Business Analytics is a growing practice, and something that every business can benefit from. But what exactly is Business Analytics? Here is a very brief overview: Business Analytics is the practice of analyzing a business’ data, with the intent of making future decisions based on that analysis. Some companies may use this data as an asset and “leverage it for competitive advantage,” while others simply use it to optimize their day-to-day operations.
It is important to note, however, that the quality of the data and the expertise of the analysts will play a major role in the effectiveness of your business analytics. Poor data and inexperienced analysts will not produce optimal results. Fortunately, it is relatively easy to gather useful data and find someone who will do it justice when analyzing it.
How is it used?
Examples of uses of business analytics include data mining (the process by which patterns and relationships in data are uncovered), predictive modeling (using data from the past to predict behavior in the future), and statistical analysis (“explaining why a certain result occurred,” according to Tech Target). The overall goal of the analysis project will determine which methods will be used to analyze data –every method will not give you the results you’re looking for. Choosing the right analysis method will give you the results you want and that can be used correctly in the context that you’ve chosen.
What’s the difference…?
Although the term “business intelligence” is often used in place of “business analytics,” they are two separate topics and care should be taken to use the correct term. Business analytics is typically more in-depth and detailed in its response than business intelligence.
Business Analytics answers the questions, “Why did this happen? Will it happen again? What will happen if we change something? Does the data tell us something else we didn’t think of ourselves?” Business Intelligence simply answers “What happened? When? Who? How many?” but doesn’t ask the same probing questions as analytics does. From this simple example, it is easy to see that, while business intelligence is valuable, it doesn’t provide the in-depth answers that you would get from business analytics.
What can it do?
Business analytics is very valuable for companies looking to reduce overhead, increase profit, streamline services, optimize product offerings, and improve customer service. It may seem impossible that all of these areas could be improved with one analysis, but it’s true! For example, by taking a look at your company’s history, you can see what products were most popular (you’ll want to continue to stock those) and which ones were duds (you’ll want to discontinue those to save money), what your peak service hours were (keep those) and which hours were underutilized (toss those), et cetera.
Simply looking into these matters and the data trends that surround them can save your brand lots of money and improve the quality of your products and services. Business analytics can be used in any aspect of your company (sales, research and development, customer service) to streamline and maximize effectiveness.
This post was written by a guest contributor for MSU Business Analytics, hosted by the Broad College of Business and home of the Business Analytics programs.