In today’s world of commerce, data and business go hand in hand. A business or organisation will not function and do what it intends to do without data and information. The times have changed and at the center of it all is data and information and how they are used to achieve business goals. Data is what’s keeping the pace of many industry leaders and top-tier companies around the world. Many business and IT experts and have recommended that business organisations invest in data gathering and data analysis tools if they want to keep up with their competition.
What Is Data And Why It Is Important?
Data is simply collected facts and statistics of business operations. Data can be used to measure and record a wide range of external and internal business activities. Although some of the data collected may not be informative, it is used as the basis for all reporting, planning, strategising and crucial business decision making at all business levels. Its importance cannot be understated as it provides the basis for daily business operations.
The Difference Between Data And Information
Here’s one definition. Data is the raw facts and statistics gathered during a certain process (like bounce rates recorded across site pages), while information is timely and accurate data (like what time a new lead entered their information into a form and submitted). These examples are very specific though, there are a huge amount of cases where data and information are created or stored.
Information uses data to be specific and organised for some particular purpose or business goal; it can also be presented within a context that gives meaning and relevance and can lead to an increase in understanding and decrease uncertainties in business operations.
Information can also be interpreted as data that has been interpreted and then presented in a more meaningful context that allows a business to make informed decisions.
Now, what will your business do with the ever-growing volume of data and how can you take advantage of it to gain more insight into customer behaviour patterns or the efficiency (or inefficiency) of internal processes to make your business a success?
A lot of terms come to mind when talking about data analytics: business intelligence, predictive analytics, big data and data science. Most of these practices can be utilised to solve similar business issues and challenges.
To some people, data analytics is a new term, but it has been around for a while now. Data analytics can be described as the “qualitative and quantitative techniques and processes used to improve productivity and business gain”.
How Does Data Analytics Work?
Let’s dig in some more and understand the concepts of data analytics and why it is important from a business perspective. Data analytics are helpful in Business to Consumer (B2C) applications. Companies collect data that they have gathered from their customers, other businesses, the economy and other sources that affect them. The collected data is then processed and categorised depending on what the organisation needs the data for. Are they going to use the data to achieve some goal? Or is it general data that they want to build a historical record of to look at annually. In B2C, analysis is done to study purchase patterns and other customer behaviors, like what timezone they are in, when is the best time to send them emails so that they will open them, etc. The point is, there are so many applications for data analytics.
Data analytics also involves the practice of figuring out how an organisation will implement strategies to achieve goals. Data analytics can also help enhance managerial processes and push organisations to the next level.
Data that is not analysed is a wasted opportunity. If studied and analysed properly, data can help any business organisation find information that can bring a big change in the patterns of how they are already going. A business can have a competitive edge and do wonders with data analytics in a competitive economy.
Managers and Data Analytics
Data analytics can help produce useful reports for managers in order to make well-informed business decisions, instead of just guessing what the next step is. Two popular methods of data analytics are descriptive and predictive analytics.
The two methods can explain the relationship between factors and outcomes in a business decision that need to be made.
Predictive analytics utilises statistical techniques like data mining, modeling, and machine learning to analyse present and historical data to make predictions. Data modeling captures relationships among factors, allowing an assessment of the possible risks involved in a specific case. These help managers in making decisions for any possible business deal or strategy change.
Descriptive analytics is used to understand past performance by looking at historical data and analysing the reasons for past failures or successes. Understanding the cause and effect can help CEOs and managers refine or change business and operational strategies. Management reporting like sales, operations, marketing and finance take advantage of this method.
Just a few of the advantages of data analytics include:
- Industry knowledge is one thing that an organisation will be able to conceive once you take advantage of data analytics. It will show how you can go about your business in the future and what it is that the economy already has its hands on.
- Business value chain analysis will show how existing information is going to help the business find the path to becoming a successful company.
- Taking opportunities is another data analytics advantage. It gives the company analysed data that helps in taking advantage of opportunities that would be otherwise unseen and unlocking more options for the organisation in an economy that keeps on changing.
Data analytics can help improve decision-making, lower the possible risks every business has to face and reveal hidden insights that can be used to create opportunities and advantages over the competition.