Most business leaders know that they need more analytics based decision making in their operations, however few have figured out how to obtain it as analytics software or engaging high priced consultants doesn’t suffice.
Businesses are challenged with endless streams of data of immense volume, variety and velocity coming from global marketplaces and from a multitude of social media platforms that didn’t exist until recently.
Per CHED, Business analytics is essentially about:
- providing better insights;
- particularly from extensive use of operational data stored in transactional systems;
- statistical and quantitative analyses;
- explanatory and predictive modeling;
- facts-based management;
- to drive decision-making for optimal results
Dictionary.com defines insight as “an instance of apprehending the true nature of a thing, especially through intuitive understanding.” Business Analytics allows a business to get the cause of something, to find an explanation or a reason that something has happened.
BA is also very useful to understand who, where, why, how and in what way customers interact with the business. BA lets us know who the customers are based on demographic breakdowns like age, sex, education level, etc. BA tells us how much of what product is bought, where the product is bought from, how often it is bought. And BA brings us insights into why the product was bought.
Business analytics has long been used to understand things like which sales person is the most successful or which market is the most profitable by looking at the operational data stored in the transactional systems of that business.
Just about every business has at least some basic way of calculating profit, validating inventory and measuring success. These transactional data points are generally housed in a data storage system that can be accessed to view reports. This is the core of business analytics.
BA gets a lot more insightful when business decision-makers have the ability to look at statistical and quantitative analysis of that data. Often this is not only done by the decision-makers, but by analysts who can dedicate more time to discovering, investigating and analyzing the data.
Businesses that are able to employ even more advanced analytics by using data models. In the hands of a good analyst, models allow one to quickly and easily adjust the analysis based on using different variables. Building models is especially important when working with large data sets or what’s called Big Data. Models also let analysts not only look backwards at what has happened, but allows analysts to look into the future.
When you look at any successful business, odds are that they have solid business analytics in place. The leadership team is generally provided with reports that allow a fact-based management of the business. As opposed to businesses that are run based on intuition or gut feel, businesses that invest in analytics generally make better decisions.
In the hypercompetitive global market of today, even the smallest and most simple businesses need some level of business analytics to be able to make smart choices to optimize results and be successful.