What is Business Analytics?
Posted by: Yamini.S | Business Analyitics
The objective of this blog:
To describe in simple terms about
- The importance of learning Business Analytics / Why to learn Business Analytics?
- What is Business Analytics?
- Applications of Business Analytics
Business Analytics is the most important skill in this 21st century. In future, there will be enormous growth, and this skill is already in demand. As technology penetrates every sector and every department within organisations, a lot of data are getting generated. So the need for professionals who can collect, interpret and analyse that information is skyrocketing.
Industries across the world are using data to1:
- Drive process and cost efficiency (53%)
- Drive strategy and change (53%)
- Analyse workplace and workforce productivity (49%)
- Manage risk (48%)
- Develop new products and services (45%)
- Attain and retain customers (45%)
- Analyse how current products and services are used (44%)
- Monitor and improve financial performance (44%)
- Monitor the market (43%)
- Stay ahead of the competition (43%)
By considering this trend, acquiring in-depth knowledge in Business Analytics is essential to advance the career and make better decisions in the work environment.
The ability to bring data-driven insights into decision making is compelling. Even more, companies can't hire enough people with these capabilities. This is the way the world is going2.
What is Business Analytics?
It is the capability that offers tremendous potential to improve any business.
Business Analytics helps to do three things;
- Descriptive Analytics: Using existing data to uncover deep insights about the business. This is called Business Intelligence.
- Predictive Analytics: Predicting the future based on existing data.
- Prescriptive Analytics: To optimise the future results; present the user with specific opinion and determine which business options are best with certain criteria.
Based on the business problem at hand, a suitable method can be used.
According to a recent study by Micro Strategy, 94% of the Industries expressed that Data and Analytics are essential to their business growth and digital transformation efforts, as depicted in Figure 1.
Most of the Industries revealed that their efficiency and productivity had improved a lot. They can make faster and effective decision-making by implementing Analytics in their organisation, as shown in Figure 2.
Power and impact of Data:
To do that, we need to have data. In this Digital Era, Data is all around us.
Data are collected whenever you make a purchase, visit a website, travel, make a phone call or post on a social media site. Never before so much data about so many different things been collected and stored every second of every day.
Whatever Data we generate each day is equal to the sum of our parents' and grandparents' generated in total for their entire lifetime.
The power and impact of the data make us feel comfortable with the way we forecast the business.
In this world of big data, basic knowledge about data, i.e., the ability to analyse, interpret, and even question data, is more valuable. The immense potential of data for transforming businesses is the key here.
Why is Business Analytics popular now?
Since every company is going Digital, they need data professionals to organise and analyse massive amounts of data. Data accumulated from the 1960s through ERP. From 2000, three major shifts happen
- High Computing Power
- Complex algorithms
- The enormous growth of Data due to the internet availability
Because of these, Business Analytics has evolved;
Applications of Business Analytics:
Industries use this Business Analytics
- To make predictions and develop future strategies for growth
- To give Personalised Recommendations: Product / Service (E.g., YouTube/Amazon/Netflix Recommendations)
- Analysing Customer Behaviours: Predicting Customer Churns; Credit card Defaulters based on their purchasing behaviours;
- Natural Language Processing: Siri, Google Assistants, Alexa;
- Google Maps, Google search, Facebook advertising, ad targeting;
- Sports Analytics:
- Web and Social Media Analytics: Sentiment Analysis / Text mining / Topic Modelling
- Forecasting orders and Recipes
Tools used in Business Analytics:
The essential tools used in Business Analytics are R, Python for Data Science, Excel, Tableau, Power BI, Pentaho, Machine Learning algorithms, Statistics and Mathematics.
Conclusion:
Research says that the success rate or the improvements in decision-making are three times more if done using data rather than mere gut instinct or intuition3.
People with the above-listed capabilities and understanding of the business contexts will add more value and significantly impact them. The ultimate goal is that emphasising the importance of learning Business Analytics, describing the spectrum of Business Analytics and its applications. This idea leads to making decisions based on knowledge, not by mere intuition in an organisation.