Organizations today not only strive to be profitable but also want to meet and exceed customer satisfaction. Data is an extremely powerful weapon, but to be able to understand and use this data in the appropriate way is what makes it beneficial. Business analytics plays a crucial role in achieving this.
In this article, we’ll cover the following topics related to business analytics.
Table of Contents:
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Alright, so let’s get started with all and everything there is to know about Business Analytics…
What is Business Analytics?
Analytics works as a model through which we create scenarios and based on these scenarios, the performance of products or organizations is predicted. It allows the management to make better decisions and plans.
Business analytics, therefore, is analyzing the organization’s raw data and turning it into useful information with respect to the organization’s vision and goals.
Several different types of tools and methodologies are used to work on the data, map out diverse patterns and relationships, and then predict the outcomes based on the information gathered. Using these predicted outcomes, organizations design strategies that drive their sales and profits.
So now you know what Business Analytics is, but you must be wondering why exactly is it so important.
Business Analytics Importance
Business Analytics is a hot topic and for good reason. Here we’ll see some of the reasons why it is so popular and necessary for businesses:
- Companies are no longer required to rely on speculation or gut feelings. They now have organized data that contains facts and numbers to assist them in making business choices.
- Business analytics systems can gather enormous amounts of data. Decision-makers can then deploy different technologies to utilize this data in creative ways.
- Business analytics does data processing as well as provides a deeper understanding of the data’s significance and the best ways to use it.
- Sales, financing, internal operations, and other business activities all benefit from business analytics.
Business Analytics Examples
To help you comprehend better, here are a few real-life business analytics examples of some popular organizations and how business analytics have affected their growth and success:
- In 2018, Uber made use of business analytics to improve its customer support – COTA (customer obsession ticket assistant), which was based on machine learning and natural language processing. It assists agents in replying to support tickets more quickly as well as accurately.
- They saw a 10% reduction in ticket resolution time after the first iteration.
- Eventually, Uber developed COTA v2. This then put an emphasis on deep learning architecture.
- In 2015, Microsoft found out that to enhance the company’s performance, greater face-to-face interaction with their employees was required.
- MS Workplace Analytics team reduced the number of offices from 5 to 4, so that the distance that the employees needed to travel for meetings would be reduced. This strategy saved around 100 hours of work per week.
- Eventually, Microsoft was able to gain 520,000 USD per year of net savings in employee time. In addition, it also encouraged better collaboration within teams.
- Amazon has successfully been using business analytics, making it a great online retailer. It uses the business model and statistical tools to analyze the customer database and personalize product recommendations for its audience.
- It also conducts in-depth data analysis to design fruitful business decisions that allow the smooth functioning of supply chain management.
- American Express:
- American Express has utilized business analytics to foster new installment administration items for clients as well as new market offers.
- In the Australian market, the business analytics innovation assisted American Express with recognizing up to 24% of Australian clients who are probably going to close their records in around 4 months of the administration.
- This way it has been capable of holding those clients whom they might have lost in any case.
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As we have already seen, business analytics is a highly powerful tool used by organizations. Let’s take a quick glance at how it can be categorized.
Categories of Business Analytics
- DESCRIPTIVE ANALYTICS
What has happened….?
Descriptive analytics is reviewing past data and analyzing current events to enhance organizational performance. This further upgrades the accessibility of important data and patterns for the managers and stakeholders.
- DIAGNOSTIC ANALYTICS
Why did it happen….?
Diagnostic analytics is utilized to recognize the factors that impact the current circumstances and product performance in the organization. It uses key performance indicators or KPIs to understand the performance of a product and the current state of the business.
- PREDICTIVE ANALYTICS
What will most likely happen….?
Predictive analysis gathers the information from descriptive and diagnostic analysis and then predicts the probable future events. It forecasts all the upcoming trends and suggests all the future scenarios that are likely to occur, which then helps the organization plan accordingly.
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- PRESCRIPTIVE ANALYTICS
What steps should be taken….?
The prescriptive analysis analyzes all the past scenarios and then recommends the methods to bring into action, in case a familiar situation arises in the future. It provides all favorable measures and their corresponding results. This helps in formulating new and improved methods or strategies that will help to achieve the desired results.
Descriptive and diagnostic analytics mainly answer questions like-
- What were the highest sales in the previous financial year?
- What was the most popular product?
- Which methodologies were most successful?
- Which product did not perform well?
- How well is the current strategy working?
- How is the market condition affecting product performance?
Whereas, predictive and prescriptive analytics answer the questions like-
- What methods are to be used?
- What will happen if a new strategy is implemented?
- How is the product expected to perform?
- What does the upcoming market situation look like?
- What are the company’s expected sales?
Now that we know what business analytics is and how it helps businesses achieve their goals, let us discuss what is the Role of a Business Analyst in an organization.
Job responsibilities of a Business Analyst
A business analyst is a very important part of a project team. Below are some of the major Responsibilities and Tasks that a business analyst encounters:-
- Gathering data and analyzing the data collected to figure out relevant information.
- Work and collaborate with the stakeholders frequently.
- Understanding key performance indicators.
- Identify business trends and problems.
- Business analysts recognize the goals of an organization. They perform analysis and testing of the present strategies to develop updated methodologies.
- Uncover the organization’s areas of improvement to establish curated initiatives.
- Formulate and document in-depth insights gained during the analysis of data.
- Design business models based on the organization’s requirements.
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Business analytics is a great tool that can help organizations increase their customer base by assessing their data and suggesting what the next plan of action should be. Indeed the advantages of business analytics are immense.
Today, it is essential for all businesses and organizations to adopt the principles of business analytics, if they wish to fulfill their goals. With the rapidly increasing data, comes the rapidly growing need of analyzing it, and Business Analytics is the answer!
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