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What Is Business Analytics?
Business analytics is the process of analyzing data using statistical and quantitative methods to make decisions that drive better business outcomes.
The primary quantitative methods employed to solve a business problem are:
Why Is Business Analytics Important?
Business analytics equips organizations with the information they need to improve processes and make positive changes. Businesses that aren’t utilizing business analytics risk becoming ineffective, obsolete, and falling behind competitors who use business analytics to their advantage.
Business analytics offers:
- More visibility into business performance
- The ability to identify trends and predict outcomes
- The ability to make faster and more accurate decisions
- Ways to anticipate and respond to the unexpected
- Insights that foster positive change and innovation
Luckily, businesses today can implement technology that makes the end-to-end business analytics process efficient and easy, no matter what an employee’s comfort level with data analysis might be.
The Essentials of Business Analytics
The goal of business analytics is to understand what’s working, what isn’t working, and why, and then use that information to shape business strategy and change behavior to produce more favorable outcomes.
Business analytics requires:
- Understanding the business problem that needs solving
- Knowing where the data sits and gaining access to it
- Preparing and exploring the data
- Analyzing the data using the appropriate quantitative method
- Coming to a conclusion about how to solve the problem that leads to favorable business outcomes
What Sets Business Analytics Apart From Data Analytics, BI, and Data Science?
The process for data analytics and business analytics is virtually the same, as both make use of statistical and quantitative methods to draw conclusions. But while data analytics can be employed in a broad range of scenarios, business analytics is solely concerned with improving business processes and outcomes.
Business intelligence is more about the delivery of the conclusions, post-analysis, to decision makers. It’s a subset of business analytics that focuses on creating reports, visualizations, and dashboards that help business leaders easily consume the data and insights.
Data science, like business analytics, involves gathering data, modeling, and deriving meaningful insights from data, but it typically involves asking more broad and general questions that aren’t specifically business-related.
For example, if a person opens a coffee shop, data science can help them answer questions like “What is the typical demographic of the average coffee drinker?” and “What month of the year do I sell the most coffee?”
Business analytics would answer questions like “Am I making a profit?” and “What menu item isn’t selling and should be removed to save money?”
What Are Examples of Business Analytics?
A wide range of industries can benefit from business analytics. With so much data out there, it would be a miss for an organization to not use it to solve business problems and maximize profits.
For example, Southwest Airlines used business analytics to help manage crew costs — a real challenge for any airline. Using Alteryx, the team was able to provide crew reserve forecasts alongside open flight forecasts to the scheduling team. That enabled the schedulers of flight attendants and pilots to anticipate the reserve vs. open flight balance before making assignment decisions for the next day.
Using business analytics to forecast demand revolutionized the way Southwest Airlines managed crew costs. Learn more about this specific use case in this informative webinar.
Other examples of business analytics in action include:
- Big Lots optimizing parcel routes to drive cost and time-savings
- SEGA Games Co., Ltd. creating personalized marketing promotions based on play habits and sales history
- The University of Dayton leveraging data to better understand student behavior and develop programs that address retention and student success
- Signet Jewelers recently created a re-opening strategy after closing due to the COVID-19 pandemic — and after reopening, saw 15% growth in Q3 of 2020
Challenges of Business Analytics
Getting organizational leadership on board with a business analytics strategy might be a challenge, which is why it’s important to communicate and present business analytics as a necessary accompaniment to other strategies already in place.
The IT department might need some convincing as well if they aren’t thrilled about changing the current technology infrastructure and moving away from existing tools.
There also needs to be buy-in from end users and a commitment to spending the necessary time to develop and refine analytic models, which will result in better outcomes.
What Skills Are Required to Succeed as a Business Analyst?
Business analysts should be curious, detail-oriented individuals who want to help businesses make smarter decisions with data. They should enjoy thinking critically about business problems and how to solve them.
A good analyst should also be an adept communicator with the ability to properly articulate ideas and findings to decision makers and business leaders.
How Far Has Business Analytics Come?
In the past, conducting meaningful, deep business analysis required computer science and programming skills.
Now, thanks to accessible, self-service analytics platforms, employees of different skill sets can perform business analysis. Many tools make it easy enough for workers with no technical experience to analyze data, discover trends, and help inform business decisions.
How to Get Started with Business Analytics
The Alteryx Analytics Automation Platform removes the barriers to business analysis by converging the capabilities of multiple tools into one code-free, code-friendly platform. It’s a true end-to-end, self-service solution for business analytics and will get you from data to discovery to decision in minutes.
Our simple, powerful analytics platform has helped accelerate decision-making and drive transformative business outcomes for thousands of companies globally. See what your business can achieve with Alteryx and start a free trial today.