Applications of Business Analytics
Introduction
The role of Analytics is widespread and important to make logical decisions for any new or existing endeavors. Analytics involves analyzing the past data patterns and applying them to take predictive, well-researched decisions that help in moving an organization forward. Like every other sector, analytics can take an active role in businesses too. The analysts use statistics, mathematics, and software programs through various stages of the business to provide predictive and prescriptive solutions to reduce errors, improve efficiency, and increase your planning capabilities.
In the modern-day, there is a lot of emphasis on using business analytics to evolve and grow. There are many applications of business analytics and this article will throw light on some of the important applications of business analytics in various sectors, examples, and business analytics uses in various sectors.
1. Application of BA
Applying Business Analytics (BA) to your business will give you the power to make informed decisions. It will change the way you build a product or deliver a service. It gives you the tools to process data, to answer the question ‘why?’ and to create future actionable items. You can see many real-time applications of business analytics in various aspects of business like finance and marketing. The analytics help making important decisions like deciding the costs and identifying the target customer.
For example, companies understand the pattern of their customers’ likes and dislike through analyzing data like clicks and shares on social media. We will be looking at some of the important modern-day applications of BA in the below section.
You can apply business analytics across all verticals of a business. It can be applied to finance, marketing, human resource management, CRM, and even manufacturing.
- Finance: Business analytics are a boon for the financial sector. Various divisions like investment banking, financial planning, portfolio management, budgeting, and forecasting can benefit greatly by implementing business analytics. The business analysts use data mining tools and statistics on the available financial data to observe the trends of similar products in case of a new product or observe the existing product to determine future actions.
- Marketing: Business analytics play a pivotal role to determine a successful product marketing strategy. Right from conducting market research for the product in demand, to creating a future road map for product lifecycle, the business analysts are involved through all the stages of the product. They start by analyzing consumer behavior, their buying patterns, trends to determine the target customer. They are also involved in other areas like determining advertising techniques, identifying loyal customers, and adding new features to the product when required.
- HR professionals: HR professionals can use business analytics to identify the potential candidate for the jobs available. They can use the widely available data and analyze the same to identify the right candidate based on their qualification and experience. The analytics can also be used to determine other factors like salary expected and retention rate.
- CRM: CRM can use business analytics to determine key performance indicators like the socio-economic status of customers, purchasing patterns, lifestyles, etc., to develop a bonding with the customer.
- Manufacturing: Different areas of manufacturing like supply chain management, inventory management, and risk management use business analytics to improve efficacy based on the product data.
2. Examples of Business Analytics
Let us look at a couple of real-life examples of business analytics.
OTT platforms: Many over the top platforms (OTT platforms) like Netflix, Prime, HotStar base on movies and series you have watched to suggest the right movies and series for you.
Amazon: Amazon is one of the biggest e-tailers in the world and one of the reasons is business analytics. For example, when you search for a product like a shirt on the website, will suggest similar products and also accessories for the shirt.
The following are examples of applications of business analytics in various sectors:
- Example of application of business analytics in finance: A stockbroker can advise about a particular stock by taking into account the historical chart of a stock, its current performance, and its future vision. Business analysts can understand the trend of the stock, predict its results, and advise the investor accordingly.
- Example of application of business analytics in marketing: While developing a new software product, business analytics can use data mining to collect data of a similar product, and analyze the same to identify the demand for the product, identify the target customer and even help in advertising in the right media.
- Example of application of business analytics in human resource management: A HR manager can use previous employment data of an existing employee to determine the retention rate for the employee.
- Example of application of business analytics in CRM: An online retail website can understand the purchase pattern of the recurring customer and determine targeted discounts and other advertising strategies for the customer.
- Example of application of business analytics in manufacturing: The historical data of 10-year-old machinery that has been decommissioned will help determine the depreciation value and number of years of the life of similar new machinery.
- Example of application of business analytics in credit card companies: The credit card companies identify their potential customer by referring to important financial data of the customer like their credit score, and spending patterns to offer credit cards.
3. Uses of Business Analytics
As the data keeps piling by the second, more and more organizations rely on business analytics to boost their business operations. If used in the right way, business analytics provide to be a powerful tool to build and grow and business. Typically, organizations use business analytics through different phases of a product or service lifecycle.
In the initial stage, the tools are used to conduct market research to collect quantitative and qualitative data on a product.
Many statistical tools are used at the next stage to analyze the collected market metrics. The analyst synthesizes the research data to define the new product and to determine its features. He also uses advanced analytics and statistical tools to determine hidden patterns and trends.
At the next stage, the analyst disseminates information to relevant stakeholders through interactive tools like dashboards and reports.
They provide all the required research and analysis to determine the future road map of the product and help in developing a winning product strategy.
To maintain a healthy business, the analysts provide data about the changing trends and help update to latest trends that change at a drop of a hat.
Conclusion
Business analytics helps you constantly develop your business. The analytics can be used in all stages of the business. You can use business analytics and their tools to start a new business, grow your business, analyze the current trends, create business strategies, and also to stay up to date with current trends.
If you are interested in making it big in the world of data and evolve as a Future Leader, you may consider our Integrated Program in Business Analytics, a 10-month online program, in collaboration with IIM Indore!
