What is Business Analytics?
Business Analytics (or BA for short) is a collective term that refers to various methodologies (e.g., statistical analysis, data mining, and predictive analytics) that aim at analysing and transforming raw (both structured and unstructured) data into usable information and identifying/anticipating trends and outcomes. Therefore, it’s a branch of data analytics that targets business operations specifically. In other words – Business Analytics focuses on providing a data-driven basis for making smarter business decisions.
Types of Business Analytics
BA has four main types – each of them can be used as tools for better understanding and growing your business. They can be used separately or as a whole, depending on your needs. They are:
- Diagnostic analytics – uses data analytics to explain why a given situation happened;
- Descriptive analytics – one of the most basic work of business analysts that provides insight on what already happened or is happening right now;
- Predictive analytics – relies on advanced business analytics tools such as artificial intelligence (AI) and machine learning algorithms to prepare models of possible outcomes, such as product sale volumes and potential clients.
- Prescriptive analytics – uses various data analytics tools to suggest current courses of action or long-term strategies for achieving desired results, based on past performances, available resources etc.
Main components of Business Analytics
BA can be composed of many elements. The main and most commonly appearing are (in alphabetical order):
- Association and Sequence Identification – refers to identifying predictable actions performed in relation with other actions or sequentially;
- Data Aggregation – before the data can be properly analysed, it must be gathered, grouped, and filtered;
- Data Mining – DM in BA uses statistics, databases, and machine learning to sort through data clusters, identifying trends and establishing relationships;
- Data Visualisation – puts data into easy to read visual representations such as graphs and charts;
- Forecasting – deals with future behaviour and events estimates based on historical data analytics;
- Optimisation – provides testing simulations for best-case scenarios based on identified trends and made predictions;
- Predictive Analytics – based on various statistical techniques, it provides predictive scores for all sorts of organisational outcomes;
- Text Mining – prepares large quantities of unstructured text data sets for thorough analysis.
What makes Business Analytics so important?
As already mentioned, BA helps companies make smarter business decisions. This can have a massive impact on the company’s future – if used correctly, data is a powerful tool that can ensure steady growth. But without a proper analysis, it’s nothing more than chaotic bits of hard-to-read information. Therefore, data science, business intelligence, and analytics are currently one of the most beneficial expenses, since many businesses digitise their services. Here’s how business analysis and data insights provided by it can do for your business:
1. Improve resource-managing efficiency
A master of business analytics can filter business data regarding resources and the way they are used. Based on that, you can identify key performance indicators and find the points where resources aren’t used efficiently and come up with a more efficient solution. For example, simply cutting a few minutes on the delivery time can save a lot of money in the long-run.
2. Lower employee turnover
With the right analytics tools, HR professionals can assess employees’ satisfaction, their performance, likelihood of aligning with the company’s culture etc. With this kind of data in hand, it’ll be far easier to identify employees who will stay with your company for longer.
3. Reduce manufacturing costs
With the use of analysed data from manufacturing processes, you can determine which actions are unnecessary and can be cut. One of the best business analytics examples in manufacturing is what Intel did – thanks to the deep data analytics, it was able to save almost $3 million on chip testing.
4. Better Customer Experience
Due to overabundance of available options, attracting and keeping customers is harder than ever. General advertising tactics no longer cut it – to get satisfying results, you need to focus on a specific group and tend to its needs and expectations. With keen analytical skills and right tools you can easily identify, which parts of customer/user experience (UX for short) require tweaking.
5. Power through uncertainty
Just a quick glance at the current global market, that there’s not much stability right now. With the use of business intelligence and analytics, you can devise strategies that can help your business get through this horrid period by optimising business processes and adjusting them to the ever-changing circumstances.
The importance of Business Analytics – final thoughts
Business analysts and data scientists have become a crucial part of today’s business world – the way you handle your data can easily make or break your success. Therefore, employing a data specialist can help you get the edge your company needs to break to the top.
Here at Silicon Cities, we can provide you with various data specialists that can get your Big Data in shape and help your company grow. Submit a free quote and learn what we can do for you.