Why Business Analytics is Important
Business analytics is the latest buzzword of the digital age. Let's take a look at what business analytics is and how it can benefit in the growth of your business.
Business analytics combines the use of statistics and other methods of analysis to gain actionable insights and gain competitive advantage by strategic decision making. Simply put it is the process of analyzing primary and secondary data and finding patterns, correlations, business trends, associations etc to help businesses make well-informed decisions.
Several studies have been done to establish the importance of business analytics. According to a study by Microstudy, data analysis can boost processes and cost efficiency by 60%, and assist in improving financial performance by 52%. Moreover, research shows that over the next three years investments in analytics will increase by 71% globally.
In the light of these statistics and up-and-coming global trends, business analytics will play a major role in decision support systems whether it's marketing strategies, business operations or customer experience. This is especially true for e-commerce platforms and online businesses. Since benefits of data driven solutions can be relatively easily applied to online platforms, the importance of business analytics for online businesses increases manifold. Engage by Zubi is an amazing full range data platform for e-commerce which ensures a boost in customer engagement and personalization of your online store by using the powers of data science and business analytics.
Phases of Business Analytics
A majority of online businesses or e-commerce platforms are now using some sort of business analytics tools to boost their sales and increase revenue. Application of business analytics tools allow online businesses the opportunity of better information management and informed decision making. However, before we explain the innumerable advantages of business analytics for online businesses it is important that we give you a little insight regarding three different types of business analytics. We will also explain a few buzzwords related to business analytics and describe the difference between them.
1. Descriptive Analytics
The first phase of business analytics consists of gathering, organizing, and describing the attributes of the data being studied. In traditional business terms, this is known as reporting. Descriptive analytics assist in answering what has happened but it doesn't reveal why something has happened or what might happen in the future. For example sales and revenue reports etc.
2. Predictive Analytics
Predictive analysis refers to the analysis of data from past patterns and associations. These patterns and associations are then used to predict future outcomes. For instance, a hotel might analyze their booking data to figure out vacancy periods and then drive their efforts towards filling those hours/days of the week as well. Finance companies might use it to detect suspicious transactions and halt possible fraud.
3. Prescriptive Analytics
This type of analysis deals with questions like what will happen, when it will happen and why it will happen. This third phase is very important for companies as it suggests a course of action / options for informed decision making. Companies like oil and gas make use of prescriptive analytics to decide where to drill and extract to minimize the impact on the environment.
Business Analytics vs Data Analytics
Data analytics is the process of collecting, processing and analyzing the available data. Data analytics is used to make sense of the available data in the form such that it is understandable for concerned specialists. Data analytics is a broad umbrella term used to refer to the science of analyzing raw data to identify trends and predict future events. The purpose of data analytics is not confined to only improving business processes and can be done for various reasons including research, experimentation etc.
Business analytics specializes in gaining insights and answering the question while keeping in focus their benefit to the business. Business analytics also focuses on steering the usual business processes in the right direction to maximize their outcome. In-depth knowledge and experience of data analytics and its various techniques is essential for successful business analytics.
Business Analytics vs Business Intelligence
Business Intelligence basically deals with proper reporting of the data collected in past and present business events. Business intelligence can be called descriptive analysis and it helps businesses in making informed decisions regarding their business activities.
Business analytics on the other hand uses data to perform predictive analysis on various aspects of the business. A business analytics tool like Engage by Zubi uses data mining, artificial intelligence, machine learning and modeling to predict likelihood of future business events. This helps in steering the business towards the right direction and ensuring an improvement in management of various aspects of any business.
Importance of Business Analytics
Now to further explain why business analytics is important we will look at some of the advantages that a business analytics tool like Engage holds for your online business. Engage uses business analytics by analyzing your data to create predictive models which results in increased efficiency in operation and allows you to make data driven decisions.
We rely on Artificial Intelligence (AI), Machine Learning (ML) and other analytic techniques to create a competitive edge for your business in the market. By analysis of the right data extracted from your online business we aim to increase efficiency of your business model in every aspect. Here are 10 major benefits a business analytics tool can bring to your business:
1. Enhanced Customer Experience
With so many choices available online, customers have an endless pool of products to choose from and as a result the traditional routes of marketing are not working anymore. Business analytics works as a saviour when businesses are looking for strategies for customer retention and driving new customers to their company. From customer preferences to the exact time slot when they interact with your website and past purchasing habits, all of this data is used to provide a customized experience to your customer.
2. Reduce Employee Turnover
Many companies bear the costs of hiring employees and not being able to retain them. It is a difficult feat to pick the right people from a competitive job market. HR professionals can use business analytics tools to examine the likelihood of potential employees aligning with company culture, values, long term goals and similar other factors. Predictive analytics will help you analyze data to recognize employees who will stick with the company.
3. Cut Costs
Every aspect of running a business costs money. From product selection to advertisement and from website or e-commerce store design to shipping and packing everything that you do has a price tag attached to it. It is upto business owners now to optimize all of these processes in a way that you increase efficiency while cutting down costs. This is where data collected by our tool comes into play. The insights gained through proper analysis of this data decision makers in any business can make informed decisions that will help in cutting down operational costs of the business.
4. Better Advertising
One of the most expensive parts of running a business is advertising. Recent advancements in advertising combine data and advertising which results in the psychological analysis of consumers with the data collected from their spending habits. This analysis includes landing pages, pop-ups, product captions and even the placement of images on your websites. By using our e-commerce tool, businesses can easily figure out the marketing channels that are more effective in driving traffic towards their online store. Not only this, they can also gain an insight into the channels that result in conversion of visitors into customers. By having this knowledge they can make more informed decisions as to which advertising channels they should invest more in and which to ignore for future campaigns.
5. Sail Through Uncertainty
Every business environment goes through phases of uncertainty where you become quite unsure as to what should be the next move for your company. Business analytics can help you make the decisions that will avoid your company to fall into an abyss or help you get out of one. Companies going through crisis management or are having difficulty managing their customer base and retaining market share need to realize the growing importance of business analytics.
6. Competitor Analysis
Almost every business starts with having a clear idea of who its competitors are. One of the most effective ways to get ahead in the industry is to study the strategies, USPs and missing pieces of your competitor and offering more than that. Conducting a SWOT analysis coupled with other techniques of business analytics will help you perform better compared to your competition. Not only will this help you in having a clear idea of the competition that you face in the market but also give you insights regarding your customers behavior.
7. Business Problems
Often businesses pause their operations while tackling a major problem leading to huge amounts of loss. Regular business analysis helps companies predict potential risks and avoid losses. By using the data collected through Engage you can get a deeper insight into the problems that your business faces and predict a failure before it emerges. This will allow you to take remedial actions beforehand and avoid downtime of your business.
8. Product Management
Retail companies have thousands of products to manage, it gets quite difficult for a person with no data to predict which product should be launched next and at what time. Business analytics help these retail chains figure out which product is popular in what region and at which particular season. The data gathered through business analytics tools like ours can be used to make informed decisions regarding product launch, product placement, sales, discounts and so much more.
9. Identify Frauds
Another application of business analytics can be to identify and even in some cases predict fraudulent activities on an online store. A lot of work is being done by experts in the field of data science and business analytics to train their artificial intelligence models in such a way that they can identify and predict frauds and help reduce the risk of online businesses.
10. Making the Most of Your Investment
This applies to all businesses but is especially true for online businesses and e-commerce stores. If you want to make the most of your investment, data is your best friend. Importance of business analytics and data driven decision making has proven to be a great success in every business and if you want to get the maximum ROI for your investment it is paramount that you start collecting and analyzing important data related to your business. This will help you in maximizing profits, customer retention, getting new customers and cutting operational expenses.
How to Start Employing Business Analytics
A lot of small companies, especially those running e-commerce stores want to apply the benefits of business analytics to their businesses or stores, however, they cannot afford the service of a business analytics expert. Fortunately, we have an amazing e-commerce data analysis platform, engage.zubi.ai that can seamlessly integrate with 3rd party e-commerce platforms.
Our tool has all the capabilities required to employ the benefits of business analytics and the customized packages are either free or so reasonably priced that any e-commerce store can easily avail their services and benefit from the wonders of business analytics. In the fast-paced world of e-commerce where raw data, machine learning, cloud computing and analytics combine together to identify trends and impact decision making, the importance of business analytics can no longer be ignored.
Business analytics directly combines data with business growth. In order to ensure that your online business becomes a success you need to tap into the world of data driven business growth using a business analytics platform like Engage by Zubi. The importance of business analytics has been practically seen and proven by a multitude of online businesses and stores and ignoring this side of e-commerce is no longer a luxury business owners can afford now. However, before jumping into the pool of business analytics make sure to have a clear idea of your goals as to what you would like to achieve with business analytics. Such as are you looking to cut costs, drive savings, increase your customer base etc and have quantifiable measures in place to know when the objectives are complete.