We live in a digital age where data is the new gold. Analysing this data can help give businesses a greater edge in a competitive marketplace, but with so much data now available, some businesses struggle to make use of it. Nevertheless, modern businesses must invest in analytics. There are many reasons for this, which we will explore below.
Improve Business Revenue
Businesses that have embraced the power of analytics have enjoyed financial returns. Research published by McKinsey shows that investing in data analytics can lead to a 6 percent jump in revenue. The financial returns are clear, but sadly not all companies elect to embrace business analytics.
Better Business Decisions
Business data is a useful tool for managers and executives that need to make more informed business decisions. For example, if you are considering a new product line, a detailed analysis of the current market might reveal there is limited demand. Or it could reveal previously untapped demand. Making important decisions without looking at the data is fraught with problems, not least that you might make the wrong decision and potentially cause significant damage to the business.
Strategic decision-making is something you can learn more about when you study for an MSc Business Analytics from Aston University Online. Students are taught how to identify patterns and factor in unknown correlations. This can make the difference between success and failure at all levels of a business.
Greater Business Efficiency
Data is useful for measuring efficiency in all areas of the business. You can analyse data produced by company vehicles, in warehouse storage and distribution, and more. Monitor how efficient workers are and how well your machinery functions.
For example, in-depth data analysis might show that older machinery in a manufacturing environment is hampering productivity because of repeated breakdowns. Further analysis might show that the cost of replacing older machinery with more modern and more efficient models will save money within 12 months.
In a competitive marketplace, businesses must understand who their competitors are. One way to do this is with competitor analysis. Companies can scrape data from competitor websites, analyse their products and services, and look deeper at their marketing strategies. Once available data has been analysed, it may offer some useful insights into how well the business is performing.
The happier your employees are, the easier it will be to retain them. In this regard, analytics is very helpful in the HR department. Data can be used to analyse whether a job candidate is a good fit for the organisational culture. Data is also useful for tracking existing employees and measuring their performance. Larger companies routinely use analytical tools to measure absenteeism, feedback, and how often employees leave the company.
There is always scope to reduce costs in a business, but not all business owners or managers can see where savings can be made. This is one area where business analytics can pay dividends. In the manufacturing sector, in particular, the advent of data analytics has made a huge difference. Businesses can now analyse vast amounts of data generated during the manufacturing process and see where efficiencies can be found. Even relatively simple tweaks to a manufacturing line may lead to significant cost savings, and in a highly competitive marketplace, this offers a lot of benefits.
Unless a business fully understands its target market, chances are a product or service won’t be as successful as it could be. Marketing to the wrong customers or trying to launch a product that already exists or for which there is no longer demand could destroy an embryonic business.
Thanks to the power of data, businesses can analyse the results of market research and make a more informed decision about their products and services. For example, data might reveal that there is a strong demand for one product, but only in a specific geographical area, which the business doesn’t target.
Boost Marketing Returns
Digital marketing is one area where data analysis really comes into its own. Thanks to online tools, it is now possible to analyse website traffic in great detail. Businesses can see where their customers come from, how long they spend on the site, which items are more popular, and more. This means even the smallest things can be tweaked to improve conversion rates. Everything, from website copy and images to pop-ups and call-to-actions can be evaluated and changed if necessary.
There are lots of analytical tools businesses can use, such as A/B testing, and all of them will ensure you maximise the success of your marketing strategies.
Resolve Operating Issues
Never underestimate how badly operating problems can impact a business. The Covid-19 pandemic has shown us how harmful issues like supply chain interruptions and a loss of paying customers can affect a previously profitable business.
Analysing data helps businesses manage risk. This, in turn, helps them mitigate the likelihood of future loss and they can take steps to put systems in place to prevent and manage such loss. Data is also useful for allowing managers and executives to identify ways to solve present and future problems.
How to Make Better Use of Business Analytics
Now that we have illustrated just how important business analytics is to an organisation, how can you incorporate it into your business? One way to reap the fruits of business analytics is by hiring people who have a deeper understanding of the power of analytics.
Anyone with an advanced degree will have been taught about data analytics and how to harness the power of data. Look for candidates with an MBA, or more specifically, with concentrations in data analytics. If you want people with more in-depth skills in interpreting data, hire data analysts. They can analyse and model data to solve problems and help with strategic decision-making.
Never underestimate the importance of data in the modern world. As time goes on, raw data is likely to become increasingly important.