In today’s fast-changing and unpredictable business environment, companies must take decisions swiftly and make them count. Business analytics provides an advantage, enabling decisions that are fact-based, real-time, and rooted in a single source of truth.
As MicroStrategy reports, organisations that bake analytics into their decision-making process earn more revenue and enjoy better outcomes. These companies can act quickly, safely, and profitably using descriptive, diagnostic, predictive, and prescriptive analysis.
Due to this, business analytics is a fast-rising priority globally, and there’s a greater focus on the value of data and the experts who can extract that value. Here’s a granular look at how data supports business judgment and why analytics professionals are vital to achieving this.
1. Analytical Exploration Clarifies the View
One thing that’s often said of business analytics is that it presents “the big picture”. It lets you consider more factors, relationships, and entities before reaching a conclusion. At the same time, analytics sharpens the viewpoint of managers and CEOs, allowing them better appreciate problems and potential solutions.
This is critical in business because great information enables excellent decisions. Business problems are rarely isolated incidences – they typically have several contributory factors. However, the process becomes compromised when conclusions are drawn from incomplete facts or too-small sample size.
Business analytics allows everyone to step back and see what scenarios feed into the problem, then come back with a better understanding. This expanded view helps companies identify root causes more accurately and plot a suitable path forward.
2. Business Data Provide Solid Evidence
Data doesn’t lie. When properly analysed, data backs up assumptions or disproves predictions, providing the backbone for accurate decisions.
Making hypotheses is one of the primary stages of problem-solving and decision making. For instance, when confronted with a crisis, good business leaders will theorise about what could be wrong from the nature of the situation. But going on to act using untested hypotheses will create bad decisions and poor outcomes for the company.
Instead, organisations can employ business analytics to assess the underlying data and test assumptions. Accordingly, a hypothesis may be confirmed or refuted by data, or the results may point to a more relevant line of inquiry.
In either case, the company can move forward with confidence, knowing that its conclusions and decisions are backed by strong evidence.
3. Business Analytics Delivers Piercing Insights
Business analytics not only provides better information; it can also deliver game-changing insights. Correctly cleaned and visualised data can help organisations uncover hidden connections, forming the basis for intelligent action.
For example, a KPMG report on trends in infrastructure discussed how companies use predictive analysis to anticipate and resolve operational issues. One of the surveyed companies, a mobile network operator, noted that it leveraged data to foresee outages seven days before occurrence, thereby saving costs and boosting operational efficiency.
Another way that companies employ business analytics is to analyse and predict customer behaviour. For example, an e-commerce company can implement analytical models to understand what products customers buy and why. That data also helps the company predict what other products would sell or even answer more profound questions about the viability of a business line.
Unsurprisingly, organisations that employ data in this manner fare 85% better than peers and do nearly 25% better in overall margins. Having insights at this level provides such refinement and accuracy to business decisions; it almost feels like cheating.
4. A/B Testing Facilitates Intelligent Choices
Business analytics is invaluable for companies faced with critical strategic decisions. Sometimes there’s great information that helps characterise the problem and enough data to formulate viable strategies, but it might not be clear what plan works best. When the option is between A or B, analytics reliably tells businesses where to go.
Uber’s effort to upgrade its Customer Obsession Ticket Assistant (COTA) is a great example of this benefit. In 2018, the company implemented prescriptive analytics to determine whether the tool’s new iteration – which uses natural language processing and machine learning to improve agent speed and accuracy in dealing with support tickets – would be more effective than the previous version.
Through A/B testing, which compares two choices and their outcomes, Uber concluded that the upgraded tool enhanced support speed and accuracy and increased customer satisfaction.
Without business analytics, the company would have been reduced to educated guesswork, which might have had negative revenue and brand impact. But with the insights gained from data, they could work smart and save millions in revenue along the way.
5. Business Metrics Enable Accurate Reflection
Lastly, business analytics enables forward momentum for companies and is also great for ongoing monitoring and measurement. Decisions take time to prove themselves, so there’s a need to assess impact and key takeaways, particularly for major judgment calls.
These companies can select, monitor, and measure the right metrics to determine if the effort was a hit or miss with their analytics capabilities. So, they not only gain the support to make intelligent decisions but can also accurately reflect and come away wiser.
Overall, these benefits showcase how analytics supports good business choices at critical junctures during decision-making. Whether that’s providing help with the context, proving or disproving hypotheses, or charting an intelligent course of action, business analytics is often worth its weight in gold.
But these insights don’t extract or interpret themselves. Instead, companies rely on skilled business analytics experts who can crunch numbers and distil contextual value that aids company goals.
If you’re interested in helping businesses work smarter and faster, taking a business analytics course can be a way to broaden your skillset and progress your career.