Business analytics – you’d be forgiven for thinking it sounds like any other tired buzzword. But as technology continues to influence how we do business, knowing how to put your data to use is key to staying afloat in a fiercely competitive landscape.
To help you get to grips with the enigma that is business analytics, we’ve put together a comprehensive guide to what it is, what it involves and how you can make it work for your business.
- What is Business Analytics?
- What are the Benefits of Business Analytics?
- 5 Types of Business Analytics Explained
Business analytics is the process of examining data to transform it into usable information – information which can be used to direct data-driven decision-making. Its aim is to gather data of most value to the enterprise, with a view to increase revenue, efficiency and productivity.
There are three primary strategies relating to business analytics:
- Descriptive – finding trends and patterns in historic data
- Predictive – forecasting the outcomes of future business actions via legacy data
- Prescriptive – testing data-driven processes to determine which offers the best ROI
Businesses often implement a combination of tactics to garner the best insights from their data sets, which we’ll cover in more detail below.
So, what benefit can you expect from implementing a considered business analytics strategy? Let’s take a look:
- Increased revenue – analysing existing data sets to identify patterns and trends can lead to increased revenue, with some businesses achieving a 10% uplift in ROI. This is thanks to the lucrative insights you can glean about your sales and marketing processes, insights which can be used to streamline and sure-up this aspect of your organisation.
- Informed decision-making – the assurance to make informed decisions is something every business leader wants. The insights provided by business analytics enable data-backed, strategic decision-making – so you know any changes to your products, services or operation have a higher chance of success.
- Better efficiency and streamlining – one of the key attributes of business analytics is that it enables greater operational efficiency and streamlining. By understanding your data sets, you can identify red flags and pitfalls in your organisation, and make the necessary improvements to put things back on track.
- Contingency planning – when you understand your business on a granular level, you’re better placed to make plans for the future. This, in turn, aids the development of watertight contingency measures – ensuring that the right processes are in place to sure-up your operation against risk.
- Supply chain flexibility – tapping into big data sets makes it easier to control your supply chain. With a good understanding of when peaks and troughs in demand are likely to occur, you can take a flexible approach and ensure you don’t overspend on inventory and associated costs.
- Competitive edge – when implemented correctly, business analytics can give you an edge over competitors. Getting a handle on your own data will enable you to leverage tactics which can help you leapfrog the competition.
- Tried and tested marketing campaigns – if you’re wary of overspending on the sales and marketing arm of your operation, business analytics can help you attain consistent ROI across multiple marketing channels and campaigns. By having a better understanding of your audience and demographics, you can build targeted campaigns and promotions which drive business and growth.
Now that we’ve explored the plethora of benefits which business analytics can afford, it’s time to take a closer look at the strategies and elements available.
When it comes to effective business analytics, there are a range of methodologies you can use to reach the desired outcomes. We’ll take a look at five of the principal strategies below.
1. Data Mining
One of the most effective and prevalent business analytics strategies; data mining involves discovering patterns and trends within big data sets. Through a combination of data discovery, detection, clustering and statistical analysis, you can uncover truths within the numbers which can contribute to more data-informed decision-making.
The beauty of data mining is that it offers immediate insights into key consumer trends and patterns. With these discoveries, you can segment your data into defined categories, and put into action strategic business functions which target different customers and their requirements.
2. Data Aggregation
Data aggregation is an essential step in the business analytics process. It covers the gathering and collection of the data itself, as well as the process of segmenting it into a summarised, visual format which can be easily used to inform key functions and personnel throughout your operation.
Carrying out data aggregation is important for a number of reasons. Firstly, it ensures the accuracy of your data sets, with tried-and-tested processes in place to gather and segment the information. It also ensures that data isn’t gathered unnecessarily, but is instead defined by the results and outcomes you want to achieve at the end of the process.
3. Data Visualisation
Data visualisation concerns how you take big data sets and present them so they’re most digestible and easy to understand. This is a crucial step for many businesses seeking buy-in from key stakeholders and investors, as it affords a categoric view of why specific business decisions are being made.
Presenting data in a graph or chart might sound simple, but it’s a process worth considering carefully. Think about what you hope to achieve by presenting data in a certain way; is the information clear and tangible enough to make it easily palatable by those whose backing you need? Or, will your staff and colleagues easily be able to put the data to use across the various functions of your business?
Forecasting is the principal form of predictive business analytics; it’s the process of predicting future events, behaviours or trends based on existing data sets.
Used correctly, and forecasting can be a powerful tool in controlling your supply chain and sales strategy. It allows you to adapt more flexibly to a changing business and sales landscape, ensuring that supply meets demand through a strategic, data-driven approach.
By putting data to work to forecast key business benchmarks, you can safeguard your bottom line by ensuring that your inventory is in line with demand. It’s also, as we touched on above, a great means of contingency planning – ensuring you have a plan B in place to mitigate certain business risks.
5. Text Mining
Text mining has emerged as a highly effective means of gathering data about your customers. Through a five-step process of data gathering, processing, indexing, mining and analysing, you can collect data which can be of use to key business functions – from marketing campaigns to customer service policies.
Essentially, text mining is the process of collecting text from different channels related to your business – whether it’s from social media sites, call centre scripts or on your company app. This data not only gives you a clear picture of what potential customers are looking for, but also highlights things like pain points and issues which you can then resolve to improve the customer experience and encourage greater conversion across your sales channels.
As we touched on above, most businesses combine several business analytics methodologies to reach their desired outcomes. That’s why, integrating a bespoke ERP system into your operation can be so beneficial – offering a single, unified interface on which to gather, analyse and present your data.
At JS3 Global, our ERP specialists have years of combined experience in helping businesses implement suitable ERP solutions for their operations. For a free, no-obligation chat about your requirements and how we can help, call our team today on +44(0)161 503 0866 or visit the homepage for more information.