Analytics has been in existence for a long time, as it is used to help understand surrounding situations in order to make informed decisions with all these we should catch a glimpse of the importance of analytics to business.
The internet and information technology has made analytics very relevant in our current age. Analytics is a field which combines data, information technology, statistical analysis, quantitative methods and computer-based models into one. These all are combined to provide decision makers all the possible scenarios to make a well thought and researched decision. The computer-based model ensures that decision makers are able to see performance of decision under various scenarios.
Importance of business analytics
- Provides a competitive advantage to companies. In this digital age flow of information is almost equal to all the players. It is how this information is utilized makes the company competitive. Business analytics combines available data with various well thought models to improve business decisions.
- Converts available data into valuable information. This information can be presented in any required format, comfortable to the decision maker.
- Facilitates better understanding of available primary and secondary data, which again affect operational efficiency of several departments.
- Business analytics is a methodology or tool to make a sound commercial decision. Hence it impacts functioning of the whole organization. Therefore, business analytics can help improve profitability of the business, increase market share and revenue and provide better return to a shareholder.
Scope of Business Analytics
Business analytics has a wide range of application and usages. It can be used for descriptive analysis in which data is utilized to understand past and present situation. This kind of descriptive analysis is used to asses the current market position of the business and effectiveness of previous business decisions.
It is used for predictive analysis, which is typically used to asses previous business performance.
Business analytics is also used for prescriptive analysis, which is utilized to formulate optimization techniques for stronger business performance.
For example, business analytics is used to determine pricing of various products in a departmental store based past and present data sets (set of information).
Application
Business analytics has a wide range of application from customer relationship management (CRM), financial management, and marketing, supply-chain management, human-resource management, and pricing.
Challenges
Business analytics can be possible only on large data volumes. It is sometime difficult obtain large volume of data and not question its integrity.
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