How does Business Analytics Help Decision Making — Business and Companies
Big data is at the forefront of a lot of progress across various industries. If you haven’t already understood how it works to make businesses and organisations more efficient through its multiple processes, now is the right time to get in on it! And one of how Big Data can achieve this is through its strategic use in Business Analytics. If you’ve not heard of the term Business Analytics, don’t be worried — it’s very closely linked to a term that you probably have listened to — Data Analytics.
Data Analytics is analysing data through various methods, some quantitative and others predictive, to arrive at insight regarding the said data. So what is Business Analytics? Simple, it’s Data Analytics, but in service of business goals and towards making business decisions. Business Analytics, much like Data Analytics, can use historical data to make sense of current data, to identify patterns and predict which outcome is likely to occur (if at all) and at what time. Ultimately, it can give you critical insight into what will be the best outcome for your business — and in so doing, it becomes an indispensable tool, especially when it comes to making decisions that will result in profit.
As technology has slowly but surely spread beyond what we once thought possible, there are now numerous data sources and yet more ways to categorise and analyse them. Every person, device, or company produces nearly an insurmountable amount of data almost daily — this creates problems when it comes to its logistical storage. Businesses employ various means to make sure this gets sorted, among them cloud storage a key tactic. But beyond that, the more pressing concern is the talent required to sift through these mountains of data and discover the insight that will create a certain ripple across a function or branch of a business. Because that’s the beauty of data — it doesn’t just help out in one particular area, even though that’s how its effects are usually seen. It impacts one place, to begin with, and then slowly and steadily changes the system around which the data point was structured. Business Analytics, in particular, leverages Data Analytics to increase efficiency in terms of output as well as costs, and to understand whether the overall structural systems that are implemented are effective or not. In addition, Business Analytics can help with general strategic direction as well as with formalising decision making systems. As more and more organisations worldwide start to see benefits from investing in business analytics, more and more investments will flow into it, making it a lucrative career option for those who want to keep up with the contemporary modes of thinking.
What are how Business Analytics helps decision making in companies?
When we say that business analytics helps with decision making, it’s the same as saying that business analytics provides insight that can help the company decide the direction it will end up taking in the future. Some of the common ways in which business analytics has been utilised so far include increasing bottom line and profitability, delivering greater and more sustainable risk management, and reducing overall costs — including overheads, wherever possible.
Here are some more specific ways in which Business Analysis can create compelling insights which are bound to influence decisions across companies of scale:
- Delivering unparalleled customer experiences by studying customer patterns
Data analytics is now an indispensable part of the foundation that all organisations must create if they wish to succeed. When contextualisedmore excellent through a business-specific lens, there is a certain depth that it provides that can help bring clarity to the organisation to make sense of how customers are receiving its products or services. Case in point — McKinsey recently published a study in which they concluded that organisations that have leveraged business analytics to understand customer experience on average fared nearly 85% better than the contemporaries that did not, and outclasses them by almost 25% in overall margins.
Now, what is a practical example of this working out in a real-life context? A telecom company can implement analytical models — specifically its predictive models — to make sure that their customers stay with them longer and assess the efficacy of their marketing efforts. Similarly, an online eCommerce store can leverage business analytics data to understand which of their visitors stick around and for how long and which of them come back — and why. Questions of this nature can create a holistic platform or foundation upon which it becomes possible to implement a solid strategy. And the best part is that it can be changed as you get more and more data, so it’s never too late to do a course correction that can completely change an organisation’s future!
Thus, business analysis equips an organisation with the right kind of data to gain competitive advantages and to make sure they can cater to their customers in the best possible manner, for the best possible outcome.
2. Significantly improving performance across all service metrics
Business analytics has multi-pronged uses and advantages, and it would be unwise to point only to one particular aspect when there are many otherthatch can also prove beneficial. Think of business analytics as a tree, with roots that penetrate deep into the organisation’s structural apparatus, and whose branches impact every part of the organisation as well. No matter which function or use you can think of, there is a chance that business analytics can have a positive impact on it, and not just that — it can probably change it for the better as well.
Let’s consider internal resource management, for example. Business analytics can provide crucial insight on how to handle costs, where it is possible to restructure a certain cost in a way that it doesn’t affect the bottom line, and so on. Moreover, an organisation can also take an in-depth look at company performance as far as specific essential performance metrics are concerned (these depend on the nature of the organisation for the most part). Further, business analytics can also illuminate employees’ actual performance and see how they can be managed better — including which factors influence their motivation, how long they are likely to continue in an organisation, and so on.
Finally, it can also dramatically change an organisation’s approach towards its people — the primary driving force behind its growth. Taking into account various data points regarding professional performance, experience, age, and a variety of other factors, it becomes simpler to make calculated guesses about current and future employees’ performance. There will also be insight on who will be the most likely to perform at their best capacity in which role. So, to put it briefly, there will be a vast improvement in the company’s overall performance once the insight from business analytics gets implemented.
3. Providing insight into risk management and how to deliver better management overall
Understanding risk is a vital part of optimising business decisions, and when it comes to efficiently solving this problem, business analytics delivers exceptionally well. Business analytics can be used to analyse all of an organisation’s data, whether it is stored in the form of databases or remains unstructured across various sources. By having insight into what is likely to happen, business analytics can be used to avert crises or optimise reactions during the crisis period to be resolved in the best way possible. This means better risk management, but in the context of the organisation’s work practices, it translates into better management practices overall.
How does this play out in a practical situation? For one, it can be implemented by banks to have a clearer picture of who they should give out loans to — this involves analysing a potential customer’s credit scores and customer loyalty rating. In addition, business analysis can be leveraged to understand further whether certain high-risk payments may be worth the risk after all, or whether certain delinquents on the credit spectrum have no sign of recovery. In strictly practical terms, there are better ways to engage with the end customer and manage internal resources as and when a certain call to action needs to be made. Without business analytics, a lot of precious resources would likely be wasted on customers who would ultimately end up defaulting on their payments; with the power of business analytics, however, it becomes super simple to have accurate predictions and to allocate internal resources to make sure that all the issues at hand are being handled well.
Conclusion
Business analytics is one of those fields which is growing at an alarming rate, and it’s certainly going to stick around long into the future. This is the right time to invest in business analytics, whether as an organisation to get benefits in the future or as an individual who will learn it to employ their services. The idea is to start as soon as you can, and then you can make sense of how to use it in the best possible way, to get the best possible results!
