Advantages and Disadvantages of Business Analytics - Intellipaat

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Advantages and Disadvantages of Business Analytics
Updated on 23rd Jun, 23 5.5 K Views

Business analytics is a buzzing topic everywhere in the world today. Every organization, whether it is a newly founded startup or a rapidly growing MNC, makes use of business analytics in its working methods. 

In this article, we’ll learn about what business analytics is, its advantages, and some important topics related to it.

Table of Contents

To make learning business analytics easier, watch this video comprising the complete course on Business Analytics. 

So, without wasting any more time, let’s quickly jump into the discussion.

What is Business Analytics?

Business analytics is the analysis of an organization’s raw data and the conversion of that analysis into information that is relevant to the organization’s vision and objectives.

The data is processed using various tools and procedures, and various patterns and correlations are mapped out before predictions are made based on the data acquired. Organizations create plans to boost their sales and profits based on these anticipated outcomes.

In simple terms, business analytics can be described as:-

  • Gathering of past data and records.
  • Analyzing the data collected to map out relevant patterns and trends.
  • Leveraging these trends to formulate improved strategies and efficient business decisions.

Okay, so now that we know what business analytics is, the next question that arises is:

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What are the advantages of Business Analytics?

After knowing what business analytics is, it is vital to understand why it is prospering so immensely. 

Here are a few major advantages to help you understand its importance:- 

  • Make better business decisions:
    • Business analysts understand the organization’s goals and use analytics to guide data-driven business decisions. 
    • The past data of the company, current market situation, and product performance are leveraged to predict future trends and accordingly design strategies.
  • Monitor progress and performance: 
    • Business analytics can be used to track the progress of the organization over the years. It can also identify the performance of a product or a strategy in the market. 
    • Based on these reports, it can be deduced what is working well for the organization and what isn’t. As a result, updated decisions and methodologies can be implemented to improve the stats.
  • Reduce risks: 
    • One main advantage of business analytics is its ability to mitigate risks. It helps in tracking the mistakes made by the organization in the past and understanding the factors that led to their occurrence. 
    • With this knowledge, analysis is done to predict the probability of the reoccurrence of similar risks in the upcoming future, and therefore, the corresponding measures can be taken to prevent the same.
  • Enhance customer experience:  
    • All successful businesses have figured out the secret to success – making their customers happy! Organizations today, identify their customer base, understand their needs and behaviors and correspondingly cater to them. 
    • This is possible because of the statistical tools and models used in business analytics.

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After getting to know what business analytics is and what its advantages are, it is necessary to understand its disadvantages as well.

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What are the disadvantages of Business Analytics?

Business Analytics Disadvantages

Business Analytics is a highly lucrative field, nevertheless, it has some cons as well.

Some of these are:

  • Lack of Commitment:  
    • The business Analytics process can be extremely costly as well as time-consuming. Although the solutions can be easily achieved, the time and cost factors leave people feeling disinterested and therefore less trusting. 
    • This eventually leads to the complete failure of the business.
  • Low-Quality Data:  
    • Organizations have a lot of data. But the real question is how much of this data is actually correct and accessible. 
    • Having poorly constructed, heavily complicated or insufficient data is a huge limitation and can hinder the business analytics processes.
  • Privacy Concerns:  
    • Companies collect customer data to analyze it and make better business decisions. But this can lead to a breach of the customer’s privacy. 
    • There have been instances when one company shares its collected user data with another company for mutual benefit.
    • This data can be used against a particular user in any way possible.
    • Therefore, it is essential for organizations to collect only vital information and work on maintaining the security and confidentiality of the data collected.

 Let us now understand how Business Analytics actually works.

How does Business Analytics Work?

Business analytics is the analysis of an organization’s raw data and the conversion of that analysis into information that is relevant to the organization’s vision and objectives.

The data is processed using various tools and procedures, and various patterns and correlations are mapped out before predictions are made based on the data acquired. Organizations create plans to boost their sales and profits based on these anticipated outcomes.

Business analysts focus on driving practical business changes in an organization. 

They aim to use the data insights derived from the data analysis for answering questions like:-

  • What were the highest sales?
  • How sales can be improved?
  • Which product performed well in the market?
  • What factors affected the performance of the product?
  • What are the current market trends?
  • How well is the company expected to perform in the upcoming period?

Become a Business Analyst Master

We now know how business analytics works. But what about the skills that are required for the same? 

Business Analyst Skills

Skills required by a Business Analyst

A business analyst is an extremely important member of a product team. He is responsible for collecting data, analyzing it, and formulating fruitful business decisions based on the analysis.

Given below are some of the skills that organizations look for in a Business Analyst:

  • Analytical thinking
  • Interpersonal skills
  • Written and verbal communication skills
  • Requirement engineering
  • Statistics and probability
  • Visualizing data
  • Basic programming skills
  • Decision-making skills
  • Observation and analysis
  • Documentation skills

Here are a few popular tools that you can use as a business analyst.

Career Transition

Tools used for business analytics

Several different types of tools are used for business analytics. Ranging from tools for gathering data, mining data, and predicting and conducting statistical analysis of data, there are discrete tools for everything.

    • This is used to present data in the form of maps, charts, and similar other visual models.
    • It aids users in performing rigorous analysis and then forecasts corresponding patterns.
    • It is a tool that is easy to deploy and learn.
    • Microstrategy enables smooth processing of raw and unstructured text data.
    • It incorporates several business research methodologies.
    • Microstrategy hosts additional sources to retrieve data for analysis and enables users to produce and distribute the analyzed reports from any place or device.
    • Basic knowledge of SQL and data analysis is required to use this tool.
  • SAS
    • SAS is one of the most widely used business analytics tools used today.
    • It is a versatile tool that uses machine learning and artificial intelligence to perform business analytics in the organization.
    • It can be used to analyze unorganized data and convert it into meaningful insights.
    • In addition, SAS is also used to forecast upcoming trends based on business requirements.

Before deciding whether a specific career is the best choice or not, it is important to learn about its future. 

So, here is a brief description of what the future looks like for business analytics.

Scope of business analytics

Scope of Business Analytics

Business analytics has made decision-making in businesses easier and better. With the rise in data every day, the need to analyze it parallelly keeps rising. Within the last decade, business analytics has grown immensely. 

The jobs in business analytics are growing speedily. Moreover, considering the vast range of applications as well as numerous benefits, there is definitely future scope for business analytics.

Are you preparing to crack Business Analyst interviews? Refer to these interview questions for your preparation! 

Top 35 Business Analyst Interview Questions and Answers


Business analytics is a rapidly growing field. It transforms data to recover insights, identifies patterns, predicts upcoming trends, and recommends the most optimal solutions for organizations. This has helped a number of companies improve their outcomes and reach their desired goals.

Business analytics is a highly lucrative technique and it’s high time now that businesses understand and adopt its principles. 

Have any queries regarding business analytics? Drop them here on our Community Page.

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