Business analytics is considered to be an extremely powerful tool in today’s market. Companies and organisations across industries generate massive amounts of data, which, in turn, provides them with useful insights about the business market. Owing to the production of data in large volumes, companies are constantly having to hire experienced business analytics professionals, and because of its high demand, business analytics course is becoming extremely popular among the youth all over the world.
According to a recent study, companies all over the world are using data to — (1) increase process and cost efficiency (60%), (2) drive strategy as well as change (57%), and (3) monitor and develop financial performance (52%). This research also reveals that over the period of the next three years, global enterprises will see an acceleration in their investment by 71%. Considering this particular market trend, obtaining a substantial amount of knowledge of business analytics may be the best way for analytics aspirants to advance their careers, and make better and improved decisions in the market.
Defining Business Analytics
Business analytics is a process that uses quantitative methods for deriving meaning from data in order to produce thorough and informed business decisions. There are four different kinds of business analysis:
- Diagnostic Business Analysis — interprets historical data to determine “WHY” things happen in the market
- Descriptive Business Analysis — interprets historical data to identify the latest trends and patterns
- Predictive Business Analysis — uses statistics to make predictions about future outcomes
- Prescriptive Business Analysis — it is the examination to determine which outcome will give the best results in a specific scenario
Difference Between Business Analytics and Data Science
To acquire a better understanding of business analytics, one must know how it differs from data science. While both the processes work with data analysis, there are some dissimilarities that differentiate business analytics from data science. The prime dissimilarity between these two lies in the process of how data is used.
Business analytics is a process that is more concerned with extracting meaningful insights from visualising data in order to facilitate the decision-making process of a business. Data science, on the other hand, is concerned with making sense of raw data by using algorithms, computer programming, and statistical models. Although there are several differences between them, both business analytics and data science gather insights from data to make informed business decisions.
Benefits of Business Analytics
- Better and Improved Decision-making
Business analytics is considered to be an indispensable resource when it comes to approaching a significant business decision. For instance, when UBER, a transportation service provider, upgraded its Customer Obsession Ticket Assistant or COTA in early 2018, they worked with a tool that used machine learning and natural language processing to help agents improve speed and accuracy in response to the support tickets. The tool also used prescriptive analytics to examine whether the latest iteration of the product would be more effective than that of the previous version.
Through A/B testing, the company determined that the updated product was leading to a faster service with more accurate resolution recommendations and customer satisfaction scores.
- Improved Operational Efficiency
Business analytics, apart from having financial gains, can be used for fine-tuning business operations. According to a recent report on emerging market trends in infrastructure, it was seen that several firms nowadays make extensive use of predictive analytics in order to anticipate maintenance and operational matters before they grow into bigger problems.
A mobile network survey revealed that they use data to foresee outages days before they actually occur. With this kind of knowledge at hand, the firm can prevent outages more efficiently by time maintenance. It enables them to save on operational expenses, and also keeps assets at their optimal performance levels.
- Greater Revenue
Business analytics courses say that companies who have adopted business analytics, have, and still are experiencing significant financial returns. Research shows that companies that invest in big data, yield a whopping 6% average increase in their profits. It jumps to a 9% increase for investments spanning over five years.
Importance of Business Analytics
When companies take a data-driven approach to increase their growth and improve their overall performance, they get to witness tremendous upside in a very short period of time. However, the number of business analytics professionals is short despite the ever-increasing demand. LinkedIn listed business analytics as one of the most required skills for business, and the Bureau of Labor Statistics (an American agency that measures labour market activity, working conditions, price changes, etc.) revealed that by the year 2026, business analytics jobs would grow by 27%, which is a pace much faster than other occupations.
Popular Business Analytics Applications According to the Finest Business Analytics Course
Marketing requires business analytics to take care of several different matters, such as studying customer behaviour, learning the latest market patterns, analysing trends, identifying the target audiences, employing advertising techniques that appeal more to customers, predicting supply requirements, and others. For instance, business analytics is used to measure the impact and effectiveness of a marketing strategy on customers.
Business analytics is indispensable in finance. BA professionals are in high demand in areas like portfolio management, investment banking, budgeting, financial planning, forecasting, etc. For example, companies these days, generate a huge amount of financial data. Making use of intelligent business analytics tools can help these companies by using the said data to determine the prices of products. Business analytics can also study performance trends of a particular stock based on historical data and provide advice to clients on whether to retain it or sell it.
Business analytics can help a lot in supply chain management and inventory management. It can also be used to assess target performance, improve efficiency, and measure risk mitigation plans on the basis of product data. For instance, a manager wants a piece of information on the performance of machinery that has been in use for the past five years. The historical data will help in the assessment of the machine’s performance and decide whether maintaining the old machine would exceed the expense of buying a new machine.
- Credit Card Companies
When a customer transacts with credit cards, it concerns many factors, such as the lifestyle, financial health, preference of purchase, behavioural patterns, etc. of the customer. For instance, credit card companies help the retail sector by identifying the target audience for the latter. As per transaction reports, retail companies can predict customer choices, identify their spending patterns, and have knowledge about the customers’ preferences on buying products from their competitors. This is historical information that helps the retail companies direct their marketing strategies in a way that hits the target and reaches the right audience.
- HR Professionals
HR professionals from different sectors can use data to gather information about the educational background of high performing students of a school, an employee’s service years, and other matters. This piece of information can play a huge role in the selection procedure of candidates. For example, HR managers can make predictions about employee retention rates based on the data provided by none other than business analytics.