What is business analytics?
In a nutshell, business analytics is the process of collecting various data with the aim of its further analysis and practical application of the insights.
When going deeper into the terminology, business analytics should be distinguished from business intelligence and data analytics.
Data analytics is a more general term. It refers to the process of gathering huge amounts of data, exploring it, and making predictions on the basis of it.
Business analytics implies collecting and examining historical business data. The insights received from this process are used for making business predictions, determining business trends, and planning long-term business strategies. In comparison with data analytics, business analytics is a narrower term used by organizations of different sizes and those majoring in various business domains.
Business intelligence uses the same tools and methods as business analytics, but the aim of it is more about description. Business intelligence analyzes historical business data and explains modern tendencies without looking into the future as business analytics does.
Components of business analytics
Business analytics includes several steps that should be taken to gain worthwhile insights that can be applied to any sphere of business. Those steps are separate elements of the general strategy that should be taken into account.
- Data accumulation: the process of collecting data from devices, aps, social media, spreadsheets, etc., filtering, arranging, and storing it safely in the cloud. Cloud technology makes it possible to keep large amounts of data and access it quickly.
- Data mining: applying special metrics, tools, machine learning algorithms, and artificial intelligence to sort out the datasets and fish out valuable information in addition to the logical structuring of the data. Algorithms help to avoid repetitive information and get rid of useless patterns.
- Descriptive analytics: outlining the tendencies and causes of the present business stance. An attempt to understand where the business is now, what the reasons for that are, and what aims will be a priority for the future.
- Predictive analytics: a turn to the future. On the basis of the information received from historical data and current trends, business analysts predict future models and develop possible future decisions and choices regarding further business growth and sustainability.
- Visualization and reporting: exploiting charts, graphs, and simulation methods to present the information gained and to model the scenarios for the future. Visualization tools help involved parties to better understand the tendencies and to decide which measures to take immediately.
Benefits of business analytics
Business analytics offers significant advantages for any organization. It is capable of not only improving the performance of a particular department or business direction, but also enhancing the general growth of the organization and possible international roll-up.
- Well-considered decisions: it is always safer to make a decision after conducting extensive research and analysis. Companies that ground their decisions on historical outlines, taking into consideration the peculiarities of their own business strategy, risk less. The decisions regarding marketing strategies, staff training, budgets, and sales indicators can all be backed up by the statistics of the business analysis survey. As a result, organizations can feel secure and confident about their future sustainable development.
- Clear visualization: the outcomes of business analytics are available to all stakeholders and employees of the organization due to visualization. Powerful programs and solutions for visualizing the data allow users to process huge datasets and convey the most important facts without tiring the audience. Therefore, important insights become accessible to each interested party.
- Readiness for any scenario: business analytics software arms companies with an opportunity to check any assumption and feel backed up in case of an emergency. Business analytics decreases the risk factor and makes business owners feel secure.
- Technological development: further implementation of business analytics software allows companies to exploit the technologies of augmented reality and artificial intelligence to further model possible scenarios and forecast time periods for achieving aims and reaching important milestones.
Applying business analytics
The area of application of the results of the analytical work is wide. It can affect both separate departments of the company and the whole business in general. Here are several examples of the positive influence of business analytics.
- Marketing: business analytics assist in the analysis of marketing campaigns, understanding target markets, and designing productive marketing strategies. Artificial intelligence and machine learning contribute to the development process significantly.
- Human Resources: with the help of business analytics, HR experts better understand the expectations of the employees and can predict their interest in job positions in the long run.
- Sales: understanding the triggers that push clients to make a conversion will come with the application of business analytical tools. Analyzing the price, season, availability of the goods, and other factors helps increase sales.
- Finance: predictive analytical tools allow companies to foresee their income level and future costs. It creates a reliable image of the company and makes business owners and employees feel secure.
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