Business Analytics: How to Harness Data for Business Success?

 Business Analytics: How to Harness Data for Business Success?

Business Analytics: How to Harness Data for Business Success?
Business Analytics: How to Harness Data for Business Success?

Business Analytics: How to Harness Data for Business Success?

 In 2016, the business analytics team at Microsoft predicted that collaboration among company employees could be increased by reducing the number of buildings they work in. They consolidated 1,200 employees into 4 buildings instead of 5, which resulted in a significant increase in productivity and savings of over $520,000. 

 So how can you benefit from business analytics in making wise decisions that lead to success?

Table of Contents:

  • What are business analytics?
  • Uses of business analytics
  • Importance of business analytics for your business
  • Methodologies of business analytics
  • Business Analysis Tools
  • Skills of a professional business analyst
  • How to conduct business analytics professionally?

What are business analytics?

Business analytics can be defined as the process of transforming data and numbers into insights that can be used for decision-making and business development. It relies on statistical and quantitative analysis of data, using modern technical tools and statistical software such as Excel, SAS, and Minitab.

Business analytics is used in a wide range of industries, with a common goal of obtaining insights based on numbers and facts rather than relying on random assumptions. Analysts can make wise decisions and discover growth opportunities by combining their technical and analytical expertise with business knowledge.

Uses of business analytics

The role of business analytics is not limited to a specific industry or a particular objective. It can be utilized in various fields, including:

1. Market analysis

Market analysis is essential for the success of any business activity, whether it's searching for new project ideas, expanding business operations, or addressing a decline in market demand for a product. 

For example, if you are planning to open a new branch of a pizza restaurant chain, business analytics can provide you with information about the most promising areas where your new branch is likely to succeed. This information is based on market demand, the number of existing restaurants in the area, and other relevant data.

2. Competitor Analysis

In various fields, if you want to outperform a competitor, you must study them thoroughly. This is where business analytics comes into play, enhancing the process of competitor analysis and improving its efficiency. 

For example, analyzing competitors' pricing strategies and balancing them with their sales and market share will help you build an appropriate pricing policy and predict the optimal price that will generate the highest possible profit for you.

3. Target Audience Analysis

Analyzing and understanding the target audience's characteristics is essential for tailoring marketing campaigns. This includes studying the geographic distribution of the target audience and identifying their demographic characteristics, such as age, gender, and ethnicity, as well as their interests, income, occupation, and more.

Target audience analysis can be based on data from previous customers, subscribers to your website, or followers of your social media accounts.

It is important not to confuse the terms "target audience identification" and "target audience analysis". Target audience identification precedes the launch phase, where the target audience is determined based on expectations rather than numbers. 

For example, if you want to sell men's watches, you would expect your target customers to be men between the ages of 18 and 45.

Target audience analysis, on the other hand, involves collecting customer data and accurately identifying their characteristics to customize your marketing campaigns for them. For example, you may discover that women account for 40% of the purchases of the men's watches you sell because they buy those watches as gifts for their husbands. In this case, you would reallocate your marketing campaigns accordingly based on your analysis.

4. Understanding Customer Behavior

One of the aspects where business analytics can be beneficial is understanding customer behavior and knowing their motivations and concerns during the purchasing process. 

For example, the numbers may indicate that visitors to your website abandon their shopping carts when they reach the delivery address entry page. In response, you can address the problem by replacing manual address entry with an option to add the geographic location from Google Maps.

5. Improving User Experience

User experience designers heavily rely on analytics to provide a seamless experience for users and address any issues they may encounter. 

For example, the heat map of your website may indicate multiple failed click attempts on a particular button, possibly due to its small size or unclear boundaries. In such cases, you can enlarge the button or add a clear outline around it.

6. Financial Analysis

Financial analysis is a fundamental pillar for the growth and success of companies. Without it, even the largest companies would collapse. 

Simply reviewing a company's net profits or traditional financial reports is not enough to assess its financial status. It requires a comprehensive study based on gathering and analyzing financial numbers and data to evaluate the company's recent financial condition, compare it with past financial reports, and forecast its future economic trajectory.

What is the importance of business analytics for your business?

Business analytics is a crucial necessity for the growth and continued success of your business, as it plays a role in several aspects, including:

  1. Making informed decisions based on numbers and facts, away from random expectations and predictions.
  2. Analyzing past mistakes made by the company and attempting to avoid them in the future by implementing new strategies.
  3. Understanding current market trends and identifying available growth opportunities to exploit them effectively.
  4. Increasing sales by analyzing customer behavior and creating marketing plans that align with it. For example, analyzing the products customers purchase from your website can help you showcase similar products or products they may be interested in buying.
  5. Assisting in improving employee performance and productivity through human resources analytics.
  6. Fine-tuning production processes by forecasting product demand and ensuring adequate supply without excess leading to waste or shortages resulting in loss of market share.

Methodologies of business analytics

There are common methodologies used in business analytics to organize and facilitate the process, including:

1. SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)

SWOT analysis helps evaluate the company's market position and its competitive standing by assessing its strengths that differentiate it from competitors, weaknesses that negatively impact its competitive position, opportunities that can be seized, and challenges that need to be addressed.

For example, if you have an Android app for food and beverage delivery, a SWOT analysis could be as follows:

  • Strengths: Fast delivery, excellent and quick customer service.
  • Weaknesses: Limited coverage of all areas in the city, delivery orders limited to specific restaurants and stores.
  • Opportunities: Untapped geographic area not served by any competing apps, potential for expanding the app's delivery coverage.
  • Threats: Emergence of a competing app offering similar services with high quality.

2. PESTLE Analysis (Political, Economic, Social, Technological, Legal, Environmental)

PESTLE analysis is a common technique in business analytics that focuses on analyzing six external factors that may impact a business project: political, economic, social, technological, legal, and environmental. It aims to assess the external environment rather than internal factors affecting the company.

For example, if you want to establish a supply line to a new country, a PESTLE analysis could help you predict the project's success probability by analyzing factors such as:

  • Political: Analyzing political stability and general security.
  • Economic: Examining inflation rates and citizens' purchasing power.
  • Social: Assessing the compatibility of the product with people's customs and traditions.
  • Technological: Considering digital transformations.
  • Legal: Analyzing laws and regulations impacting business operations.
  • Environmental: Including climate and general weather conditions, and their compatibility with the products intended for export.

3. MOST Analysis

Unlike PESTLE analysis, MOST analysis focuses on evaluating the internal environment of the company and developing an integrated action plan, starting from the company's larger goal to smaller objectives. 

For example, if you want to open a shawarma restaurant chain in Riyadh, a MOST analysis might look like this:

  • Company Mission: It includes the main objective of your company's existence and the services and solutions you will provide to customers. Example: "Providing the best shawarma meals in Riyadh."
  • Objectives: Company objectives are based on its main mission and SMART objectives, which are specific, measurable, achievable, realistic, and time-bound. For example: "We want to open 4 shawarma restaurants in Riyadh within the next two years."
  • Strategies: These are the approaches you will follow to achieve your objectives. For example: "Providing high-quality shawarma meals and focusing on marketing efforts."
  • Tactics: These are the specific activities and methods used to achieve the company's strategies, and they have a short time frame. Examples include "purchasing premium meat, hiring skilled chefs, and forming a specialized marketing team."

4. MoSCoW Analysis

MoSCoW analysis is one of the prominent business analysis techniques that focuses on analyzing project requirements and prioritizing them, helping to allocate resources and efforts effectively without wasting them on less important requirements at the expense of more important ones. 

For example, if you want to open a bodybuilding gym, the MoSCoW analysis would be as follows:

  • Must have: These are the essential requirements for the project that have no alternatives, such as gym equipment.
  • Should have: These are requirements for the project, but alternatives may exist. For example, air conditioning in the training area.
  • Could have: These are requirements that can be provided if the budget and circumstances allow, otherwise, they can be omitted or postponed, such as providing a sauna room or swimming pool within the gym.
  • Will not have: These are the requirements that will not be provided in your project currently, either due to budget limitations or their incompatibility with your project and its circumstances. For example, a wrestling ring.

Business Analysis Tools:

Business analysts use a variety of tools and software to help them collect, sort, and analyze data more easily. Some of the important tools include:

  • Excel: The simplest and most popular program that can be used to organize a large set of data and perform basic statistical operations.
  • SAS: A suite of advanced statistical software that allows data extraction, processing, and analysis, as well as a wide range of statistical operations, graphical visualization, and other important features.
  • QlikView: This application stands out for its ability to discover and visualize data by creating relationships between data sets, making it the most popular application in the field of visual analysis.
  • Splunk: A cloud-based tool with a simple interface used for organizing and analyzing data in real-time, but it is not suitable for handling big data.

Skills of a professional business analyst: 

Working in the field of business analysis is not easy, as it requires a combination of multiple skills, including the following:

1. Strong knowledge of statistics:

Business analysts deal with a range of numbers and large datasets, so they must have a solid background in statistics and probabilities. 

This can be acquired through academic studies or practical life experiences. It enables them to apply various statistical tests and hypotheses, such as Bayes' theorem, variance analysis, t-tests, and other statistical methods.

2. Proficiency in using technical tools:

Software and technical tools are the foundation of work in business analytics. Therefore, a professional business analyst should be able to use technical tools with a high level of proficiency. 

Important software programs in this field include Microsoft Excel, as well as advanced statistical programs like SPSS and SAS.

3. Basic knowledge of programming:

Fundamentals of programming are important in business analytics as they help analysts deal with large datasets. They can write commands and scripts to manipulate data and work with database management systems. 

Business analysts don't necessarily need to be programming experts, but it is sufficient to have a basic understanding of programming languages, particularly SQL and Python.

4. Multifaceted personal skills:

In addition to specialized skills, a professional business analyst should possess several essential personal skills to succeed in their profession, including:

  • Analytical thinking: The ability to draw conclusions based on a set of information and data is a crucial skill for any business analyst.
  • Communication skills: The nature of the business analyst's profession requires collaboration with teams, managers, and sometimes clients to achieve results and make decisions. Therefore, business analysts need diverse communication skills.
  • Decision-making: Business analysts are not limited to reaching analysis results but are also expected to participate in the decision-making process based on their analyses.
  • Organization: Business analysts and chaos do not go hand in hand. They should be exemplary in organization and orderliness since they deal with a large amount of data that cannot be understood without organization.

How to conduct business analytics professionally?

To fully benefit from business analysis, it is important to conduct it professionally and properly. Here are five steps to help you analyze business data professionally:

  1. Define the problem or objective: Identify the problem or objective you want to address through the analysis.
  2. Collect relevant data: Gather the necessary data that will help you analyze the problem or achieve the objective.
  3. Analyze the data: Use statistical techniques, visualization tools, and other analytical methods to examine the data and extract valuable insights.
  4. Interpret the results: Analyze the findings and interpret them in the context of the problem or objective.
  5. Communicate the insights: Present your analysis results clearly and concisely to stakeholders, ensuring they understand the implications and can make informed decisions based on the insights provided.

Define Your Objectives for Business Analysis

There is no specific reason for conducting business analysis; the objectives are broad and varied, depending on the industry, company size, and desired outcomes. Therefore, it is important to know exactly what you want to achieve from the business analysis you will conduct. 

Defining the objective will help you choose data sources and analysis methodologies, as well as guide your steps throughout the process. 

Examples of objectives include:

  • Developing a marketing campaign to promote a company's product based on analysis of the target audience and customer behavior.
  • Analyzing the company's performance in the past year.
  • Predicting the company's market share in the target market three years from now.
  • Evaluating the performance of human resources every month.

Identify Data Sources and Start Collecting Data

To successfully conduct business analysis, you will need a database to base your work on. Therefore, you should consider the data sources you want to rely on. These may include customer data collected from your website, data acquired from social media platforms, as well as internal enterprise data such as sales volume, profits, or human resources reports, among many other data sources that depend on your objectives.

Arrange and Organize the Data:

After identifying and collecting the data, you will be faced with a large amount of information, some of which is relevant to your objectives and some that is not. Start by filtering the data and selecting what is relevant, excluding any outliers. Then organize the relevant data into tables and charts using programs such as Excel, ClickView, or others.

Conduct the Analysis and Reach Conclusions:

At this stage, after data collection and organization, you are now ready to conduct the analysis. You can rely on software and technical tools, and use equations and statistical tests such as hypothesis testing and correlation equations, among others.

Conducting business analysis requires extensive expertise, both in terms of scientific knowledge and practical experience using software. If you lack these skills, conducting business analysis professionally can be challenging.

Make Your Decisions

All the numbers and analysis results will be useless if you do not use them in the decision-making process and develop a solid action plan. After obtaining the analysis results, compare them with previous analysis results. Then, create a list of ideas and conclusions based on your interpretation of the analysis results. Finally, make appropriate decisions that help improve performance and develop your business.

The secret to the success of business analysis lies in continuity. Therefore, strive to conduct business analysis continuously, comparing current results with previous ones, evaluating the decisions you have made, and attempting to update and modify them. Lastly, make sure there is no specific limit at which you stop the development process.


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