Data has always been one of the most essential components of any business. Without data, many businesses would be unable to make essential decisions or even track their success. For companies that track this, they have likely heard of business analytics. While this term is popular, it can be confusing to actually nail down what this is.
In this article we will take a brief look at business analytics and why it is so important to businesses of all sizes.
Business analytics definedWhen experts talk about analytics most audiences will agree that it is the analysis of data and statistics. The vast majority of business owners have some experience with analytics, with some having even taken courses on it at University. This being said, the idea of business analytics is often hard to pin down - ask 10 people and you will likely get 10 different answers defining what exactly it is.
We like to define business analytics as a process rather than a science. This process uses skills, business experience, technology, applications, and common business practices, to enable business owners, managers, and employees to explore past performance. Simply put, it's the study of the past performance of a business.
With most businesses, the goal of business analytics is to gain insights into the state of the company, and even drive future decisions based on existing data. If you can successfully implement a business analytics process, you and your employees will gain a higher understanding of your business which will lead to better decision making abilities and even higher growth and profits.
What makes up business analyticsAs we noted above, this is a process that involves a number of separate components. Four to be exact:
- Analytics - Using modern data mining and predictive tools to identify patterns that can help make better business decisions and give managers foresight into potential future trends. Usually the questions answered include, "What is the best outcome?", "Why did this work?", etc.
- Data management - This covers the collection and storage of data. Concepts include how and where the data is stored, who has access to it, how it is accessed, and even when it can be accessed. Some examples of this include using cloud-based storage or even a storage server that is hosted in the office. When looking at data management in terms of analytics, most managers will concentrate on what has worked in the past, why it worked, and what will work in the future.
- Business Intelligence - This is the use of reporting tools and dashboards to gain an understanding of largely event-based questions like, "How many?", etc. When you implement business intelligence operations you will normally gain better insights into current events and what happened in the past to influence them.
- Performance Management - This broad term covers actions and tools that are used to track and manage business performance. This includes tasks such a financial reporting and budget forecasting.
If you are looking to learn more about using business analytics or the components that make up this process, contact us today to see how our solutions can help.