A solid business decision needs to be based on more than just a gut feeling. It takes quantifiable data to choose the right path for your company, leveraged in a process known as business analytics. Today, we’ll explore this process, as well as discuss a few ways you can use it to your advantage.
What Are Business Analytics?
To begin, let’s picture a spinner, divided equally into sections numbered “1” through “5.” Each time we spin the spinner, the arrow lands on a different number. Let’s assume we have some time on our hands, so we spin it 100 times. At the end, it has landed on “1” a total of 13 times, “2” a total of 22, “3” a total of 18, “4” a total of 18, and “5” a total of 29 times.
If we were to predict what the outcome of another spin may be, under the same circumstances, this data could help to inform this prediction. For instance, we could predict with reasonable confidence that the spinner would land on an odd number, not only because there is a higher probability of that outcome (3/5 as compared to 2/5), but we have historical data. Out of 100 spins, the outcome was odd exactly 60 times.
Why is this relevant?
When we consider business analytics, the purpose is to make predictions based on past results and statistical likelihood. In this case, we can predict with reasonable confidence that the spinner would land on an odd number if spun again, based on both the probability and the evidence suggesting that probability would be reflected in the results.
Business Analytics in Action
While business analytics tend to be a little more complicated than that, the basic idea is the same. By taking collected data and studying it for patterns you are able to make better decisions from an informed position. This can manifest in your business processes in a few different ways.
- Data Mining – Data mining, or the analysis of data to identify trends and opportunities that were previously overlooked, is streamlined by the incorporation of business analytics. As a result, the desired improvements are only made better.
- A/B Testing – Utilizing the A/B testing process, a company is made more able to optimize the decisions they make in the future, as well as revise those that were made in the past. This process hinges on the use of analytics.
- More Accurate Predictions – Along with a better sense of why a certain outcome was the result of an action, business analytics can be used to identify the best course for an organization to take through statistical analysis and predictive modeling.
Using Analytics to Your Advantage
There are any number of ways that business analytics can be leveraged to directly influence your business procedures. Take your sales process, for example: data can provide you with deeper insights into your client/customers’ behaviors, which can in turn be used to more effectively target your audience and optimize the profit generated through serving your existing base. In addition, analytics can assist you in streamlining your inventory management, managing your business finances, and benefit a great number of other business-essential tasks.
Would you like to do more to leverage analytics and data as a benefit to your business processes? Michell Consulting Group can help. Reach out to us at 305-592-5620 to learn more.