Business analytics (BA) refers to all the methods and techniques that are used by an organization to measure performance. Business analytics are made up of statistical methods that can be applied to a specific project, process or product. Business analytics uses quantitative techniques to arrive at optimal decisions making. Business analytics are performed in order to identify weaknesses in existing processes and highlight meaningful data that will help an organization prepare for future growth and challenges.
Business analytics play a vital role in any business. Business analytics make up a large portion of decision support systems, continuous improvement programs and many of the other techniques used to keep a business competitive. Consequently, accurate business analytics like efficiency measures and capacity utilization rates are the first step to properly implementing these techniques. improved business intuition for making efficient strategic and tactical business decisions of real economic consequence
Business analytics is the practice of iterative or repetitious, methodical exploration of an organization’s data and they center on coming up with new perceptions and understanding of business performances with an emphasis on statistical analysis. Companies use business analytics that are committed to data-driven decision making which can be used as input for human decisions or may drive fully automated decisions.
The need for good business analytics has spurred the creation of business analytics software and enterprise platforms that mine an organization’s data in order to automate some of these measures and pick out meaningful insights.
Need of Business Analytics
It is estimated that, every day, around 15 petabytes of new data is generated. Intelligent analysis of this data gives penetrating insight, aiding critical decision making. it helps to augment customer delight and increase market share by optimizing process and product pricing, refining product offerings and understanding customer behavior among other things. Todays volatile & competitive market makes it imperative for enterprises to leverage big on data and analytic solutions.
Role of Business analytics
Business analytics plays a relatively crucial role in any corporate organization. It is a methodical approach for bringing in and managing change in enterprises. Management relies on business analysis to come up with solutions that can enhance the value provided by a business entity to its shareholders. The business analyst needs to work from corner to corner of the company that he or she represents. These functions can include formulation of strategies; producing enterprise architecture in line with information management; taking a lead to define objectives and needs in making programs successful; and, sustaining initiatives in information technology.
In the field of business analysis, the primary task of the analyst deals mainly with the following:
- Determine the fundamental requirement of the business that needs to be resolved and gather information relevant to projects and products being undertaken by the company.
- Analysis of requirements which entail organization and specification just to make sure that findings are clear and complete.
- Documentation of said requirements in a configuration which can easily be recognized by stakeholders of the company.
- Validation of conditions to make sure that these are in accordance with standards of quality and approved by individuals with interests in the business.
From time to time, the field of business analytics requires more complex activities like planning and more intricate management functions. However, the core of this expert’s responsibilities revolves around investigation. The business analyst conducts research and interviews to observe and understand the operations of specific areas and disciplines. These things are done inside and outside the organization.
Considerable time is spent in the analysis of information acquired through business analytics tools. These facts and statistics are evaluated carefully for pertinent trends and designs. The analyst makes it a point to assess these pieces of information thoroughly. Each item must be current, systematic and accurate. The analyst investigates profoundly for sources of problems and determines latent solutions. Incidentally, ample time should be spent for analysis and comparison of solutions to balance them as against real needs.
In business analysis, you have to engage in a lot of proactive communications and coordination. This is not limited to pure conversation but paying attention to oral and written messages, initiating open discussion, confirming that the target audience understood your messages clearly, and conveying things these people learned to those who create the actual solutions. Documentation of all observations and findings is important in business analytics. These professionals need to contemplate very carefully on the most effective ways to verify particular forms of information in all forms (illustrations, pie charts and graphic interpretations). The business analyst is also tasked to identify possible alternatives to address issues and choose the best answer for the problem. The key is to meet requirements and select the most effective process for implementation. Ultimately, the success of the enterprise will depend partly on the business analytics program being implemented by the company in line with its principal goals and overall vision. These are among the concerns in business analysis that management has to look out for.
The role involves analyzing multiple data sets to predict trends that can be used to take crucial business decisions. It involves writing reports based on complex data models for stake holders inside & outside the organization and providing strategic recommendations and direction against key business objectives. Overall the person helps to deliver communication of analytic insights.
Application of Business Analytics
The use of Business Analytics is widespread across all industries and functions, including Information Technology, Web/E-commerce, Healthcare, Law Enforcement, Telecom, BPO, Retail , Statistical organization, Rating agencies ,Banking and Insurance, Biotechnology, Human Resource Management. Some of the application areas include critical product analysis, target marketing, customer lifecycle management, customer service, social media behavior and link analysis, fraud detection, genetic research, inventory management, etc. Business analytics can also be used to evaluate an entire company.
Furthermore, business analytics is used to increase insights that enlighten business decisions and can be used to systematize and enhance business processes. Companies that are data-driven treat their data as an asset and leverage it for competitive lead. Successful business analytics depend on data quality – an assessment of the data’s fitness to serve its purpose in any given context, the aspects of which include accuracy, completeness, updated status, relevance, consistency across data sources, reliability, appropriate presentation and accessibility. Another factor that successful business analytics depend on is, of course, skilled analysts who understand the technologies and the business, and as mentioned earlier, who are committed to data-driven decision making.
Some of the examples of the uses of business analytics are exploring of data to look for new patterns and relationships or data mining, clarifying of why certain results transpired or statistical analysis or quantitative analysis, experimenting to test earlier decisions or A/B testing or multivariate testing and forecasting future results or predictive modeling or predictive analytics.
As soon as the business goal of the analysis is determined, an analysis methodology is carefully chosen and data is obtained to back up the analysis. Extraction from one or more business system, cleansing and integration into a single repository like a data warehouse or data mart are often involved in data acquisition and the analysis is normally done on a smaller sample set of data. The analytic tools used are usually spreadsheets, statistical functions to complex data mining and predictive modeling applications. As patterns and relationships are revealed, new questions arise and the analytical process is reiterated until the goal of the business is met. Placement of predictive models includes scoring data records which are typically in a database and making use of the scores to boost real-time decisions within applications and business processes. Business analytics or BA likewise supports strategic decision making as a response to unpredicted happenings. In most cases, the decision making is programmed to support real-time responses.
Benefits of business Analytics
- Improving productivity
- Improving competitiveness
- Improving the decision making process
- Better alignment with strategy
- Increasing revenue
- Synchronising financial & operational stratergy
- Speeding up of decision making process
- Cost cutting measure
Type of analytics
- Descriptive Analytics: Gain insight from historical data with reporting, scorecards, clustering etc.
- Predictive analytics (predictive modeling using statistical and machine learning techniques)
- Prescriptive analytics recommend decisions using optimization, simulation etc.
- Decisive analytics: supports human decisions with visual analytics the user models to reflect reasoning
Basic domains within analytics
- Retail sales analytics
- Financial services analytics
- Risk & Credit analytics
- Talent analytics
- Marketing analytics
- Behavioral analytics
- Cohort Analysis
- Collections analytics
- Fraud analytics
- Pricing analytics
- Supply Chain analytics
- Transportation analytics
Challenges for Analytics
Business analytics depends on sufficient volumes of high quality data. The difficulty in ensuring data quality is integrating and reconciling data across different systems, and then deciding what subsets of data to make available.
Previously, analytics was considered a type of after-the-fact method of forecasting consumer behavior by examining the number of units sold in the last quarter or the last year. This type of data warehousing required a lot more storage space than it did speed. Now business analytics is becoming a tool that can influence the outcome of customer interactions. When a specific customer type is considering a purchase, an analytics-enabled enterprise can modify the sales pitch to appeal to that consumer. This means the storage space for all that data must react extremely fast to provide the necessary data in real-time.
Why the Business Analytics are in great demand
In the age of fierce competition, tight margins and demanding customer, enterprises are under constant pressure to perform. The need to run organization in a smart way has never been so vital and analytics are seen as a magic potion to achieve great result in todays competitive & vibrant market space.
Career in Business Analytics
With organizations acquiring vast amounts of data at an unprecedented pace, the demand for professionals with strong business analytics skills has never been greater. Today’s leading companies recognize that employees with a good understanding of general business, coupled with strong exposure to analytics techniques and database management tools, are critical to the enterprise’s long term success. Business analytics programs prepare students for a wide range of careers across a broad spectrum of industries.
Qualification & experience required:
Graduate or Post Graduate in Mathematics, Economics, statistics , econometrics, Computer science engineer , CAs, CMAs professional etc. who are good in number crunching are best equipped to play the role of Business Analytics.
PRE – REQUISITES FROM PARTICIPANTS
• A working knowledge of basic mathematics and simple logic, in addition to basic management functions
• Participants are also expected to have basic familiarity with Microsoft Excel
• Aspiration and ambition to excel by employing logical and analytical tools that provide a higher, deeper level of understanding and insights into the decision-making process
Education & Training
The demand for trained analytics professionals has witnessed a massive growth in recent years. The dearth of skilled manpower can be overcome with serious intervention at the education level and imparting training on specific Analytical and statistical tools. Training in Analytics is of foremost importance to match the ever growing demand and dearth in supply
Considering the huge requirement of trained manpower in the Business Analytics domain, following institutions in India have started offering customized course to fill the gap.
1. Indian School of Business (ISB), Hyderabad
2. IIM , Ahmedabad , Bangalore, Calcutta , Lucknow
3. IIT , Mumbai
4. NIIT Imperia
* The author is a Fellow member of The Institute of Cost Accountants of India, Associates Member of The Institute of Chartered Accountants of India, MBA (Fin),CIPM & M.Com (Gold Medallist). Presently working in NHPC Ltd. He can be reached at firstname.lastname@example.org.