Business analytics is fast becoming a competitive edge addition for organizations in this competitive world to make decisions. From being a nice-to have aspect to apply in the business it has now become a must-have critical component. The usage of business analytics as a skill has now become an important part in better taking decisions with a lesser margin of error. This is because business analytics serves to get better insights, inferences from the data available (both internal and external) those organisations have it stored in various digital formats.
Business intelligence (BI) VS business analytics and decisions
Having understood what business analytics is all about lets see how best we could look into differentiating business intelligence (BI) from business analytics and decisions. Business Analytics simplifies data to boost its value. The power that analytics has is to turn huge volumes of data into a much smaller amount of information and provide us with better insight to facilitate better decision making. BI mainly condenses historical data typically in table forms or reports and graphs as a means for queries and drill downs. As a result of this exercise what reports do is not simplify data nor amplify its value. They simply package up the data so it can be consumed. It’s simple to say that it crushes a fruit into a pulpy state and packages into a pack for consumption in the desired quantity as and when required!
In stark contrast to BI, decisions provide context for what to analyse upon. This way one could work backwards with the end decision in mind and with more pictures to visualise and interpret on. In this case it is important to understand as to what is important as matter to your organisation and then model what leads to making those decisions more effectively.
So through the understanding of the decision type needed then the relevant type of analysis and methodology in addition to the required source date can be defined.
To put things in a better perspective, BI consumes stored information the same way as an engine consumes petrol for its requirements based on the actual prevailing conditions. Business Analytics produces new information that is to say with the yarn available as existing data newer fabrics could be created. Under business analytics there is a separate branch by the name predictive business analytics that leverages data within an organizational function focused on analytics and aids in possessing the mandatory skills and core competencies to drive more efficiently, take faster decisions and achieve targeted performance within the organisation.
Through the usage of the queries using BI tools one gets simple answers for the basic questions posed. Business analytics will create that environment to pose questions. In fact with this as a base, business analytics then aids to stimulate more and more interesting and intriguing questions for which answers could be searched for. What is most important to be seen here is that, business analytics also has the power to answer the questions with aplomb. Through its ultimate course predictive business analytics can better display the probability of outcomes based on the variable assumed.
The application of business analytics that was once considered the domain of the mathematicians and statisticians is no longer so these days. In fact today it is being widely adopted by organizations with the conviction that senior executives will realize, utilize and act by the potential value delivered by business analytics.
Business Analytics as an imperative and indispensable tool to business needs
Today many of those involved in businesses do not really have know-how of what predictive modelling or forecasting, design of experiments or mathematical optimization mean to their business or how to decide with insights available to them in front of them before going any further. Hence it becomes imperative that over the next ten years with the use of these powerful techniques businesses are better equipped to handle situations much better than what it is today. This is almost similar to applying financial analysis and technology for businesses that want to thrive, flourish and survive in a highly competitive and regulated market scenario.
The top management constituting of the executives, senior managers and the other employee teams who do not comprehend, interpret and leverage these assets will find it more hard and challenged to enhance their career growth.
Companies that are able to better apply predictive business analytics effectively tend to better achieve a more meaningful result with such rigorous processes in place with the system. That very much includes the ability to create a team of individuals with good business surviving skills and competencies, a set of proven best practices, an exposure to have handled functional level data & tools; and training on the management processes to monitor and review the results and to forge its decision making by leveraging these results and insights. In all, business analytics is used to continuously analyze the right drivers of business and cost and those measures that have strong cause-and-effect relationships to gain better insights to better and effectively manage the businesses and to improve the overall decision making within the organisation.
One can make the business case to the management heads and the other key decision makers without a doubt that for the organisation to be primarily more potent, successful and to sustain more effectively the exposure to the various flavours of business analytics shall be imperative without which the business shall stare at failure through impaired decision making. This way the point of data driven decision making shall ultimately prevail over emotional decision making. If this trend of emotional decision making continues it might ultimately pose the existence of the organisation itself at risk. Predictive business analytics is arguably without doubt the next in thing for organizations to successfully grow, compete and excel. As a result just from predicting outcomes for oneself the other touch points like resources of the organisations, the assets and the other partners connected with it shall also benefit from better decision making.