What Is The Importance of Business Analytics?
In this article, we will delve into the world of business analytics to understand the importance of business analytics by first describing what it is exactly. It utilizes tools, various data aggregates, and technologies to solve day-to-day business problems as well as to make higher-up managerial decisions. It is a methodology used as a prescriptive and predictive analysis tool based on past data analytics.
Predictions on futuristic trends can be made as well as the best possible outcome for the business decision that needs to be arrived at. Predictive analytics is self-explanatory and focuses on gauging future outcomes while prescriptive analytics is used to answer basic as well as complex business questions on a day-to-day basis.
We see the use of these methodologies across industries such as IT, healthcare, Pharma, education, customer relations, Human Resource Management, Supply Chain Management, and Financial Management to name a few of the applications in various companies and platforms.
The History of Business Analytics
Analytics have been used by businesses since the advent of the 19th century. Therefore, it has been around for a very long time more than two centuries to be precise and it has developed with the advent of newer and better technologies over the course of time since its inception.
That is to say, the importance of business analytics has only grown with time. It was not a methodology used for predictive and prescriptive purposes back then but simply for figuring out basic business solutions. After this, Henry Ford used data analytics to measure the time of each of the components in his assembly line for manufacturing purposes.
It also has its roots in military research being used in World War II for research analysis and purposes. After this, these methodologies were incorporated by businesses for operations and management research purposes.
However, with the explosion of the use of computers, analytics have become more and more in demand and continue to remain a thriving career alternative for those who are interested in the same and have a data-driven aptitude. It is a widely used management science.
It is a sought-after career with a very earning potential worldwide. We live in a world where we cannot imagine making business decisions without the tools we have today.
The Importance of Business Analytics
Simply put the importance of business analytics in today’s day and age is immense. Companies need to utilize data analytics on a regular basis to stay competitive and to maintain an edge over the competition of the other companies in their given industries.
It helps them to generate more and more profit, in decision making as mentioned earlier, and to quantify decisions from primary as well as secondary data. It is used more and more for market research as well as to understand consumer and customer behavior to in turn focus on their target audience as well as their market outreach.
It is used to understand operations on a day-to-day level while realizing business outcomes and future growth models. It can be used for past and future performance-related queries and business decisions. It can also be used to find basic as well as complex business solutions in order to eventually accentuate sales and profits and in turn create growth and revenues for the business in question.
It can be used to investigate hidden trends that would otherwise go unnoticed. Many statistical and data-oriented tools are used to derive analytics of this form for varying businesses and industries. Thus we realize, that in this digital age of tools, the importance of business analytics is staggering and it is crucial for various if not all aspects of data-driven business decision-making.
Benefits of Using Business Analytics to Further Elaborate the Importance of Business Analytics
The following are the key and major benefits of using these skills and technologies thus reiterating the importance of business analytics further-
- Helps businesses to measure their progress. Businesses have key objectives and analyzing data helps to measure these main objectives. Such as making sure that their end consumers are satisfied, sales are high, and even vendors and distributor channels are maintained and streamlined.
- Helps to make faster and easier data-driven decisions. It helps to make data-driven decisions that keep the stakeholders as well as the customers happy and satisfied. Therefore, it helps to make efficient data-driven as well as daily operational business decisions.
- Helps deliver clearer insights. Data visualizations in the form of statistical analysis and graphs help to deliver data in a succinct and visual format. Data visualization is also used for the layperson who may not be familiar with the technicalities and therefore data visualization is key for all types of audiences.
- Helps keep the businesses relevant. It helps to analyze consumer data and market research, identifying the target audience as well as their likes and dislikes keeping the material relevant to the aforementioned target audience.
- Helps to solve business problems. This point is probably the most crucial one of all of the benefits mentioned earlier. All businesses have operational problems this is where analytics comes in to solve those problems and deliver a more streamlined approach to the operations and in turn drive up sales, revenues, and profits.
The Scope And Future Of Business Analytics
As the world of computers, the internet, and data grows, so too will the world and importance of business analytics. As companies seek a competitive advantage, large amounts of data are analyzed to crack business decisions, this phenomenon will keep growing and there will be no shortage of jobs or opportunities in these prospective careers.
It must be noted that these methods are experiencing major disruptive changes that will affect the outcome and the future outlook of them but these jobs and careers are on the rise and are very much a part of the future world game. More and more cutting-edge technologies and data integration will be used by businesses and their vertices as seen by the future trends of 2023 onwards.
Therefore, the scope and future are expansive and ever-growing as it is being used by businesses of all shapes and sizes to make sound business and operational decisions. It has become the key area of focus in most industries.
What is the Typical Skill Set Required for Business Analytics?
As there is a surge and growth in the importance of business analytics, there is a wide range of expertise required for the field of analytics. A business analyst typically processes data and therefore analyses it for day-to-day business solutions such as improving sales, revenues, and profits while cutting operational costs.
A business analyst will meet client needs and requirements through the process of data analytics and data visualization. The business analyst will ensure that they use data analytics to solve and give a need-based solution to the client’s problem. They may work internally or externally but eventually, their goal is to provide an adequate and accurate solution to the client.
The scope and landscape of business analytics are constantly and forever changing and morphing; however, there are some core intrinsic competencies that remain the foundation of the skill set of every good business analyst. They are as follows-
- Good communication skills- It is not enough to just be good with data and numbers, as an adept business analyst one must be able to tell a story and deliver the information from the processed data in a clear and concise manner that is to say one must be able to present the data even to a lay person in a non-technical language. Therefore one must have exemplary communication skills.
- Problem-solving- A good business analyst must have excellent reasoning and logical thinking skills and should be able to connect the dots to give good results in their career and day-to-day job.
- Organizational skills- A good business analyst must be methodical in his or her approach and be able to translate and transmute raw data in a logical manner to make it presentable to the client and the team.
- Visualiser- Data visualization and presentation are key in the daily responsibilities of an adept business analyst. As mentioned earlier it is not just about crunching the raw numbers but also adequately presenting the data in an appealing manner to provide adequate business solutions.
- Strategy- A good business analyst must also learn to strategize with the raw data given as it is not just about the raw data but ultimately about providing business solutions to the operational problems. Therefore, the business analyst must be able to think outside the box and provide solutions.
- Detail-oriented- In order to connect the dots, the business analyst must not miss a minute and minuscule connections and must therefore be extremely detail-oriented in his or her approach to the business issue at hand.
- The quest to learn- A good business analyst is a quick learner and is always looking to learn more and more as there will always be business problems and issues for which solutions will need to be evaluated through the science of business analytics.
- Team-oriented- The business analyst must be a team player as most organizations in this day and age work better and more effectively in teams. He or she must be able to deliver in the role as an effective and malleable team player with also the ability and the expertise to handle individual assignments that are their due responsibilities.
- Technical expertise- Apart from all the soft skills mentioned earlier the business analyst must have a strong understanding and expertise in various software that are used in everyday business analytics such as SQL, SAS, Python, R, Tableau, and Teradata to name a few.
- Typical qualifications- Historically it is seen that most business analysts are hired from the fields of Economics, Management, or Engineering.
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Top Careers in Business Analytics to Further Reiterate the Importance of Business Analytics
In the current economic scenario, careers and jobs in the field of business analytics are booming and it is forecasted to continue to do so. First, let us delve deeper into what a business analyst typically does in his or her job. A business analyst is supposed to constantly improve given business scenarios and make sound and optimal business solutions on a day-to-day basis.
There are numerous fields that business analysts work in such as E-Commerce, Finance, Banking, Agriculture, Healthcare, Education, and Manufacturing to name a few of the fields. The following are the top careers in the field of business analytics-
- Data Analyst- A data analyst works as a gatekeeper of the organization evaluating and processing primary as well as secondary data. The average per annum salary of a data analyst is 5 lakhs however that may vary through a wide range depending on the skill set as well the experience of the data analyst. They are also responsible for identifying trends among their other responsibilities in data management.
- HR Analyst or Human Resources Analyst- An HR Analyst is in charge of improving the organization’s basic workforce and training skills. Among other responsibilities, the HR analysts are in charge of improving the hiring process and managing the attrition rate of the organization in turn creating a productive workforce overall. Their average per annum salary is also 5 lakhs with a wide range depending on skill set and experience levels.
- Financial Analyst- A financial analyst is responsible for driving up the profit share of the organization by analyzing the microeconomics and the macroeconomic environment and data. They are also responsible to identify astute investments for the company to make and for-profit and loss analysis. The average per annum salary of a financial analyst is 4 lakhs again depending on skill set and expertise.
- Supply-Chain Analyst- A Supply-Chain Analyst analyses the supply chain of the business, and carries out various data analysis, and inventory analysis among other responsibilities to optimize business operational solutions. The average per annum salary is 5.5 lakhs again depending on the experience and skill set of the Supply-Chain Analyst.
- Marketing Analyst- A marketing analyst carries out market research on past, present, and future consumer behavior and uses data analysis in order to identify market trends. The average salary of a marketing analyst is 7.9 lakhs depending on experience and skill set.
- Data Scientist- This is one of the most lucrative and high-paying careers in the field of business analytics with a whopping average salary of almost 11 lakhs per annum. They use data algorithms and machine learning as part of their day-to-day operations to amass, decipher, and code large amounts of data.
Therefore, as seen by the wide range of the aforementioned career options, the scope and importance of business analytics are immense.
Check here for the best Business Analytics Courses in India
Applications in the Form of Case Studies Of Business Analytics Across Industries
1. The use of analytics in healthcare –
The importance of business analytics is huge, especially in the industry of healthcare. In the domain of healthcare, data analytics is key and crucial in gaining knowledge within various therapeutical areas as well as gaining a competitive advantage in the overall healthcare industry. It is used in decision-making for those in the healthcare industry who are at the cusp of life-changing as well as life-saving discoveries and innovations. The following are the ways in which data analytics can be used in the industry of healthcare.
- To reduce overall cost and in turn, drive up profit share- The cost of innovation of new drugs is on the rise more and more nowadays, this is where data analytics comes in handy primarily to see where aggregate costs of new drug innovation can be brought lower thus, in turn, resulting in an increase in profit share. Predictive algorithms are used to cut costs after analyzing historical trends and data points.
- Improving clinical trial outcomes- Pharmaceutical analytics is used to improve the efficiency of clinical trial outcomes as well as to improve disease diagnostics. Historical data points are used for the same.
- To deliver precise medications- Data points and analytics are used widely to improve the efficacy of the medicines used in the market today.
- Use in market strategies- Data analytics is used widely to study market trends and the study target audience providing pharmaceutical companies with a competitive advantage.
2. The Use of Business Analytics in Human Resources-
The importance of business analytics is big in Human Resources to optimize Human Resource Management and organizational behavior as well as for strategic planning purposes. It can be used to measure the financial impact of certain Human Resource practices and plan for critical and crucial Human Resource organizational changes and hierarchies.
It can also be used to predict future outcomes and the ongoing pertinent trends of the workforce of the businesses and their verticals. Simple and complex data analytics tools are used to make informed decisions regarding Human Resource Management related queries such as workforce optimization. Therefore, it can be garnered that analytics can be used in every and all aspects of Human Resource Management.
3. Analytics as used in the Airline Industry-
The importance of business analytics is huge in the airline industry. Airlines such as Lufthansa, Air France, British Airways, etc. are big into the use of these specific technologies for their daily operations and business solutions.
They combine various modes of big data analytics and business intelligence for their various data ecosystems. One of the major areas is increasing revenues by optimizing flight routes and flight paths taken by the flights. Using data-driven knowledge is a big way to generate revenues and maintain a competitive advantage.
Frequently Asked Questions
1. What does business analytics comprise?
It comprises three basic types of analytics. The components are as follows-
- Descriptive analytics- Here we use historic data aggregates along with data visualization and other data mining tools to come up with business solutions and trends.
- Predictive Analysis- Here we use vast amounts of data-driven information to identify upcoming and ongoing trends and to eventually analyze various future business outcomes.
- Prescriptive analysis- Here we use data points to decipher business operational solutions and navigate the course of the respective business.
2. Is a career in business analytics a lucrative one?
The career of analytics is on the rise as businesses will continue to seek solutions for their day-to-day problems and issues. As long as there are businesses, we will see a rise in the need for business analysts that is to say that these jobs and opportunities are not only here to stay but they are on the rise for the foreseeable future. Yes, it is a very lucrative option for those with a data-driven mindset.
3. What are the skill set and requirements for a business analyst?
A business analyst must be a critical thinker with a background preferably in coding to amass and decipher huge amounts of data. He or she should preferably be well-versed in Python or SAS to name a few coding platforms. They should also be able to carry out data visualization as that is a key requirement of a business analyst. They should love to ask questions and be solution driven in order to have the required mindset to solve business-oriented problems and issues. They should have excellent reasoning, logical, and solution-driven skills.
4. What are the applications of business analytics?
It can be used in any and all fields to provide solutions to various business problems. The scope is enormous from IT to Pharma to healthcare to Human Resource Management just to name a few; big data analytics are technologies used for any industry which has a business solution to solve and wants to generate an outcome. All businesses are growth driven and data analytics is used primarily to ensure profit-margin growth among other business problems.
Conclusion
The scope, future, and importance of business analytics are ever-growing and expansive. With the advent of cloud computing and data visualization, we see more and more users and applications of these technologies. As mentioned earlier as long as there is a business problem and a need for a business solution there will be a need for big data analytics. We will need it to solve various problems in the upcoming years and there will be no career shortages. If you feel you have a sound logically driven mindset then this might be the career for you. Check out your aptitude for jobs in this field!
