The rich variety of data that businesses generate contains valuable insights, and data analytics is the key to unlocking this. Data analytics can help an organisation with everything from analysing and refining their marketing and promotional strategy, to improving their financial position and mitigating business risks. This is evident in a recent survey by TechRepublic which demonstrated that businesses use analytics across nearly every department, with 68% using analytics in operations, 56% in finance, 50% in sales, and 45% in product.
However, guaranteeing your business has the right processes in place to get the best out of your data analytics takes considerable time and planning.
In this article, RGS IT will explain how businesses can use data analytics to shape and create well-informed business decisions.
What are business data analytics?
Business data analytics is a formal practice, where a specific set of techniques using data analysis, statistical models and other procedures can be applied to help a business perform the continuous exploration, refining and investigation of past and current business data to improve its decision-making process.
Successful business analytics rely on several key factors, including:
- The quality of data
- The quantity of data
- The quality of the analytical software platforms your business uses, and the skill set of the employees/suppliers you employ to manage these systems
- A company-wide culture that embraces data-driven processes.
How businesses can use data analytics to improve their processes
Data analytics are used by companies in a variety of different ways to help improve performance across a number of areas. This could include improving security, how to market your services and products, creating customer profiles or developing your HR function.
RGS IT have outlined the five main reasons why your business should start implementing data analytic practices.
- Personalise the customer experience
Businesses have a wealth of customer data at their fingertips from a range of different channels including e-commerce platforms, websites, social media, and physical premises. By using data analytics to create comprehensive customer profiles from this data, businesses can gain insights into customer behaviours, and thus provide improved and personalised experiences with their products and services.
Organisations can take this one step further and perform behavioural analytics models on customer data to optimise the customer experience.
2. Better decision making
Businesses can use data analytics to minimise financial risks, and ultimately financial losses. Predictive analytics can suggest what could happen in response to changes in the business in the future. Prescriptive analytics then indicate how the business could respond to these changes.
For instance, a business could use predictive analytics to see what impact a change in pricing could have on customer demand and its overall financial position. Changes to pricing across a product or service range could then be A/B tested to validate the hypotheses produced by such models. After collecting the sales data, the business could use these insights to make informed decisions when changing pricing moving forwards.
3. Streamline operations
Organisations can improve their operational efficiency using data analytics. Gathering and analysing data about the supply chain can show where production delays originate and help predict where future problems may arise and how a business can prevent these from happening again.
Data analytics in this instance are particularly valuable for the retail sector, where they can struggle to monitor inventory levels. Analytics software can be used to determine optimal supply across multiple premises based on a number of varying factors including seasonality, holidays and other trends.
4. Mitigating Risk
Risks are around every corner in a business and analytics can be used to help an organisation understand potential risks and how to take preventative measures. Risks including theft, receivables delays and legal liability could all be mitigated using data analytics technology. A great example of this is a retail group and using data analytics to determine which of its premises are at highest risk of customer and employee theft. The results of the analytics could then be used to inform the business which of its stores need increased security.
Businesses can also use data analytics to limit its losses. For example, if a business overestimates demand for a product, it can use data analytics to determine the optimal price for a sale to reduce its unwanted stock.
5. Tighter Security
All organisations will face a security threat at some point, and they can use data analytics to review and diagnose past security breaches. For example, a business’ IT department can use analytics software to parse, process and visualise data to determine the cause and potential origin of a security attack, allowing them to improve on any vulnerabilities for the future. This can go a long way to improving both a company’s financial position and also brand reputation.
Start seeing the benefits of data analytics
Data is only meaningful if you act upon it. To obtain the best results from data analytics, an organisation needs to centralise its data, and turn it into meaningful, actionable insight which can be used to work smarter. RGS IT’s Business Intelligence services can provide your organisation with improved business data analytics and help you make more informed business decisions in the process. Contact us on 0845 855 0550 to find out more.