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As time goes on and technology advances, we are hearing more and more about data analytics in literally every area of our lives today. From political campaigns to setting corporate budgets, and everything in between, there isn’t an area of our lives that can’t be quantified or qualified through the analysis of relevant data.

The same holds true for businesses of all sizes and within all industries. If you are the owner, director, or general manager of a business, enough cannot be said about the importance of having a sound grasp of how data analytics can be applied to literally every aspect of your operations. To better explain this, let’s look at the following six benefits for your business.

What Exactly Is Data Analytics?

You will most often hear of data analytics within the field of marketing, but your company’s use of analytics shouldn’t stop there. From the term, it’s easy to extrapolate a simple understanding in terms of gathering information (data) to analyse. However, it isn’t as simple as that.

It is a process for gathering data or statistics in order to root out meaning from sets of raw data and data analytics today requires the use of specialised computer systems to:

  • Organise
  • Transform
  • Model
  • Identify patterns
  • Draw conclusions

It’s rather a statistical analysis to see what is working, what isn’t and how you can make improvements or adjustments going forward.

The key takeaway here is that because of those highly specialised computer systems, an analysis can be achieved in nanoseconds once the data is collected. Whether you have an in-house data analyst or outsource analytics, it pays to fully grasp the facts and figures before you, and this is why you need to gain proficiency in such seemingly monumental tasks. Yes, it’s huge but you can gain proficiency with a master’s in business analytics from institutions like Aston University.

1. Improves Process of Making Decisions

How many times in a day are you asked to make a decision on something? Perhaps you are asked about choices in suppliers, shippers and other B2B concerns. Unless you are given a comparative analysis, you could be making a poor business decision. For example, supplier #1 offers parts that are 25% less expensive than supplier #2 but many of those parts are defective. Through data analysis you can quickly discern that the pricier of the two companies is really the most cost effective because of a reduction in waste.

2. Better Understand Data-Driven Marketing

Very few companies have in-house marketing teams so you will often be approached by your outsourced marketing firm with suggestions for marketing campaigns. They will talk about such things as how to define your target market, where best to reach that audience and what types of marketing are most effective. They obviously gathered and analysed raw data to come up with those findings. However, by having a working knowledge of the field, you can give a much-needed perspective on prioritising marketing strategies based on your particular analysis.

3. Personalisation, Loyalty and Retention

Let’s return to the field of marketing for just a moment. One of the main areas in which business analytics can benefit your company is in terms of what has been effective in the areas of personalisation, loyalty, and customer retention. Here again, raw data shows you what worked, what didn’t and those strategies that led to mediocre results. While marketers know marketing, they perhaps don’t know your target audience quite like you do. By fully understanding data analytics you can better predict a target audience. So many industries today are niche-driven and the more specialised the niche, the harder it can be to understand.

4. Forecasting

Business analytics are immensely important in forecasting. Given a set of data and tracking movement over time, it becomes much easier to forecast sales and revenue going forward. For this reason, data analytics are extremely important when setting budgets. However, it isn’t only about sales and revenue that relies so heavily on data analytics. Even forecasting the availability of parts, shippers and packaging is made possible through collecting sets of data and tracking results. This was especially significant during all the upheaval in recent years caused by a global pandemic. You may have a target audience, but you also need to analyse the availability of parts to build products, packaging, and shippers. This may also help you forecast staffing requirements which can, in turn, keep payroll manageable.  

5. Reduction in Making Repeated Mistakes

Perhaps this is one of the easiest benefits to understand. By analysing sets of data and getting a good look at results, it is easy to quantify and qualify mistakes you can avoid going forward. If you find one area of your business that is often underperforming, data analytics can help to identify the problem or break in the process so that you can avoid those mistakes in the future.

6. Increase Productivity

With all that was said above, you can see how business analytics can significantly increase productivity. You won’t be making the same mistakes over and over and so you won’t be running a full staff when only a skeleton crew is needed. You won’t be laying down good money after bad marketing campaigns and you won’t be ordering parts costing more than their worth.

Operate from a Point of Power

In the end, data tells a story in black and white, and analytics enables you to read that story. You will no longer need to imagine a happy ending because the entire process will lead you nicely to the last chapter and page of the book you are reading. In other words, business analytics all but eliminates the guessing game and that, in and of itself, can be the key to higher profits and business stability.

Bear in mind that although you may have a data analyst on staff and although you may contract a marketing firm, the final decision always rests with you as owner, director, or general manager. You’ve been given the data, the ball is now in your court, so how do you choose to play it?