Business analytics is the process of gathering data, measuring business performance, and producing valuable conclusions that can help companies make informed decisions on the future of the business, through the use of various statistical methods and techniques.
Analytics has become one of the most important tools at an organization’s disposal. When data and analytics work hand in hand, the benefits become obvious. Companies can leverage data to improve cost savings, redefine processes, drive market strategy, establish competitive differentiators and, perhaps most importantly, build exceptional and truly personalized customer experience.
Business analytics for organisations is becoming a competitive advantage and is now necessary to apply business analytics, particularly its subset of predictive business analytics. The use of business analytics is a skill that is gaining mainstream value due to the increasingly thinner margin for decision error. It is there to provide insights, predict the future of the business and inferences from the treasure chest of raw transactional data, that is internal and external data that many organizations now store (and will continue to store) as soft copy.
Business analytics enables differentiation. It is primarily about driving change. Business analytics drives competitive advantage by generating economies of scale, economies of scope, and quality improvement. Taking advantage of the economies of scale is the first way organizations achieve comparative cost efficiencies and drive competitive advantage against their peers. Taking advantage of the economies of scope is the second-way organizations achieve comparative cost efficiencies and drive competitive advantage against their peers.
Business analytics improves the efficiency of business operations. The efficiencies that accumulate when a firm embraces big data technology eventually contributes to a ripple effect of increased production and reduced business costs. In the modern world, the vast quantities of data produced by corporations make their study and management practically impossible.
One can make the case that increasing the primary source of attaining a competitive advantage will be an organization’s competence in mastering all flavours of analytics. If your management team is analytics-impaired, then your organization is at risk. Predictive business analytics is arguably the next wave for organizations to successfully compete. This will result not only from being able to predict outcomes but also to reach higher to optimize the use of their resources, assets and trading partners. It may be that the ultimate sustainable business strategy is to foster analytical competency and eventually mastery of analytics among an organization’s workforce.
Analytics gives companies an insight into their customers’ behaviour and needs. It also makes it possible for a company to understand the public opinion of its brand, to follow the results of various marketing campaigns, and strategize how to create a better marketing strategy to nurture long and fruitful relationships with its customers.
Business analytics helps organisations to know where they stand in the industry or a particular niche provides the company with the needed clarity to develop effective strategies to position itself better in the future.
For a company to remain competitive in the modern marketplace that requires constant change and growth, it must stay informed on the latest industry trends and best practices. Not only does business analytics provide the needed knowledge for companies to survive in today’s constantly changing business environment, but it also makes room for growth and improvement, providing a detailed look into various opportunities and challenges that companies face on a day-to-day basis.
The retention of company employees has been a concern for business enterprises although it is taken more seriously in some niches that it is in other industries. A recent study that was conducted by IBM infers that a business enterprise had over 5,000 job applications reviewed but only hired 200 employees monthly. Big data has made it possible for companies to quickly analyse long time worker’s histories to identify the job traits for long-term employment prospects.
As a result, corporations and small business enterprises are revamping their recruitment process which reduces employee turnover significantly. Companies can dedicate resources that are newly available to activities that are of more productive value to the business and increase their levels of service delivery. The retention of an experienced pool of employees can significantly assist a business enterprise to outperform its competitors using their long-term experiences.
Keithley Tongai is a Consultant intern at Industrial Psychology Consultants (Pvt) Ltd, a business management and human resources consulting firm.