It usually involves testing and comparing outcomes to determine which has the potential for success.
Businesses employ business analytics as navigational tools to solve potential problems, streamline existing operations and invest in solutions that are most likely to assist in scalability and progress.
Scope of Business Analytics
As small to medium and large size businesses tap into the problem-solving prowess of business analytics, some business operations sections stand to benefit more than others. Forecasting demands, risk assessment, identifying potential disruptions in the supply chain, and providing support in crisis times are just a few scenarios where business analytics has proven to be a boon in India.
To that end, we estimate the scope of business analytics is poised to tremendously impact the following business scenarios:
1. Customer Experience: Quality consumer experience is key to ensuring smooth business operations. By gaining a deep understanding of what type of customers frequent your business and what their purchase habits are like and studying their behaviours, companies can tailor their services to achieve customer gratification and ensure their loyalty to the brand. Business analytics provides businesses with this possibility and allows them to personalise their products and services to cater to customers.
2. Inventory Management: businesses can streamline supply chain processes and reduce overhead costs. Business analytics provides an understanding of the frequency and timing of orders, which products are in demand and how poised a company is to serve those demands, strategically planning their supply chain operations. It also provides businesses with the capability to scale their services sustainably.
3. Sales and Marketing: Companies can study customers’ reactions towards their marketing campaigns and product offerings to create targeted campaigns and identify the most effective cross-sell and up-sell opportunities. It involves investigating the age demographic a consumer falls into, their average income, what motivates them to make purchases to predict patterns, and trends in their purchasing behaviour. This helps businesses focus their product messages and launch timings to suit their customers’ requirements.
4. Hiring and Recruitment: Companies are keen on associating with HR officials with a background in data analytics and business intelligence. This ensures that HR specialists can analyse data to onboard skilled and professional employees who contribute to a company’s growth. It also helps save companies hiring and training costs.
5. Finance: Big data and business analytics allow companies to handle their finances more effectively. Insights on marketing spend, and a comprehensive view of incoming and outgoing transactions can help businesses improve their business decision-making abilities, so they allocate their resources more efficiently. McKinsey & Company’s study showed that an integrated analytics approach towards marketing expenditure could free up to $200 billion worldwide.
Future of Business Analytics
A business-focused approach to analytics has allowed companies to update the relevance of their product offerings, helping them maximise reach, discover business opportunities and tap into new revenue streams. It has also helped businesses provide optimised solutions to consumers, thereby enhancing customer experience.
Take Walmart’s search engine for example, that at one point during the launch of NBC’s latest House season was witnessing a significant number of “house” related searches. Since the results displayed were based on Walmart’s internal data, including household items, doghouses, etc., customers who came to buy CD/DVD sets of House would abandon the check-out process without completing the purchase.
Walmart noticed this increase in the ‘shopping-cart abandonment’ rate and successfully employed business analytics tools to reduce it by 10% to 15%. which was done with the help of external data from other search engines, including Twitter and Facebook.
This is a common trend all over the world. Tech giants like IBM, Cognizant, and KPMG invest in analytical technologies and tools to yield ground-breaking results and drive unparalleled performance.
This favourable attitude towards business analytics is one of the key developments in India, and businesses of all sizes are looking to connect big data to business intelligence to attain distinction in their respective industries.
To that end, here are the changes we can expect to see in future:
- AI, Machine Learning and Big Data implementation will play a huge role in providing quality services and ensuring business progress.
- Data quality management is poised to become a crucial digital trend.
- As consumers become more conscious of privacy and receptive to personalised services, business analytics will pave the way for better and secure customer experience.
- Predictive and prescriptive analytical approaches will force companies to rethink traditional models favouring unconventional technologies that increase sustainability and chances of success.
- Business analytics is expected to significantly impact marketing, sales, customer experience, finance, risk management, HR, and social media practices, among others.
- Business professionals with an in-depth understanding of business analytics are better positioned to be industry leaders. They will have an edge in addressing short-term challenges and fulfilling long-term goals by constantly updating their descriptive and predictive analytical models to eliminate uncertainties and tap into new business opportunities.
- Certifications in business analytics courses will help business professionals attract favour from top companies in India and bolster their success chances. Equally valuable will be degrees in Data Science, and Machine Learning and Artificial Intelligence.
Adopting a Data-Oriented Mindset
The COVID-19 pandemic has demonstrated that expeditious changes are both necessary and possible for a business’s sustainability. Companies that rely on fact-based insights to develop a vision for the future and are quick to adapt to evolving technological standards have the potential to be industry leaders.
To survive and thrive in a competitive environment, business professionals must invest in proven solutions and constantly upgrade their skills to stay ahead in the race. They must be able to analyse data and deduce profitable conclusions from it to strategise effective business plans. And a Master’s Degree in Business Analytics from a reputed university can bring you a lot closer to these goals.
If you are looking to incorporate business analytics and intelligence into your skills set, upGrad x Michigan State University’s online Business Analytics program can help you. With uninterrupted access to world-class faculty and advanced technologies for six months, you stand to gain an undeniable competitive advantage that will benefit both your company and your career.