Businesses have to deal with data from different sources such as the accounting department, marketing department, sales department and more. Gathering all this data and combining it manually can be tedious. Furthermore, finding valuable insights within this large data set can only be possible with the right tools.
Fortunately, business analytics can help put chaotic figures in order and transform them into valuable insights. Companies can leverage business analytics to make sense of unstructured data and identify emerging market trends and opportunities.
Our detailed guide explores in detail what business analytics is and discusses its role in helping businesses identify market opportunities.
What is business analytics?
Business analytics is a set of technologies and tools to process raw data into helpful insights to improve business decisions. Data mining, data visualization, data management, forecasting simulation and predictive modeling are a few tools that business analysts use to gather insights from the data.
Anyone looking for practical analytical skills to convert big data into helpful insights should consider pursuing an online master’s in business analytics, such as the course offered by reputable institution St Bonaventure University. Along with data mining with machine learning, data management and data analysis preparation, this course equips you with computational data analysis methods and helps you understand industry insights. You learn to utilize decision trees, manage a database, use R programming to translate data, and create predictive models to make sound business decisions.
Components of business analytics
Business analytics has different components:
- Data aggregation – After collecting data, it must be accumulated, streamlined and cleaned so that it is complete and accurate. Companies can use volunteer data and transactional data for aggregation.
- Data mining – Data mining involves using different statistical techniques to get interpretations. Clustering, regression and classification can help identify previous data trends and patterns.
- Text mining – Text mining analyzes extensive unstructured text data through software to identify patterns and concepts in the data. The data is textual information assembled from call center scripts, websites, comments and more.
- Forecasting – Forecasting involves predicting future trends based on previous data. This can include analyzing processes that happen during a specific season.
- Optimization – Optimization involves using sophisticated data tools to clean, access and organize data.
- Data visualization – Visualization is how data is represented. This can be through the use of infographics, charts or plots. These graphics depict complex data relationships and help deliver data-driven insights.
Understanding the role of business analytics in identifying market trends
Now more than ever, accurate data is essential in the business landscape. Customers are becoming aware of their buying decisions, and companies must find ways to get their ideal buyer’s attention. Furthermore, companies must make accurate decisions based on past performance and facts. Gone are the days when a business relied on instinct, which only led to costly investments.
Companies are realizing the need to invest in business analytics to identify potential market opportunities and eliminate any guesswork.
The big data market is predicted to grow to $103bn by 2027. Companies need to factor in analytics in their decision-making process to gather unique insights about their business.
Below, we discuss how business analytics can help you identify market opportunities and trends.
Identify customer segments
As a business, understanding your customer’s persona, buying behavior and preferences is essential to your growth.
Businesses often use interviews, surveys and other methods to collect data. Once this data is collected, it needs to be organized and analyzed. With business analysis, a company can transform raw data into usable information.
A business analyst will group this data into categories such as customer segments or customer classification. After organizing this data, businesses can analyze it to understand their customer behavior. The information will help you identify growth opportunities.
Business analytics can also help companies understand a customer’s buying patterns. The process involves collecting data from email correspondence, social media posts, customer surveys and purchase order records. Once this data is analyzed, a business can understand how frequently buyers purchase the product, their preferences, and where they prefer to shop. This information can help companies identify growth opportunities, including changing their marketing strategy, introducing new products, etc.
For example, suppose a business identifies that most customers prefer shopping via its website to a physical location. In that case, the business can make online shopping more seamless or offer discounts for repeat customers.
Identify areas of improvement
Businesses looking to grow and increase their revenue need to understand areas that they may need to improve. You can gather insights into the most popular products by analyzing customer reviews, feedback and ratings. A business can also identify market trends through this data and create innovative products to get the stagnant market going or invest in new products to compete in the trending market.
Additionally, companies can incorporate business analytics to measure the effectiveness of their marketing campaigns. These insights give businesses a clear view of areas that need improvement and allow them to improve their operations through a more personalized and targeted approach.
Prediction and forecasting
Predictive analytics is a subset of business analytics. It uses statistics, data models and machine learning to forecast future events.
Businesses that desire to stay ahead of the competition and improve their decision-making process can benefit from gathering insights using predictive analytics. Companies can analyze website visits, purchase history and more data to get insights into customer purchasing habits, interests and preferences.
Business owners can use predictive analytics to anticipate future customer needs. This entails identifying patterns in the data that could be possible market opportunities. It helps businesses customize their products or services to meet the consumer’s needs. Furthermore, it gives room for the creation of personalized experiences, something that would be difficult to create with unstructured data.
The result is a satisfied customer and improved business profitability and growth.
Examine operational data
Companies can utilize business analytics to examine operational data. They can identify areas where efficiency and process optimization may be lacking and use this information to improve. This helps the business enhance quality, cut costs and increase output.
Industries that can benefit from business analytics
Most industries are in a competitive landscape. They all have unique needs and challenges that can be resolved through business analytics integration in their processes.
Some of the industries that benefit the most include the following.
Banking and finance
Financial institutions deal with a lot of data on customers and often use business analytics to optimize risk management, determine a customer’s credit card spending, and find market opportunities to maximize customer retention.
The banking industry also depends on business analytics to find market gaps and enhance customer service.
The retail industry uses business analytics to re-evaluate the set strategies for inventory management. This allows managers and other stakeholders to make informed and timely decisions. Retail companies can use the insights gained to supply customers with the products they need the most.
Business analytics plays an essential role in manufacturing as it identifies areas where the companies may fall short regarding quality and supply/demand. Decision makers can quickly take action based on the insights to minimize costs.
Sourcing of materials can also benefit from analytics as the manufacturers can anticipate and prepare for issues that may arise within the supply chain.
Data management is crucial in the telecommunications industry. Companies in this sector use business analytics to process and retrieve data that can be used to assess customer behavior and help with creating strategies to ensure customer retention.
Business analytics also helps the telecommunications industry to improve dynamic pricing, fraud reduction and network management.
Business analytics has pattern-finding capabilities that are useful in the healthcare industry. The sector can use these insights to improve the patient experience. Stakeholders can also leverage business analytics to develop better electronic patient records and use the insights to guide staffing decisions.
With technology introducing devices such as fitness wearables that can detect your blood pressure and smartphones that can count your steps, data collection through these devices will allow doctors to understand their patients and provide better care.
Real estate and property management
Real estate companies are utilizing business analytics for better trends and property analysis. Firms can also understand their market and customers by incorporating business analytics.
Individuals in the property management space can gather valuable insights from business analytics. This makes it easier to streamline the maintenance process, identify areas of concern, and ensure effective performance.
What are the challenges of business analytics in identifying market opportunities?
Bad data quality
Bad data quality often occurs due to manual errors made while entering data. The presence of asymmetrical data, where information in one system doesn’t reflect the changes made in the other system, can also contribute to poor-quality data. Unfortunately, this can lead to inaccurate forecasts and results.
Companies can fix data quality issues by getting accurate information from the original database. Any data inaccuracies need to be repaired in the original data source to avoid problems in the future.
Identifying quality business analytics tools
Given the several options available, it’s challenging to decide on the best analytics tools to use. Each tool has unique features to solve individual business needs.
A thorough understanding of business analytics and tools to use in the business context can help resolve this issue. Researching the tools to use saves time and reduces extra costs.
Data privacy and security are potential risks that come with big data. There’s the danger of data misuse and data breaches that can be costly for any company, especially if you are dealing with sensitive information such as customer information or credit card numbers.
Proper user access control, utilizing encryption tools, and centralized key management can help overcome this challenge.
Too many data sources
Working with multiple data sources can make incorporating them into an analytical framework challenging. Ignoring this only creates a gap that could lead to inaccurate or incomplete insights. Furthermore, combining data manually takes time and makes gathering valuable insights tedious.
Businesses can solve this problem by creating a centralized data system where all the information can be accessed. This saves time and allows cross-comparisons, leading to more accurate and complete data.
Data storage limitations
The amount of collected data grows daily, and storing it can be challenging, especially for small businesses. Firms that have problems with storing and retrieving data make it difficult for decision makers to access it and gather insights.
Businesses can utilize data storage options such as data warehouses to store structured and unstructured data.
Lack of skilled business analysts
An acute shortage of professionals who understand business analysis is a big challenge. Companies need help finding experienced analysts who can handle the massive amount of data in production.
A lack of talent may leave organizations struggling to gain valuable insights into market trends and opportunities. Hiring competent analysts and a simple system can help mitigate this challenge. Combining the right skills and a system that simplifies the process will make it easier for companies to gather data and derive valuable insights.
Business analytics plays a crucial role in identifying market trends and opportunities. Companies can gain insights into their customers, operations and business landscape by using business analytics models and tools. This makes it easier for them to find new market opportunities and allows them to make informed, data-driven decisions that can drive growth.
Pursuing a career in business analytics is both rewarding and challenging. With a positive job outlook, you can explore a career as a business analyst, management analyst, big data analytics specialist, or pricing and revenue optimization analyst. Moreover, you get to work on projects that will provide you with expertise and experiences to apply to future projects.