Role of Business Analytics in Business Insight and Decision-making
Organizations are embracing digital transformation, and business analytics supports the drive by providing insight from the huge amount of data collated by an organization. Businesses use business analytics to boost their process, formulate innovative strategies and change, and increase their cost efficiency and financial performance.
The use of business analytics is on the rise, mostly directed by the proliferation of big data in SMBs and the ability to afford and implement technologies to leverage big data. Research shows that by 2022, 90 percent of corporate strategies will explicitly mention information as a critical enterprise asset and analytics as an essential competency.
Define Right’s Business Analytics service under the BES (Business Enablement Services) umbrella supports organizations in better decision-making and boosting their growth.
What Is Business Analytics?
Business analytics (BA) or Business data analytics is the process of analyzing an organization’s data to identify trends & patterns and gain insight and support in data-driven business decisions. BA combines skills, technology, and practices like descriptive and prescriptive analytics, statistical models, and other quantitative methods to process and analyze data.
Unlike traditional data analytics, BA has a narrower focus. In the context of business insight, BA uses prebuilt business content and tools that expedite the analysis process. It drives data-driven changes in an organization utilizing predictive models and aims to offer a concrete conclusion on the specific business problem.
Some real-life examples of business analytics are fast-food companies implementing BA to streamline their restaurants and respond to real-time needs to improve efficiency. These businesses started monitoring the drive-thru and changing the digital boards to increase efficiency during peak hours. When the line is long, digital boards show items that can get prepared in a short time. And when the line is short, show slower items with higher margins get featured.
Commercial Organizations use BA mainly for
- Analyze data from several sources, such as cloud applications, CRM software, marketing automation tools, etc.
- Find patterns within data sets using advanced analytics and statistics that help predict trends in the future and get new insight.
- Monitor changes in KPIs and trends on a real-time basis helping accumulate data in a common place and get conclusions accurately.
- Make decisions based on current information and with backup on different scenarios.
How Business Analytics Transform Data into Insight?
The four primary methods of business analytics to get used based on the end goal of using BA and the business situation of an organization are descriptive analytics, diagnostic analytics, predictive analytics, and prescriptive analytics. These methods help clean, dissect and absorb data to identify a possible solution for business challenges.
Organizations need to analyze data and fetch meaningful data insight that helps them make better-informed decisions. The key attributes of an actionable data insight are its alignment to the business (KPI), relevant data context, relevance to making the right decision, specificity, novelty, and clarity.
Organizations require to develop a team of internal experts and external analysts who understand the business to derive insight. Here is a list of a few ways that help transform data into valuable and actionable insight.
Identify and Measure Appropriate Data Sets
Every problem has a unique solution and requires different treatment. For instance, an eCommerce firm may want to know channels that give more conversion, the look-to-buy ratio of each product, product landing pages that need improvement, etc. You need to think about the business in advance and make changes accordingly.
Identifying patterns is essential to turning data into knowledge. With advanced technology like AI and ML, pattern recognition has become easy. Itis essential to identify potential implications of the discovered patterns and cross-check if it answers the raised questions. Also, the questions raised should be appropriate and relevant to business needs.
Communicate Data Insight
Connects insights from different data sources to bring out the current situations and communicate with the team. Interactive dashboards can help track KPIs and communicate data insight. It aids each team member to speed up together with the project status and share what they know.
Segmentation and Drive Action
Categorize or segment data with common attributes to take positive action. For example, segmenting customer data and assigning them a unique identity helps to learn customer behavior. You can set up an optimization plan with the help of business tools like ClickData and build custom reports.
Articulate the data story with what, how, and why to present a clear picture. Use illustrations, graphs, charts, etc., for easy understanding and clear visualization and make your data with a significant difference and maximum impact.
Appropriate Data Context
Appropriate data context is crucial to avoid misinterpretation and making wrong decisions. A better understanding of the context for each dataset helps make more informed decisions ensuring their meaning, relevancy to the organizations, and their effect on business.
Develop a Business Optimization Plan & Hypothesis for Strategy Formation
Application of the Define, Measure, Analyse, Improve, and Control concept helps improve the business. For example, define the growth and improvement you want in the business, quantify the growth by measuring it, analyze the business and formulate an action plan.
Analysis should begin with a precise hypothesis articulation that gives the potential to drive action in drawing findings with the datasets.
Integration of Data Sources and Break Organisation Silos
The availability of relevant and new information help organizations make better and faster decisions. Data mining and source connecting make access and availability of information to your clientele by fostering a sense of mutual understanding between you and the client.
Minimizing organizational silos or breaking them supports the free flow of information within departments and sectors for effective decision-making and strategic planning.
Significance of Business Analytics in Business
Irrespective of the size or sector, BA is crucial for all organizations. It is a tool to increase market share and profitability and good return to potential shareholders. The significance of analytics in business is because of the following primary reasons.
Informed Decision Making
Uber upgraded its Customer Obsession Ticket Association using prescriptive analytics to examine the product’s new iteration to be more effective, faster in service, more accurate resolution recommendations, and higher customer satisfaction. BA leads to more informed business decision-making using evaluating several alternatives.
Improves Operational Efficiency
Organizations use predictive analytics to anticipate operational and maintenance issues and avoid big problems. For instance, a mobile network operator leveraged data to foresee outages seven days before and avoided them with timely maintenance.
Minimizes the Risk
BA helps organizations make the appropriate choices by analyzing several alternatives for a particular problem, such as consumer behavior, trends, and performance.
Supports Innovation and Change
BA supports innovation and change through new product development or redesigning the existing product, understanding consumer and market needs and requirements, etc.
BA as a Tool to Get Competitive Edge
Nowadays, it has become crucial for businesses to evolve their product and services, increase customer satisfaction, and drive innovation and change across the organization to get an edge over their competitors. Define Right’s BA service provides smart solutions to complex business needs, boosts operational efficiency, and builds a foundation for business growth.