What is Business Analytics?
Business analytics encompasses all the tools and methods organizations use to iteratively measure performance and explore the data they produce. This includes a variety of tools that focus on statistical analysis, but also provide a broader range of interpretations and insights.
The process of business analytics is employed mostly by organizations that are looking to add insights to their decision-making processes alongside exploring strategies to optimize performance in key areas of their operations.
Business analytics is deeply based on statistical analysis techniques while incorporating both historic and forward-looking techniques. This is designed to help organizations not only understand their past performance, but also predict different areas that are critical for success such as inventory and growth forecasts, market trends, and more.
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Where business intelligence is focused on using historic performance analyzed through a consistent set of metrics to guide business planning, business analytics are more explanatory and predictive, focusing on trends, potential behaviors, and the best responses to these emerging finds.
Today, data analytics software includes important components of both business intelligence and business analytics, providing a more comprehensive and holistic view of an organization rather than just focusing on one technique over the other.
How Can I Use Business Analytics?
Today’s data-heavy business world produces significant opportunities for organizations to take advantage of advanced analytics. One of the most common uses in the corporate world is using analytics to find weaknesses or points of friction in organizational flows. Companies can identify points along the value chain that are causing losses or delays to understand why and how these chokepoints are being created.
Another common use of a business analytics software is in inventory management for major retailers which require constantly replenishing and sometimes costly inventory. Organizations that find themselves consistently lacking popular products, or over-ordering goods that stay on shelves can take advantage of descriptive analytics and predictive analytics tools. This way, they can understand existing trends and find the right balance of inventory to order. Using predictive modeling, they can also anticipate which products are likely to be in demand in the future to prepare orders accordingly.
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Organizations can even apply business analytics on a more granular level, understanding how each aspect of their business uses technology and financial resources. This can help plan better for resource usage as well as uncover reasons why certain areas are less efficient.