Business Analytics is a process of gathering, analysing and drawing valuable conclusions from the vast amount of data available. Today, businesses, irrespective of their size, are using analytics tools to determine how data can be leveraged to solve problems and increase efficiency and revenue.
To help you understand how business analytics works in real life, lets look at an example: we are all aware of Uber, the ride-hailing cab service. What is it primarily used for? To enter your pickup location and wait for the cab. While this seems pretty straightforward, there is a lot of data wrangling that goes behind it. For starters, Uber uses its algorithms to find look-alike trips, i.e. a ride that starts near, ends near, and is happening around the same time as another ride. By using this data, Uber can cater to passengers willing to have a similar journey but by paying less. And, this is where Ubers Pool feature comes into play. By analysing data, Uber is not only able to serve more people but also ensure its drivers are occupied and make more money. This is just one simple example of how a simple ride-hailing app like Uber can transform its services by using data.
As business analytics is a broad field, it includes varied types, applications, and components. Are you interested to learn everything about Business Analytics? Please go through our in-depth blog.
If you want to understand how this field is proliferating, why it is so important, and how you can make a career in it, continue reading this blog.
Analytics has become the buzzword of this decade. Almost every business type is focusing on using it to change the way it makes decisions. But why has it become so popular right now? Why does almost every company want to hire business analytics professionals?
The reasons behind this swift drive are need, availability and affordability. Starting with the first factor, businesses are in constant pressure to innovate due to the increasing competition. Plus, customers have become more demanding. So, to survive, managers must make the best decisions promptly to respond to market-driven forces. And, analytics is a promising method to gain insights required to make better and faster decisions.
When it comes to availability and affordability, organizations are collecting tremendous data. This is mainly due to the recent technological advances and the affordability of software and hardware. So basically, companies have all the raw data possible, but they are in dire need of experts who can make sense of all it and draw relevant outcomes.
So, to have a competitive edge while saving time and money, business analytics has gained a lot of hype amongst businesses lately.
By now, we are sure you might have a brief idea of what business analytics is, how it works and why it is the next big thing on the market.
As the title suggests, we will focus on why business analytics plays such a vital role in the growth of businesses. Lets get started.
With the variety of options available, customers are spoiled for choice. To ensure businesses can retain their customer base, they turn to analytics. For example, companies can analyse a customers interaction on their website and past purchasing habits. Based on this data, they can analyse patterns and make improvements to their website performance. This can be as simple as sending a push notification prompting products that customers have added to their shopping cart. This will result in overall better customer experience, and eventually, loyalty.
Businesses often outsource a few of their processes to enhance their efficiency. When it comes to selecting vendors for such activities, they need to know which one will bring more profits. Analytics can help them evaluate supplier performance based on customer ratings, order fulfilment speed, quality, etc. This data will help them decide which one works best for their business.
Every year, companies have to bear an extensive cost due to employee onboarding and attrition. To save time and costs, HR professionals can use analytics tools to examine the likelihood of an employee aligning with a companys culture, tracking their performance and how satisfied they are with the new role, and similar factors. Once you know such answers, it will be easier to recognise employees who will stick to your company for a long time.
Efficiency is not always limited to employees. Businesses can also analyse other resources to learn more about their performance. For example, a grocery store chain was able to reduce refrigeration costs by merely analysing the temperatures of in-store coolers. It was found that the refrigerators were being kept several degrees lower than necessary, which increased power usage. So, by increasing the temperature, power costs went down without affecting safe food storage. Business owners can learn from such examples and use data to make their resources efficient.
Finance companies have begun using analytics to reduce fraud. One way they do this is by using data to identify potentially fraudulent purchases, based on the analysis of customers previous transactions. These companies also use predictive analytics to look at customer profiles and gauge the level of risk. This helps rate the risk that a particular customer presents and use this analysis to prevent losses, and builds stronger customer relationships.
One company that has outranked everyone when it comes to using analytics to reduce manufacturing costs is Intel. Initially, this tech giant would perform 19,000 tests on each chip being manufactured. With the advent of predictive analysis, Intel was able to determine which chips need, which tests before their launch. By using the data collected from all of that testing, it has been able to save almost $3 million.
Earlier, business people would rely on traditional marketing techniques to gain and retain customers. However, the internet has changed this completely. Now search marketing has become the most efficient and inexpensive way for businesses to find leads. By using business intelligence, marketers can craft perfect campaigns and strategies, eventually increasing chances of higher ROI.
Advertising is expensive; hence marketers must know how to get the best return on investment. This is why they use analytical methods such as A/B and C split-testing. When it comes to advertising online, all landing pages, pop-ups, and even product descriptions are evaluated and tweaked to ensure maximum results. Even the way products are positioned on the website is assessed to identify the best location to drive more engagement and sales.
When it comes to retail companies, they have more than a thousand products to offer. So, how do they decide which ones to release at which time? Yes, the answer is data analytics. Such businesses analyse which are the most popular products depending on the region and season. This data is then used to target the right product at the right time, which eventually has a positive impact on sales.
Whenever a problem arises, a business often pauses the current operations, which leads to a huge loss. To prevent such situations, business analysts help the organization to make an informed decision by providing information that can help identify potential risks and avoid any occurrence of loss. These professionals can use the raw data to detect a malfunction in the existing system, and thus help business owners to fix it at the earliest.
Look at the current business scenario. Owing to the lockdown across the globe, the business environment is as uncertain as it gets. Almost nobody has an idea when things will get back to normal, and the corporate world will be allowed to resume its operations. At such times, data analytics can be used to resolve supply chain issues, introduce crisis management solutions, optimize costs, and more.
Today, almost every business has a clear idea of its competitors. An effective way to get ahead of them is by understanding what they are up to, their strategies, USPs, etc. By gathering this data by conducting a SWOT analysis, you can get a preview of how your business is performing as compared to your competitors.
If you are willing to be a part of an integral team at any company and help it in the different ways mentioned above, get ready to become a Business Analyst. Are you wondering how to go about the entire process to become a business analyst? We have a complete blog that will help you out to carve a path to successfully grab one of the most in-demand jobs of the decade.
Thats everything you need to know about the importance of business analytics in the digital age. Hopefully, by now, you have a clearer understanding of how this field is transforming businesses across the globe. With the advancement in technology, this field is only going to get bigger, better, and provide more opportunities for aspirants.
We offer a PGDM in Business Analytics program that will help you acquire advanced knowledge and skills to work as a Business Analyst. Plus, you will get international value-added certifications while completing this post-graduate degree. The course is approved by IBM, the leading company in business analytics. So, if you want to excel in this field, apply to IBMRs PGDM in research & business analytics right away. Get in touch to know more.