Businesses today now rely on collecting and making use of all types of data in order to streamline operations and steer towards growth. However, using analytical data for effective and intelligent decision-making is not as easy as reading a few numbers of charts. According to a Bloomberg Businessweek survey, around 97 percent of the participants’ companies are using business analytics in one way or another. The survey stated that the most apparent reasons to implement business analytics were; improved risk management, increased profitability, and reduced operational costs. That said, many businesses find it hard to maintain data consistency and accuracy and are thus unable to make good use of it.
Data exists everywhere, and sifting through it in search of information that is useful to your business is a skill that is necessary to retain a competitive advantage. For example, analytics nowadays has applications in various settings- from enhancing marketing campaigns with better audience targeting to predicting the outcome for a legal case. Without analytics and intelligent decision-making, you’re running a business based only on intuition, which can be dangerous in the long haul. That said, let us take a look at some of the primary reasons why business analytics is necessary for every company – big or small – in today’s business environment.
It improves decision-making
We should always have a balanced approach when talking about responding quickly with an effective strategy. Such a thing helps companies decide whether particular company-level or project-related decisions and actions are appropriate or not. In the end, quick and intelligent decision-making is vital in gaining a solid position in your target market. Business analytics allows you to forecast and understand upcoming market challenges beforehand and take action accordingly.
Rummaging through lots of data and information and trying to make sense of it can be tricky. It would be wise to bring in an analytics professional to polish the decision-making process. Or, if you have a knack for knowledge, consider enrolling in an analytics degree online and up-skill yourself. The enhanced expertise will enable you to develop better business insights and strategies for the short and long term.
It helps identify new and profitable business opportunities
Data analysis allows you to increase your business’s efficiency. More importantly, it also allows you to identify new business opportunities that you may have overlooked in the past, such as untapped markets or a new product/service. Expansion and diversification can help your business’s profitability and growth potential. The more markets you tap into, the higher your chance of bringing in new customers while identifying opportunities to introduce improved products for a new audience segment.
It helps prevent shipping breakdowns
Shipping companies usually have to deliver a large number of packages worldwide every day. Many are now use nosiness analytics to enhance the reliability and performance of their systems and operations, especially the mode of transportation. By taking a sneak peek at data from every vehicle, cargo container, and warehouse, companies can now track and fix every problem. These include delivery lags, storage cost reductions, vehicle maintainers, etc.
Addressing problems before they turn into something significant allows companies to ensure that their fleet operates at maximum efficiency. It helps to reduce downtime, customer dissatisfaction, and maintenance costs. In the long run, this is good for the business.
It makes business processes more efficient
The correct business analytics tools can help companies identify significant clusters of data quickly while maintaining maximum accuracy. These tools can also help companies identify the right KPIs covering every business aspect, including human resources, financial, and product/service-related.
Consequently, such a thing can help businesses set goals and achieve them faster than usual by ensuring proper resource allocation. Furthermore, by incorporating business analytics tools in the mix, companies will foster a culture based on teamwork. With the appropriate use of cloud-based technology, data can be made accessible throughout the company for a more collaborative decision-making process.
It helps business stay updated
Today consumers are tech-savvy and easily influenced by a plethora of products/services in the market. By leveraging business analytics, companies can acquire insights into customers’ sentiments and responses to particular products or services. Through business analytics, companies can stay updated with the newest marketing trends, allowing them to protect themselves against volatile or unpredictable changes in the market and becoming obsolete. It will empower businesses to preempt their services and products up-gradation and develop innovative solutions to existing and potential problems.
It helps increase revenue
According to McKinsey, businesses that invest in data analytics experience a six percent average increase in revenue. The same study also suggests that these companies can convert it to nine percent if they continue investing in it for five years at a stretch. Another survey by BARC study states that companies can experience an eight percent increase in profits by using analytics to drop their operational costs by ten percent. These findings show that business analytics can provide any company with a clear financial payoff.
It allows companies to conduct a competitor analysis
Competitor analysis is a vital element of business-related research for any company to retain its competitive advantage in today’s cutthroat business environment. It involves the evaluation of your competitor’s weaknesses and strengths as well as your business.
Thorough competitor analysis allows you to make better marketing decisions and tap into markets that your competitors aren’t. It also enables you to take advantage of any business opportunities before your competition does. For instance, with the help of data-driven competitor analysis, you can find out the keywords they are using in their SEO campaigns. Are they missing any opportunities? The strength of their backlink strategies, and much more. You can then utilize and use such missed-out campaigns and techniques in your favor and improve your business’s profits.
Business analytics and data mining have several advantages, as mentioned above. Data can now improve any business process, including supply chain management, internal communication, trend forecasting, product/service development, etc. With the help of the proper data collection and decision-making tools, you can quickly make effective business choices to increase profitability and ROI in the long run.