January 27, 2023

NORDchinaz

The Business & Finance guru

The Importance of Business Analytics for Modern Businesses

Business analytics consists of several technologies and disciplines that work to solve business problems using statistical models, data analysis and other quantifiable methods. Companies that sell products and services use business analytics to assess every aspect of their business. Analysis is used to pinpoint areas where they can increase efficiency, reduce costs and build customer loyalty. Companies generate a large amount of useful data in their day-to-day business that can be analyzed and turned into tangible solutions to solve a specific problem. 

How is business analytics important?

Builds customer loyalty

There are a lot of options for consumers in every market, and as a company, you need to make yourself stand out among the crowd. Analytics can help you not only build a new business but also maximize existing customers when they visit your site. An example of how this would work is that the business analytics software would analyze the data of what each customer tends to buy and establish patterns in consumer behavior. This would then be used to offer relevant add-ons or push notifications when the customer has left something in their cart. This kind of personalized service leads to an enhanced customer experience and the likelihood that the customer will revisit. 

Increases efficiency

Businesses can analyze all aspects of their business to assess where they can increase efficiency and use that information to lower costs and streamline business. The resources of a business include not only the people who work there, but also the equipment. Business analytics can analyze things such as refrigeration costs in a meat-packing plant. If the data suggests that the coolers are being kept at a lower temperature than necessary, then this can be fixed, and energy costs can be reduced while keeping the food safe from spoilage. According to Forbes, there are several steps for analyzing the data you have available and using it to your advantage. If you are unsure of where to start when using business analytics to help your company be more efficient, then ask yourself to define what business problem you want to solve. 

Reduces manufacturing costs

With proper business analytics, a company could assess its manufacturing processes and reduce costs by adjusting them. An example would be a company that manufacturers computer chips. This company may do the same test on each chip, which is very costly. Business analytics can analyze the testing data from the existing process and use it to predict which chips need which tests historically. The company could then modify the manufacturing line so that only certain chips get certain tests and cut costs. 

Some companies are large enough that they have their own business analytics department, and as this industry is growing quickly, individuals with a master’s in business analytics are in high demand. Online schools such as Aston University can provide a flexible schedule for anyone who needs to work while taking a course. If your company has a business analytics department, then it may also be willing to pay for part of your course. 

Make more informed business decisions

Most companies will use a third party for some of the processes they are not equipped to handle in-house. When they are ready to select a vendor, business analytics can assess the vendor’s performance by looking at the speed and quality of service, as well as any ratings or issues. This can help the business choose the most qualified vendor for the job. This can be done by hiring a business analytics firm. These companies are quickly gaining market share because of the valuable service they provide in improving business efficiencies.

Advertise more effectively

Business analytics can help a business spend valuable advertising dollars more effectively, rather than leaving a lot of it up to chance. Data analysis can let you know what should be on the landing page of the website, and when to use pop-ups and enhance product descriptions to get the maximum engagement from consumers who visit the website. 

Enhanced product management

Large retail chains have thousands of products to market and keep track of. When it comes time to release a new product, business analytics can let them know which product will do the best in a specific region and time of year. When this information is turned into a valuable strategy for key products, it can positively impact sales. 

Resolve issues in a time of uncertainty

When the world was locked down during the COVID-19 pandemic, businesses were launched into a state of uncertainty. Those that were able to adapt to the ‘new normal’ of online purchasing were able to keep afloat, while others that ignored the technological advancements available to them floundered. It doesn’t look like the traditional business model is ever going to come back, and businesses today are looking at ways of resolving issues and managing crises should it happen again. Business analytics can do this for companies that want to learn how to do business profitably and efficiently in today’s economic climate. 

Analyze the competitors

Through business analytics, you can get a clear idea of what your competitors are doing, how effective they are, and where your business stands in the market. By conducting an analysis of your strengths, weaknesses, opportunities and threats (SWOT), you can gauge how your business is performing and make necessary changes to improve your market share.

The face of business has changed dramatically over the last few years, especially with the rate of technological advancements coming out to help with data analysis. Companies can compile huge amounts of data effortlessly, and then hire professionals to sift through it to help them become more efficient, more productive, and more appealing to today’s consumer. 

If you are looking for a career, business analytics is a quickly growing industry for a new graduate or as a second vocation.