Business Analytics 101: Putting Your Data to Work for You
Business analytics (BA) is the practice of iterative, methodical exploration of an organization’s data, with an emphasis on statistical analysis. This method is used primarily by companies committed to data-driven decision-making. Simply put, BA is using your historic business data to make smart business decisions for the future.
Just a few examples of successful applications include Capital One using BA to determine which customers are good credit risks based on the customer’s past behavior; E & J Gallo Winery using BA to predict which of their wines will be the most popular; and Harrah’s using BA in conjunction with their player loyalty program to determine which offers will be the most effective.
Elements of Business Analytics
There are a number of elements involved with Business Analytics.
The practice of BA is not about sifting through mountains of data reports, but rather creating the reports that work best for you and using that specific information to guide your future business decisions, whether or not the data results go along with your “gut” reaction.
Yet another element of BA is an easy-to-use dashboard that keeps all of your key metrics on one convenient screen. With BA, you can also create projections that allow you to visualize future results based on different variables.
Gathering Information Across Multiple Data Sources
Unlike several other method of statistical analysis, BA makes use of historic and real-time data from a variety of sources, both internal and external. For instance, a restaurant or retailer can react quickly to an unexpectedly popular new item and make sure that outlets have enough products available to satisfy this unanticipated demand.
Using Business Analytics to Measure ROI Across Channels/Departments
Another advantage of using BA is that this method of forecasting cuts through departmental lines and looks at company metrics as a whole, not just those of one or two segments within the company.