Do you know you can generate more revenue, minimize cost, and maximize profit just by giving your organization's data the right treatment?

Yes, this can be realized by analyzing your business data and deriving insights which will be used for making smart business decisions. Considering the competition in the industry, adopting business analytics has proven to be a profitable decision for most industries.

Business analytics has helped businesses curtail short and long-term risks. From enhancing customer experience, and reducing employee turnover to increasing efficiency, and lots more, business analytics has proven to be a beneficial tool to the marketplace.

What is Business Analytics?

Business Analytics is a process in which businesses gain new insight and improve their decisions by applying data analysis, statistical methods, and some other quantitative methods to their historical data.

Business analytics requires using some methodologies like statistical analysis, and data analysis to analyze and transform data into meaningful information that in turn helps the company improve its performance and decision-making. It involves carrying out an analysis of past historical business data and using the result to plan and make better decisions for the organization.

A typical day in the life of a Business Analyst involves:

• Determining the problem and business goal of the analysis
• Selecting the appropriate analytical tools and approach to solving the problem
• Gathering the data that will support the analysis
• Analyzing the data to derive insightful decisions
• Providing a visual representation of the result

Business Analytics VS Data Analytics

Most people agree that these two terms share the same objective of using data to improve business processes. We shall examine the nuances that exist between them in order to clear up any confusion.

Data analytics involves gathering, analyzing, summarizing, and visualizing a dataset in order to help organizations make better decisions while Business analytics involves using data analytics in pursuit of business insights.

Business analytics focuses more on improving core business functions whilst Data analytics involves supporting business decisions with insights generated from existing data.

Data analysts ensure to understand the problem statement, gather data that will help solve the problem, analyze it in turn, visualize the result and tell a story about the data while Business analysts ensure to understand the business problem, review processes in order to identify possible areas of improvement, create financial models, and present their findings to the organization’s stakeholders in form of visuals.

Data analytics does not necessarily have to involve business problems. It is a wider concept that includes business analytics. Both terms are often used interchangeably as they both deal with data.

Types of Business Analytics

Business analysts use three types of analytics to derive insightful decisions from data. These include Descriptive Analytics, Predictive Analytics, and Prescriptive Analytics.

Descriptive Analytics

This is concerned with explaining what has happened in the past. With this one can tell a story about what has happened in the organization in the past. It involves using simple statistical techniques which can be easily understood by the business audience.

Predictive Analytics

This is concerned with what will likely occur. After performing predictive analytics on a set of data, one can determine the likelihood of future outcomes. It involves using rather advanced statistical techniques and probability to calculate the probability of occurrence of an outcome.

Prescriptive Analytics

This is concerned with what should actually occur. This informs the organization about the consequences of each decision taken. It informs the organization about the consequences either good or bad that follow any action that will be taken and recommends the best decision that will profit the organization.

The Importance of Business Analytics

The following are some of the importance of business analytics.

1. Increase in revenue: It is seen today that most organizations are employing the service of a business analyst. Research has shown that companies that adopt business analytics have a significant increase in their revenues and are able to cut down their cost of production thereby maximizing revenue.
2. Discovery of new opportunities: The organization understands the importance of data and thus preserves it well. The business analyst gathers this data and analyzes it to discover hidden patterns that unravel opportunities available to the organizations.
3. Identifying the target market: Business analytics makes it easy for businesses to identify their target customers. This is achieved by analyzing their demographic data to understand the class of customers that patronize their products more.
4. Improved decision-making: Business analytics have been helpful to organizations in making more informed decisions as all options are provided with their consequences. This is a result of analytics carried out on the organization’s data rather than guesswork. Prescriptive analytics guides businesses to pick their best option out of several options available.
5. Increase in efficiency: Business analytics help the organization achieve its business goals. The employees are allowed to share their insights and views about the organization's status. The employees are also opportune to give business advice and make decisions that will benefit the organization.
6. Mitigating risks: Business analytics can help a business understand its risk pattern and suggest preventive measures to curb it. Businesses can as well leverage business analytics to minimize loss.

Applications of Business Analytics

Here are some areas where business analytics is being used.

1. Agriculture: Agriculture forms a major part of the economy. It also helps sustain humanity. Business analytics help makes better investments and also assist in growth. Through the analytics of past data, the business analyst is able to provide the best action to be taken to further improve yield, curb flooding and erosion, improve land use, increase crop production, etc.
2. Banking: Business analytics has ensured that long queues in banking halls are now a thing of the past. For instance, Bank of America has understood that majority of customers who frequent the banking hall come to check their transaction history. The bank provided a virtual assistant who assists the customers and this has helped customers maximize their time.
3. Healthcare: In healthcare, business analytics helps to optimize the production of drugs, monitor the spread of disease, and explain the effect of different interventions on the same illness.
4. Finance: Business analytics helps extract insights from financial data and help organizations make better decisions. The business analyst optimizes the financial planning, budgeting, and forecasting and also helps in detecting fraud and mitigating risk.
5. Human Resources: Great businesses understand the impact of their staff and make sure to manage their staff effectively, especially the highly productive ones. Business analytics will help the organization identify the ideal and productive staff and keep them. This is realized by analyzing the organization’s employee performance, employee turnover, and employee attrition.
6. Education: Business analytics has helped institutions keep track of their students, study the failure and success rates and provide them with options and strategies to minimize students’ failure rates.

Conclusion

Business analytics is very useful to all businesses and organizations either small or big. It helps organizations make better decisions and also improves their way of operations. It is necessary for any organization that desires to thrive to adopt its usage in its daily operations.

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