Business analytics is defined as the combination of solutions used to build analysis models and simulations to create scenarios, understand realities and predict future states by utilizing the data which is being continuously generated by companies overall transactions (sometimes this data is also called as big data). In other words Business analytics is used to gain insights that inform business decisions and can be used to automate and optimize business processes. Most of the data-driven organizations consider their data as a valuable asset and leverage it for competitive advantage. Business analytics are performed to identify the weaknesses in existing processes and highlight meaningful data that will help an organization to prepare for future growth and challenges. Successful business analytics is directly dependent on data quality and skilled analysts. Business analytics includes data mining, predictive analytics, applied analytics besides statistics, and is delivered as an application suitable for an organization. As business analytics comprises of decision support systems, continuous improvement programs and many of the other techniques used to keep a business competitive, therefore it is imperative to gain some niche skills related to business analytics. Some of the important skills include project management, quantitative skills, information management, organizational understanding and systems approach. One of the important things to note is that business analytics is different from business intelligence nevertheless many organizations may consider them as synonyms, which is actually unfitting. To be precise business intelligence measures past performance and answers question such as what, how & when something happened however business analytics predicts future events, discovers patterns and answers questions which include what will happen next, why it is happening now, what if these trends continue, then what is best or worst outcome. Business analytics has become an important component of successful modern business and to understand it more here are few key points which highlight its significance.
Cost Reduction: A well designed business analytics system integrates supply chain planning information (production, inventory and logistics) across different operations. It also makes possible to analyze supply chain performance at a granular level so that companies can identify
and enhance their processes to help drive down costs, improve service and reduce risk more efficiently. Additionally, business analytics can be applied to vendor and procurement analysis to provide a more consistent measurement of procurement performance and to help improve the management of risks and controls for existing and extended supplier networks. This application can optimally source goods to help increase purchasing power and allows companies to evaluate adherence to contractual terms and to determine the cost of noncompliance.
Risk Management: Predictive models in the banking industry are developed to bring certainty across the risk scores for individual customers. Credit scores are built to predict individuals delinquency behavior and widely used to evaluate the credit worthiness of each applicant. Furthermore, risk analyses are carried out in the scientific world and the insurance industry.
Smart Decision Making: Business analytics facilitates the distilled information at companies’ fingertips; it’s easier to empower a team to make swift decisions. Fast movement and development is important for a business if it wants to stay ahead of the competition. Equally important is careful consideration of each decision. Nothing can derail a company faster than getting off in the wrong direction. Making fast decisions is easy, but what is more important is to make smart decisions in a short period of time. With voluminous data at hand, its possible to make better, smarter and informed decisions.
Efficiency: As business analytics has ability to gather a large amount of data in seconds, it presents the key insights in a visually appealing way. Companies can now formulate decisions to help achieve specified goals. Analytics encourages a company culture of efficiency and teamwork where employees are able to express their insights and share in the decision-making process. Business analytics also provides companies with better choices on such matters like where to take the business as well as determining the steps needed to achieve new goals.
Quantification: Most businesses have a vision and a mission statement. These companies often teach new recruits and re-train long-term employees on the fundamental values that drive the company to success. What many companies fail to do, however, is to quantify these values.
With business analytics, companies are able to measure how these values translate into numbers. By using quantifiable figures, broad value and mission statements can be quantified too, rather than just leaving it to generic interpretation. Companies now use data to focus on operating with processes that keep in line with company values.
Real Time Updates: From last two decades majority of consumers change their mind easily as trends come and go, and they are easily persuaded by better propositions. Business analytics helps to give insights about how the target market thinks and acts. Companies will be prompted to be dynamic at all times to serve the needs of ever-changing consumers. Changes in the industry can occur at a very rapid pace. It is not unusual to see larger companies being devoured by promising new age start-ups. Business Analytics protects companies business from unpredictability. With business analytics companies are able to innovate their products & services according to consumers needs and preferences.
Customer Retention: Business analytics provide one of the most valuable opportunities for customer retention and customer satisfaction, since any company that deals directly with the consumers should be striving to create more positive experiences with every interaction. The best way to be sure a service-oriented business is succeeding in its objectives of inspiring customer loyalty and earning higher profits is to analyze the relevant, segmented data with appropriate methods.
Future Products & Services: With the ability to gauge customer needs efficiently, business analytics has the power to give customers what they want. Business analytics points out the significant trends by combing the power of core data and social media inputs; it shows how and when customers are happy and what could be their probable future needs. More companies are creating new products in such a way that they can meet customers needs today as well as tomorrow.
Fraud Management: Many financial institutions including banks use business analytics to predict and prevent credit fraud, saving a lot of unplanned expenses. Although the technology is still under development it has seen a higher success rate from last couple of years.
Mobility: Today there are many companies which provide business analytics solutions and everyone has a common focus towards mobility. Many business analytics systems are already seamless across multiple devices and operating systems; this means that any employee or decision maker can access the required information anytime anywhere through internet.
Agility: In todays competitive business climate, its no longer good enough to make good guesses and hope for the best. Creating a company culture based on using business analytics throughout every department helps companies to stay agile. It also helps them to make smarter choices on where to take the business and how to get there.
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