Business analytics has been altering how businesses run for more than a decade now. There is barely any industry where business analytics has not been utilized.
From helping businesses target the appropriate clients and increase sales to assisting HR professionals in selecting the best applicants and lowering overhead expenses, it can be found anywhere and everywhere.
To help you understand more clearly, here’s a video for in-depth knowledge about Business Analysts
What is Business Analytics?
Every single thing in the contemporary world is data-driven. In all companies, whether small-scale startups or multinational organizations, information is the most vital element. But what is information without analysis? Nothing!
Analyzing the data to map out relevant trends and information is equally and extremely important. There are tons of raw data present in the world, but it amounts to nothing if we cannot make sense of it. That’s where Business Analytics comes into play.
The process of utilizing statistical tools and procedures to analyze and examine data relevant to businesses is known as business analytics. It mainly makes use of the following methods:
- Analytical Modelling
- Predictive Analysis
- Numerical Analysis
The main steps in the process of business analytics are to understand the data, structure the problem statement, come up with various strategies using statistical models, and then organize favorable ideas to reach an optimal solution.
With the use of business analytics, organizations may increase their productivity and efficiency by gaining insightful information and taking strategic business decisions.
Now that we understand what Business Analytics is, let’s look at its advantages.
Advantages of Business Analytics?
Business Analytics provides an in-depth knowledge of the organization’s data. This in turn helps in understanding the present circumstances as well as in predicting future events and trends.
Some major benefits of Business Analytics are:
- Improving customer service.
- Understanding the data better.
- Improving the organization’s capability to prevent or predict fraud.
- Provides a competitive edge.
Alright then, without further ado, let’s quickly look into the applications of Business Analytics…
Applications of Business Analytics?
The world has witnessed significant changes and tremendous growth in organizations that have adopted the concepts and principles of business analytics. Business analytics can be applied to a wide range of industries.
The agriculture industry, medical industry, manufacturing and development industry, human resources, finance industry, and numerous other fields use business analytics to help businesses grow and keep their audience happy.
Here are some examples of business analytics to show how it is used in different industries.
- FINANCE
- Business Analytics assists financial managers in managing their finances optimally and then taking relevant measures. Implementing business analytics in various sectors of finance(such as investment banking and budgeting) can prove to be highly fruitful for the finance industry.
- It helps in building future strategies for a new product by observing similar products and methodologies.
- In addition to this, business analytics can also be used to predict future loan defaulters.
- HUMAN RESOURCES MANAGEMENT (HRM)
- Human Resource Management is the process or practice of managing, hiring, organizing, training, and directing people in an organization in a strategic manner. Human Resources (or HR) professionals use business analytics in several ways.
- It helps them in analyzing large amounts of data to understand employees’ needs and grievances and therefore assist them accordingly.
- Business analytics can be used by HR in determining the right candidates, the expected salaries as well as the trending retention rates in the industries.
- Moreover, HR professionals can leverage business analytics to forecast the trajectory of the organization and thus efficiently design appropriate training and development programs for trainees or employees.
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- PRODUCTION AND INVENTORY MANAGEMENT
- Management is a key element in every organization. It aims to enhance the profits and productivity of an organization all the while trying to reduce overall costs.
- Business Analytics serves as a great tool for management and manufacturing. It is involved in every phase of product development. It supports analyzing the inventory measures and designing business solutions that are most suitable for products.
- It can help determine the costs and gauge the expected sales of products. This way the organizations can adapt to the latest styles and opportunities in the industry.
- Hence, business analytics stands as a boon for the diverse sectors of management, be it inventory management or product management.
- CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
- Customer Relationship Management or CRM is the process of building and managing the organization’s relationships as well as interactions with customers.
- Business analytics can be used in customer relationship management to understand the customer base better and therefore, implement corresponding strategies. This helps significantly drive sales and amplifies the organization’s profits.
- Customers’ purchasing patterns, needs, buying behaviors, issues, feedback, and all the other indicators can be obtained and analyzed through business analytics methodologies. These indicators can then be used to foster long-lasting and loyal relationships between clients and the organization.
- MARKETING
- Marketing, when combined with business analytics can prove to be one of the best strategies an organization can implement.
- Business analytics helps the organization to know its users, their needs, behaviors, and purchasing styles to design and modify suitable plans and schemes.
- Sales can be optimized and user experience can be enhanced. Business analytics can help marketers know their target audience and their interest.
- It can also be used to evaluate and determine how well a product or a marketing strategy is performing in the market. Considering these factors, organizations can modify their strategies and implement better planning.
Have a look at the different types of Business Analytics and how businesses make use of them.
Types of Business Analytics
Descriptive analytics uses the existing data of an organization to understand what events have occurred in the past, analyze current situations and follow the trajectory. It helps the organization perform the SWOT analysis, thereby improving its performance. This further enhances the accessibility of relevant information and patterns for the stakeholders and managers.
Descriptive analytics predominantly answers the question: What has happened in the past?
Diagnostic analytics is used to distinguish which factors influence or contribute to current events and product performance in the market. If an organization loses its sales over a period of time, diagnostics analytics can help them analyze the reasons behind the loss and prevent such situations in the future. Similarly, the organization can easily and efficiently track the reasons and factors contributing to the success of a particular product and implement the same strategies in the future for other campaigns.
Diagnostic analytics predominantly answers the question: Why did it happen?
Predictive analytics is used to forecast the possibility of upcoming or future events. It helps the organization develop new statistical models and design better techniques based on the information gathered during the descriptive analytics. It detects future industry trends along with their outcomes.
Predictive analytics predominantly answers the question: What is likely to happen?
Prescriptive analytics suggests all the favorable actions along with their corresponding outcomes based on specific events. It helps to analyze all the information gathered and then provides the best solution that should be pursued. It also recommends a specific action plan to be taken to reach the desired results.
Predictive analytics predominantly answers the question: What to do?
Conclusion
Any organization that strives to reduce its cost, cater to its customers’ needs and simultaneously grow its sales, always tries to execute business analytic strategies. Business analysts convert an organization’s useless raw data into valuable refined information.
They identify the strengths and weaknesses of the organization and sift through all the data to figure out the optimal solutions and plans for taking the organization to soar to the heights of success and glory.