Statistical techniques find extensive use in specialized production methods, improving organizational structures, and devising long-term strategies applicable to businesses. We use Practical Statistical Analysis to carry out a broad spectrum of practical applications using statistical techniques. Here’s discussing the various applications of business statistics:
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Management of Accounting Data
It is one of the fundamental statistical techniques in 21st-century business and economics. Using this strategy, a company’s financial information is maintained by accounting and bookkeeping. Skilled professionals track years of data with the help of:
- Statistical algorithms
- Data visualization tools
- Discrepancy Reports
Identifying Trends for Insights
Identifying upcoming trends and working proactively to prevent risks and increase profitability within a stipulated time is key to the dynamic success of a company. A company’s revenue can increase manifold if unforeseen changes are identified in time and preventive strategies are implemented accordingly.
In such cases, business statistics helps in:
- Generating better ideas and decisions applicable to the business.
- Identifying flawed departments and working on their improvement.
- Detecting early warning signs for problems that may arise gives a company the much-needed competitive edge in the market.
Performing Market Analytics and Research
A survey by the Harvard Business School revealed that nearly 80% of senior marketing executives are not satisfied with the measurement of marketing ROI. Statisticians can effectively solve this problem.
When combined with ultra-modern technologies of extensive data machine learning and Artificial Intelligence, business informatics and economics helps in researching the market and analyzing it. The overwhelming influx of data can be problematic for inexperienced handlers. However, trained business statisticians can provide much-needed insight to improve decision-making and steer a company’s operations in the right direction.
Data-informed marketing strategies are the need of the hour, where businesses are inundated with information coming from all sources through the internet. Every business owner wants to grasp lucrative opportunities and stay on top of disruptions to keep their businesses afloat. Proper research and analysis can boost their return on investment and maximize marketing efforts.
Mathematically tested decision-making abilities can improve operations and transform businesses over time. Business statisticians can analyze data and eliminate underperforming marketing strategies to make way for water-tight plans for businesses to flourish. They can also reduce unnecessary pressure on the staff and allow them to focus on new projects which can affect the company positively.
- Enhances overall scheduling efficiency.
- Aids in the analysis and forecast of sales.
- Facilities top-notch employee training and management.
- Allows realistic setting of organizational goals.
Importance of Business Statistics
The use of statistical analysis of data enhances the performance of businesses. It also helps to strategize future amends and provides insights into the drawbacks of existing working models.
Business statistics plays a critical role in bolstering the success of a company:
- It allows product comparison between businesses.
- It identifies flaws and deals with uncertainties by predicting general economic fluctuations.
- It measures variations in product performance.
- It enhances the effectiveness and efficiency of business units and sales teams.
- It analyzes the data of market research.
Limitations of Using Statistical Business Models
The sample size for statistical analysis of data is a significant factor. Inaccurate models cost customers unavoidable losses. When the sample size is too small, such a model might seem like a waste of money. Although there are certain limitations to the statistical analysis of data, researchers are working to eliminate them.
Business Statistics as a Career Option
According to US News and World Report, Statisticians are said to have the 2nd Best Business Job in the world. It is also the #5 Best STEM Jobs, with skilled professionals earning a median salary of $91,160 every year in the United States.
The remote working facility and high-earning potential of the job lure bright candidates into the field, promising them an excellent work-life balance.
The job market for statisticians is currently ripe with opportunities considering the significantly small number of people working in the field today. Furthermore, it is assumed that by 2028, the demand for trained statisticians will increase by 33%, generating thousands of vacancies and employment opportunities.
Economics and business statistics have emerged as one of the most viable career choices in recent times. Not only does it help businesses flourish, but it also provides a scope of mass recruitment and employment. With high salaries of $118,790, which nearly 25 percent of the best-paid business statisticians earned in 2019, a career in business statistics can be lucrative and rewarding. Not to forget, the flexible jobs it offers attract countless students from across the globe to direct their careers towards this rapidly growing industry.
With specific industry-related expertise and experiences, a job with a six-figure salary is not tough to land. The technical involvement of data analytics, big data, machine learning, and artificial intelligence also makes business statistics easy to pursue.
So, if you are eyeing a career in this field, we recommend joining upGrad’s Advanced Certificate Program in Data Science from IIIT Bangalore.
An everlasting demand for trained statistical experts will continue to exist for decades to come. So the sooner you start, the better.
Does business statistics have a future?
With the growth in internet data collection and storage, there has been an explosion of data. Computers cannot store the immense data overflow across industries. Assorting this data into segregated departments and utilizing it for the betterment of companies is essential for their survival. This is where business statistics comes in. We can see that as long as data-oriented working systems exist, business statisticians have a bright future.
What are examples of practical life business statistical usage?
Analyzed data fed into statistical business models in real-time scenarios provides solutions that organizations require. Examples of some such uses are:
1. Forecasting the sales of a company.
2. Estimating the number of equipment to buy for a factory.
3. Calculating salary hikes by keeping in mind the company's profit margin.
4. Increasing or decreasing production according to the market needs
5. Estimating volumes of data to be analyzed for annual audits
Is business statistics the same as data analytics?
Technically, business statistics is not the same as data analytics. We can say that a part of business statistics involves the usage of data analytics. This is because business strategizing and similar activities do not require data analytics directly. While data science involves coding and algorithms for an assortment of data, business statistics aims at providing insights specific to a business or company.