Every business is looking for a way to get a leg up on its competition. In a world where everyone is increasingly interconnected, it’s harder than ever to find opportunities from beyond a company. One way the businesses are now producing improvements in profits is to look within their operations for ways to improve processes. But you have to measure these somehow. And here comes the question: what is business analytics?
This approach to becoming a more data-driven enterprise is known as business analytics.
What Is Business Analytics?
Business analytics is the use of a methodical approach to exploring a company’s data in order to drive decision making. This is distinct from business intelligence, which is more closely tied to collecting information. Business analytics extends to using statistical methods to identify where opportunities are being missed, inefficiencies are occurring and other challenges might exist. It’s then incumbent upon analysts to produce presentations that state a narrative that allows decision makers to move forward in a more guided manner.
Business analysis covers a wide range of products and services. We traditionally think of something like a PowerPoint presentation as BA. But modern software and database systems allow us to produce mobile dashboards that can deliver powerful insights. Buyers on the other side of the planet can whip out their phones and see emerging trends in customer behavior. This allows them to react quickly to shifts in the market.
Who Uses Business Analytics
Historically, the question of what is business analytics has been viewed as the purview of major companies. With improvements in software and declining costs in building business intelligence infrastructures, even small shops with fewer than 10 employees are now turning to business analytics for insights.
Anyone with a supply chain, product, service or process can take advantage of business analytics. A restaurant may be able to gain insights into how to speed up the time between when food is plated and when it’s delivered to a customer’s table. A pool cleaning business can install IoT devices that monitor clients’ locations for indications that work needs to be done. Even a second-hand thrift shop can use big data insights to identify what items are worth purchasing and which are unlikely to ever sell.
Ways in Which Business Analytics Can Help Your Business
- Improving efficiency, especially within business processes, is one of the easiest ways that companies can approach the question of what is business analytics while keeping an eye squarely on their bottom lines.
- Modern companies have the capacity to track all their inventory, employees and customers in ways that have never before been possible. This means that companies can draw a line from the acquisition of a product through the sales experience and to the customer’s purchase of the item in question.
- A company can also monitor the customer service experience to ensure that first-time buyers can become long-time patrons.
- Wherever an inefficiency might exist in a process, there’s likely an opportunity for analysis to produce results. Business analytics can be utilized to identify where a disconnect in a process might lie. For example, a shop seeing a large number of returns can use BA to determine whether the problem arises from the quality of a product or a need for consumer education. A customer may be frustrated. But the problem can only be addressed when the source of the frustration is identified and remedied.
3 Tips to Reveal the Most with Business Analytics
1. Know Your Biases
One of the biggest challenges is to distinguish between what is business analytics and what is merely bias. It can be easy, for example, for stakeholders to want to blame customers from problems. Owners want to blame workers. Inventory specialists want to blame suppliers.
It’s easy to dig into the business intelligence pile with a biased set of goals, produce a supposed insight and declare victory. Don’t do this. Determine where biases exists, and try to be aware of how they might cloud insights.
2. Become Data-Centric
Making a business data-oriented requires a major shift in the internal culture to ensure everyone knows what is business analytics. There will be people who insist that certain choices are intuitive, artistic or somehow intrinsic in a way that defies analysis. Baseball scouts once fought analysis of their decision making on the grounds that certain intangibles would escape a computer system. This mentality left certain organizations behind the curve. So they ultimately became an impediment to winning in a competitive world where others valued data.
For BA to work well, a company must make an organization-wide commitment. Stakeholders should be educated regarding the changes and encouraged to participate and grow. In extreme cases of resistance, some people may have to be let go.
3. Be Active
One reason that business analytics can make enterprises so competitive is because everyone involved in a process has a chance to be heard. The guy in the shipping department who has been pulling his hair for years over how orders are coming in has a chance to pass information along and expect it to be reviewed.
Business analysis always produces the best results when communication functions as a web rather than a vertical hierarchy. Marketing should be seeing data from acquisitions. Management should be seeing customer service data. Everyone should be putting information into the system to be analyzed. Therefore, insights should be available for all to see.
The power of becoming a more data-centric business cannot be overstated. Companies today have a capacity to develop self-insights in way that has never before been previously possible. Even the flower shop on the corner can monitor sales volumes to determine exactly when customer demand for a particular season begins to rise. By being dedicated to analyzing data, an entire culture of excellence within an organization can emerge.
How has business analytics influenced your operation? Where do you stand on what is business analytics? Let us know by posting on our Facebook page or providing your views in our comments section.
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