I need business analytics…do I?

Analytics….a thrilling new domain, continuously explored by statisticians and data lovers.

But raw data is like an uncut diamond which will become more precious the more it will be burnished. Data analytics is the art of gaining an in-depth view of the company with a view to guiding it in its future course based on information stored within the organization.

A proper assimilation, dissection and analysis of data can help figure out the most obvious challenges or questions within an organization.  It can help to determine what went wrong (or right), and correct course, understand the performance of the organization better, and therefore plan better.  Data analysis is best used in making strategic decisions and business planning for future.

There are a number of research reports which are pointing towards the growing importance of business analytics – business analytics and optimization is a $105 billion market that includes hardware, software and services, featuring a growth rate of 8%

Top Business Analytics uses

 

 Business intelligence in data analysis is very important as it operates all the raw data dealing to each and every aspect of the organization, then to organize those data with the available tools. Data analysis helps to organize large chunks of data into fields and columns which can be conclusive for the need of company and the data analyst.

Data analysis can help in fighting downturn as it helps to analyze the trough well in advance. It helps in studying the market conditions supporting or not supporting the business.

A last word to all companies who are still nagging to be analytics driven:

“83% of Chief Information Officers (CIOs) of companies identified business intelligence and analytics as their top priority for enhanced competitiveness.”

Who needs Analytics?

The push for greater use of analytics is unfortunately more from the analytics and BI service and solution providers rather than from the end user.  This lop-sided advocacy results in a severe mismatch between the actual need for, and the felt or expressed desire for analytics in the day-to-day management of business.

There continue to remain  a number of skeptics within the industry who do not make use of analytics.  Some typical reasons that are quoted are:

“I believe in myself and have full confidence in my ability to view my business. I have full control over my company’s operations. I do not need anyone else to tell me what is right!”

“I have done it in the past, and it worked.  I know that if I do the same things again, it will work again.”

“Numbers are used by people who want to hide the truth. If you want to see reality, you must roll up your sleeves and be in the centre of action; not behind some computer, remote from the ground.”

“An external advisor will never know as much about my business as I do.  What new perspectives can I expect to gain from him?”

“Data is confusing. Give it to me straight – can you tell me what to do, or can’t you?”

And then there is always the lurking fear in the senior manager that he or she will appear to be less knowledgeable.  What then will be the security of his position within the company? Will others see him as being less competent?

In the context of the increasing requirement of depending on multiple intelligence sources to be able to make correct business decisions, this is a breed which is quickly moving towards fossilization

Most CXOs speaks the same language:  when the business is running well, they do not see the need to invest in analytics, and when the business does not do well, they do not have the back-up to be able to make the difference.

Now here comes the need of analytics oriented approach – although companies panic to appoint analytics teams and to bear the incremental cost incurred on their facilitation, the benefit of having it in place, especially in times of need, far exceeds these costs.  In the face of growing manpower and IT costs,  companies tend to internally analyze and identify their needs and try to solve their issues based on past experience and future anticipation. Under such circumstances, they see analytics as an unwanted load which can be dispensed by short term measures. Such stop-gap measures will often result in failure and the inability to make more out of the information at hand.

But is it possible for any company to transfer the data from the memory chip of one set of people to another? In order to accumulate the memory of all the memory chips one needs to create a system and an approach to work with information (that is analytics!).

Why do these businesses fail in the long run?

It is their overconfidence or the lack of ability to anticipate the needs in a rapidly changing world that mainly leads to failures.  Some of the reasons for not being able to manage businesses are:

ü  Loss of data in absence of appropriate data capturing method

ü  Lack of clearly identified goals

ü  Poor integration of data from multiple sources

ü  A betting decision maker (“I will wager that this is the right answer!”)

ü  Lack of in house analytical skills demands for proper analyses

ü  Lack of clear performance measures across organization

Let us face it, the world today requires many more business leaders than the rate at which they are being produced.  Naturally, the quality or the ability of leadership suffers.  But this need not result into the business suffering, so long as these leaders realize that there are tools and methods available to enable decision making.

BI use drivers

The imperatives to use data for business are many, and some of the larger companies have started to make use of them.  These companies are driven by the fact that their margins are being squeezed, their ability to generate incremental revenues is being limited, and their overall performance has reached levels where they cannot expect to continue to grow unless they improve their performance.  Some of the reasons why these companies have chosen to go for business analytics are:

For smaller companies, managing their data environment is much simpler..but if they do not start this early in the life of their companies, they are likely to hit a ceiling when they are looking to accelerate.

This blog is also posted on: http://mydatawise.com/i-need-business-analytics………………do-i