Monday, November 19, 2012

Understanding Business Analytics

The following was originally published on IBM's "Midsize Insider" blog
by Sharon Hurley Hall on November 19th, 2012.
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Many company owners wonder how business analytics can help them. The truth is, it's the best way to keep your business healthy. Every business has streams of data generated from both internal and external operations. This type of analytics helps you to aggregate and explore data in order to make better business decisions. It is a key part of gaining business intelligence and can allow you to address multiple areas from product creation to customer retention and everything in between. Any analysis must be tied to business goals.

Types of Analytics

There are many ways of thinking about analytics for your business. Some analysis will concentrate on what has happened in your business in the past, using that information to identify patterns. That's called descriptive analytics. When you use the data you have to think about what might happen in the future, that's called predictive analytics. Many companies also use the data to do predictive modeling to improve the decisions they make.

Comparative analytics compares similar metrics, such as sales, and looks for variables that might affect the figures. Some businesses also think about analytics in terms of whether it is affecting operational, tactical or strategic goals. Using analytics is an ongoing process as every iteration of analysis throws up new areas to explore. As well as mining the data for patterns to uncover the reasons for events and predict whether they will occur again, analytics can also help businesses plan for the unexpected.

Getting the Data Out

One of the most important aspects of business analytics is finding a solution that crunches all the data yet supplies only the information needed to the right people. IT administrators can do this by enabling solutions which provide visual dashboards and reports to employees and managers at different levels. Analytics allows companies to get a holistic picture of their business and to gain insight on historical, real-time or future business events. Done right, it results in a better informed workforce, reduced business risk, and better strategic planning and decision-making, with a corresponding impact on performance and finances. It can help midsize businesses optimize their operations to assist their growth.

The Role of IT Administrators

IT administrators have a significant role to play in the implementation of any business analytics system. This ranges from establishing the parameters of the data needed, to managing data harvesting, storage, and mining as well as creating and deploying systems company-wide and educating users on analysis and reporting features. And, as a recent Midsize Insider article suggests, they may need to increase their skills in data analysis to help businesses evaluate the data and find trends.