The basics of business analytics
Which companies need business analytics and why? What problems does it solve? How does it differ from business analysis?
Business analytics is primarily about working with data and studying a company's performance indicators.
It is carried out by specially trained specialists called business analysts.
Using data analysis, they help managers identify business problems and find opportunities for sustainable development.
How business analytics differs from business analysis
Experts still argue about what business analytics is: whether it is identical to business analysis or represents a separate field of knowledge. To figure this out, let's look at the main goals of business analysis and business analytics.
Business analysis is studying a company's activities in a broad sense: analyzing its development strategy, business processes, organizational structure, and information systems, and designing and setting up how all of this interacts with the business environment and the outside world.
The main goal of business analysis is to think through and implement organizational changes that would allow the company to achieve its main goals in the best possible way.
The main goal of business analytics is to support management decisions and organizational changes with high-quality, relevant, and objective data.
Here are the three main tasks of business analytics:
- obtain data on the company's performance in the form of figures;
- process and structure this data — make it suitable for further analysis;
- analyze the data — find patterns in the company's activities and model forecasts for its development under certain conditions.
Thus, business analytics is part of business analysis, which involves the collection, processing, and analysis of data. It is the first and necessary step in the effective management of organizational change.
Which companies need business analytics and why
Business analytics is necessary for all companies that want to make high-quality management decisions. Only decisions based on facts can be high-quality. Business analysts are responsible for collecting and processing these facts.
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It is important not only to collect data on the company's activities, but also to prepare it for managers:
- structure it;
- analyze it — identify trends and tendencies that influence factors;
- present the results of the analysis in a clear form;
- prepare recommendations on how to use this data to improve the company's activities.
The recommendations of business analysts provide company management with up-to-date and reliable information about what is happening within the company and beyond. This approach helps to make informed business decisions.
A simple example: a company sells seasonal goods — bicycles or skis. Business analysts will accurately determine the product demand curve, taking into account seasonal factors, present it to managers in an understandable way, and provide detailed recommendations on what needs to be done to maximize sales revenue.
Without business analytics, such decisions are made blindly, which leads to the company missing out on profits.
