There are many different fields of study and separate disciplines involved in managing a business, regardless of the size and scope of the company. Some components are absolutely crucial, and others are more advisable than mandatory.
The role of business analytics is one of the fairly modern and innovative tools for driving a business forward and is one that is growing exponentially in influence as the years go by.
So, with this in mind, whatever your individual motivations for finding out more about business analytics, you have come to the right place of information – continue reading to discover a basic guide to business analytics for beginners.
Business Analytics: What Does it Mean?
Essentially, the term ‘business analytics’ refers to the process within a company that uses quantitive, tried and tested methods to derive results, meaning, and information from collated and sorted data. Then, that data and its findings are used to create plans and influence important business decisions.
Overall, there are four key methods that are involved in the process of business analysis, which are:
- Predictive analytics – using statistical data to predict future business outcomes
- Prescriptive analytics – applying techniques such as testing to accurately determine whether or not the outcome of a particular business decision will produce the desired results
- Descriptive analytics– interpreting data from the past to identify patterns and trends
- Diagnostic analytics – interpreting data from the past to identify the reason why an event happened
The Benefits of Studying Business Analytics
If you are currently working in another area of a company or else are wanting a new and exciting challenge in another industry entirely, it would be prudent to consider studying business analytics – especially an online masters in business analytics through a reputable academic institution.
One major benefit of choosing to specialize in business analytics is that this particular area is predicted to become more and more valuable to potential employers, both across the length and breadth of the country and internationally.
In fact, the Bureau of Labor Statistics predicted certain job roles to grow in demand exponentially, such as operations research analysts – who use business analytics on a day-to-day basis. Amazingly, the bureau estimated the need for these particular professionals to grow by a huge 27% in the next three years.
Ultimately, there is a myriad of benefits to choosing to study business analytics, including the following:
- It will provide you with the possibility of taking on more leadership-based and senior roles within a company
- The ability to accurately forecast future trends and effectively predict the future of the company
- A fantastic way to improve your problem-solving skills
- A brilliant way to boost your communication skills
- You will learn to love working with numbers
- You will be afforded unprecedented teachings on how to interpret data
- A way to learn how to make much more informed and educated business decisions
Amongst a host of other topics, as a business analytics student, you will learn the following:
- Web analytics
- The use of software specifically designed for analytics
- Data for decision-making
- Decision models
- Descriptive and performance analytics
- Data mining
The Biggest Advantages of the Application of Business Analytics
Whether or not you choose to focus your studies and expand your knowledge around the discipline of business analytics specifically or not, it would still be incredibly helpful to familiarize yourself with the biggest advantages of applying business analytics to a company.
1. An Improved Level of Business Efficiency
A great and multi-faceted advantage of applying big data, data mining, and business analytics is that the company in question will experience a fine-tuning of any business operations.
One of the most effective uses of business analysis is that it can be utilized to quickly predict any potential issues or costly problems and nip them in the proverbial bud – as long as the analysis is conducted and carried out by an expert of course.
2. A More Informed Process of Decision Making
Another valuable benefit enjoyed by companies that apply business analytics to their core business model is that crucial business decisions can be made quickly and far more efficiently. Not only that, but they also use data mining and big data results in a more accurate decision-making process as well.
The type of business analysis most applicable here is that of prescriptive analytics. When used to compare the outcomes of various decisions, it can determine the direction a company takes moving forward and almost guarantees that problems and issues along the line will be minimal worst.
3. A Greater Overall Revenue
One of the most impressive benefits to a company that regularly invests time and energy into the effective application of business analytics is that they are almost guaranteed to benefit from substantial monetary returns.
A recent study published by the Bureau of Labor and Statistics in 2019 found that businesses that invest in business analytics and big data studies see an average of a six percent increase in their annual profits. Furthermore, the same study showed that, after the application of business analytics for five consecutive years, this percentage profit would increase to nine percent.
Not only that, but another study published in late 2020 found that businesses that use business analytics experience an average of a ten percent reduction in their overall annual costs and overheads.
4. A Way to Enhance Overall Company Security
In the modern world, both in a personal and a professional context, the threat of cybercrime is ever-present and is only set to become more dangerous and worrying. The use and application of business analytics and data mining are thus crucial in discovering why a previous data or security breach occurred in the past and determining how the company can fend off such an attack in the future.
Additionally, the IT department of a company can also use business analytics to help prevent the data breach from happening in the first place by setting up defensive software models to repel such cyber-attacks in an effective and cost-saving way.