A simple answer to the question in the title is "Business analytics is a buzzword". So much so that, many find it fashionable to use it as per their convinience. After all, every one has some opinion about the meaning of a buzzword. But for all the techies, let us explore the meaning of business analytic in a true sense.
Business analytics solutions typically use use data, statistical and quantitative analysis and fact-based data to measure past performance to guide an organization's business planning.
Definition of business analytics
Business analytic is defined as a practice of iterative, methodical exploration of an organization’s data with emphasis on statistical analysis.
Busines analytic explores to all the methods and techniques that are used by an organization to measure performance. It is defined as a practice of iterative, methodical exploration of an organization’s data with emphasis on statistical analysis. It makes use of skills, technologies, methods and practices for iterative exploration and investigation of past business performance to gain insight and drive business planning. It focuses on developing new insights and understanding of business performance based on data and statistical methods.
Business analytic answers some critical business questions such as:
- Why did it happen?
- Will it happen again?
- What will happen if we change x?
- What else does the data tell us that never thought to ask?
For what does business analytics are used?
First we decide the purpose of business analysis and then an analysis methodology is selected and data is acquired to support the analysis. Data acquisition often involves extraction from one or more business systems, cleansing, and integration into a single repository such as a data warehouse or data mart. The analysis is typically performed against a smaller sample set of data. As patterns and relationships in the data are uncovered, new questions are asked and the analytic process iterates until the business goal is met. Following are some typical uses of business analytics
- Exploring data to find new patterns and relationships
- Explaining why a certain result occurred
- Experimenting to test previous decisions
- Forecasting future results
Benefits of business analytics
Business analytics bring multiple advantages to succeed in any business domain. A well planned analytic is an asset to any organization and is critical to have a competitive edge. Some of the typical benefit from haveing business analytics are listed below.
- Improving the decision making process
- Speeding up of decision making process
- Better alignment with strategy
- Realising cost efficiency
- Responding to user needs for availability of data on timely basis
- Improving competitiveness
- Producing a single , unified view of enterprise information
- Synchronising financial and operational strategy
- Increase revenues
- Sharing information with a wider audience
Challenges and future of business analytics
Major bottleneck for business analytic is obtaining high quality data. The difficulty is in ensuring integrated enterprise data and making only specific subset of it available when needed. Generally, most of the organizatoins face one or all of the below challenges while achieving business analytic capabilities.
- Cost - This is perhaps the biggest concern for adopting business analytics. Initial investment is huge and there also need of money to maintain. With economic crisis, companies are hesitating to make huge investments on their IT infrastructure.
- Staffing - Business analytic skills are difficult to learn and therefore it is difficult to get such resources in the market.
- Complexity - Business analyics are not simple things. This is a complex solution requiring time and money to implement. Once implemented there is a need to maintain it to get full benefits.
- Duration - Time required to implement the business analytic is often an issue. Many companies therefore practice agile methodologies to bring some part of the analytic to the use of management while rest of the implementation is still in progress.
With the progress we are making in the technology space, above challenges are certainly being addressed to some extent but there is a long way to go. The advantages that business analytic bring to any organization will definitely make them one of the important technologial area to focus and invest in the future.