business analytics

Why Is Business Analytics Important? Know The Benefits

published on: 22.09.2021 last updated on: 04.09.2024

What fuels your business policies, hard facts, or intuition? It’s true that “gut feelings” guide the decisions made by 50% of Americans. However, surveys show that 62% of business executives also base their decision-making procedures on instinct.  

However, 39% of companies admit that intuition isn’t strong enough to create business decisions in the 21st century when adequate information isn’t available. 

We’re living in the age of data intelligence today, where companies gather multitudes of information. Using an analytical approach in decision-making doesn’t just guarantee you security but also transparency.  

It isn’t a secret that data-driven policies/decisions make organizations more profitable than things determined by your hunch. 

Commercial Benefits Of Using Business Analytics

Business Analytics

After the emergence of the coronavirus pandemic, more small firms started using business analytics to bolster their decision-making procedures. Many companies incorporate technologies such as AI to boost their commercial capabilities.

The big data eruption hasn’t even spared multinational corporations, e.g., Google and Facebook. In short, business analytics involves statistical technologies in which firms assess the data they’ve collected to gain new insights into their policies and the possibility of modifications.

The dominance of analytics has also created new jobs for IT students. According to Comparably, big data architects earn over $150,000 annually, making this profession a top pick for tech enthusiasts.

If you’re willing to pursue a master’s degree in analytics, the data architect career path will provide various lucrative options. When it comes to your job roles, you’ll monitor the company’s data systems and integrate new ones with the existing systems, alongside other responsibilities.

So, what makes business analytics so crucial for modern-day organizations? Here are some benefits we’ll discuss:

1. Better Decision Making

There are several examples of brands using analytics to improve their marketing campaigns. Netflix has leveraged big data to bolster its suggestions to different users.

Their algorithm analyzes a user’s past searches and watched content to determine which shows/movies they will be interested in adding to their must-watch list.

That’s how companies ensure that consumers stick with their products and stay loyal to their brands. So, business analytics boosts your decision-making capability to the next level.

2. Mitigated Risks

Business analytics allows you to predict threats and find methods to mitigate them. It also enables you to limit losses after suffering a setback.

For instance, colleges today use propensity models that predict future outcomes and help them decide which classes are more vulnerable to failure among students. Likewise, these data-driven predictions let organizations prepare for future events, thereby lessening the intensity of setbacks.

3. Better Products

DDDM helps you create relevant products for the market. Statistics show that 42% of startups fail as they’re bringing products nobody in the market needs. With business analytics, you can learn about the products your niche requires right now.

Collaborating with third-party platforms where customers express their opinions can let you stay relevant in the field. Thus, you can provide services/products after assessing how successful they’ll become. It makes your organization more profitable in the future.

4. Quicker Updates

Today, companies can’t keep up with the ever-changing trends without investing in business analytics. You can improve marketing campaigns by gaining insights into your targeted audience’s preferences.

Using analytical technologies enables you to make the consumer market predictable. So you can mold any marketing strategy to fit the customers’ preferences. It’s become crucial for a startup’s survival to incorporate business analytics into decision-making procedures to remain updated about the niche.

5. Greater Revenue

You can guess why companies using business analytics are more profitable. A 2016 survey by McKinsey shows that businesses investing in big data saw an average 6% increase in their profitability, which stems from 9% for investments across five years.

When your decisions are backed by data and supported by statistics, then higher revenue generation shouldn’t surprise you. Similar studies have also agreed with McKinsey’s results that investing in business analytics isn’t a decision you’ll regret.

6. Enhanced Security

Since the COVID-19 crisis began, hackers have been increasingly targeting companies. Using analytical methods helps you enhance your security by predicting which pathways are vulnerable to hacker attacks.

Besides alerting whenever a breach is detected, these models enable companies to discover flaws in their system’s security. These statistical models detect anomalies to alert security professionals. That’s why using business analytics keeps your data well-protected.

7. Productive Teams

With the rising demand for business analytics, companies can expect several big data jobs to appear in the future. So, hiring individuals well-versed in analytical technologies can help you potentially create an energetic, resourceful, and productive team.

Hiring analytical experts will let you hone the collective qualities of your staff since they will be equipped with the knowledge needed for business success. Therefore, bring more analytical geniuses to your company.

8. More Personalization

All renowned companies collect people’s information in the form of “cookies.” It helps improve their marketing endeavors. You can provide consumers with personalized services using business analytics while emailing them ads tailored to their individual preferences.

It ensures that customers see marketing campaigns of only those products/services they’ve shown some interest in previously. A personalized experience boosts the loyalty of customers and their engagement with your brand.

9. Increases operational efficiency

Business analytics helps organizations identify inefficiencies, find out the areas of improvement and bottlenecks, and streamline operations. Organizations can use these data analyses to optimize the entire process and allocate resources effectively. This enhances productivity and drives operational efficiency to a new level.

10. Gives you insight into customer habits

Organizations can have a deeper outlook on customer data and get valuable insights into their preferences, purchasing patterns, and behaviors. This helps them personalize the market strategies, change product offerings, and improve the customer experience to get long-term loyalty and increase customer satisfaction.

What are the challenges of business analytics?

Some of the challenges that you have to face when you implement business analytics are:

  • There is a lot of data from different sources: There are various scattered data sources, and this makes it difficult to get the correct information. The data is also formatted in different file types, which complicates the analytical process even more.
  • Hiring the right analyst: it is difficult to know which tool and software you should invest in. and it is even more difficult to figure out who is the best fit for your job. Make sure you know what kind of data analytics your business is going to need so you can figure out the right person for the job.
  • Data storage: storing and managing so much data needs an amazing infrastructure, scalable storage solutions, and efficient data architectures to make sure all the data is accessible. You have to take care of the security part as well and make sure the analysis process is giving out maximum output.

Conclusion

More firms realized the importance of using business analytics in the previous decade. A Forbes survey shows that 53% of companies used business analytics in 2017 compared to 15% in 2015.

During this pandemic, organizations have become increasingly accustomed to data-driven decision-making. So, analytical methods enable businesses to acquire insights into their customers/competitors to boost their efficiency.

Business analytics also offers a risk-free way of creating business policies, while automation is a crucial feature of DDDM. In the world of big data, it doesn’t matter how small or large your company is, as leveraging data is vital for growth.

Read More:

Tags Business Analytics program Business Analyticscareer Importance of using business analytics job role of Business Analytics
author image

Mashum Mollah is an entrepreneur, founder and CEO at Viacon, a digital marketing agency that drive visibility, engagement, and proven results. He blogs at BloggerOutreach.io.

Leave a Reply

Your email address will not be published. Required fields are marked *

Related