Business Analytics Simplified: Definition, Scope, and Benefits

business analytics concept

As technology continues to advance, so does business analytics (BA). Businesses and organisations have always strived to get the upper hand over their competition, so there is a growing demand for more professionals in this field. As a result, universities are now offering specific curriculum and degrees like Masters in Science-Business Analytics to cater to this need.

Curious what career could be waiting for you? Let’s take a closer but simpler look at business analytics to better understand its importance.

Business Analytics Simplified

By definition, business analytics is a combination of tools, systems, skills, and processes that businesses and organisations use to analyse data and statistics for strategic planning. It requires the use of Big Data to come up with the appropriate business model and the right decisions. Big Data is simply a large amount of structured and unstructured data. However, no amount of data is relevant unless an organisation uses all the available information to advance the company.

Scope and Coverage of Business Analytics

With its wide range of applications, business analytics can be confusing to some people. Here are its three main scopes:

Descriptive Analysis. It can be used to analyse data in a more detailed way to understand past and present conditions. This method provides a good measuring stick for companies to see where they are in the market and how successful their past decisions were.

Predictive Analysis. This method is used to assess an organisation’s past performance.

Prescriptive Analysis. This is used to come up with the best strategies to help the business improve its performance and output.

Business Analytics is not Business Intelligence

Business analytics has a lot in common with business intelligence, but they are not the same. While business analytics is geared toward the practical application of models and decisions drawn from data, business intelligence involves collecting different data from all possible sources and preparing it to be used for business analytics.

Business intelligence is the crucial first step to progress that answers the question ‘What happened?’ Business analytics, on the other hand, is the immediate follow-up that addresses the questions ‘Why did it happen?’ and ‘When will it happen again?’

Benefits of Business Analytics

business analytics benefits

As mentioned, companies use business analytics to make wiser, data-driven, and well-informed decisions. Companies that make the most of this system have a more competitive edge because of the following reasons:

It keeps you aligned with your mission statement.

Business analytics quantifies a company’s mission statement and expresses it tangibly to see how much of it you have been complying with. It keeps everyone aligned to a common goal based on the values and mission statement of your organisation.

It promotes critical problem-solving and smart-thinking.

Data is more accessible now more than ever. There is no longer any excuse to come up with a poor decision because data is not on-hand. The presentation of all available data lets you cover all bases to come up with more strategic solutions and valuable decisions.

It gives you a clearer picture of your company’s status with the use of data visualisation.

Visual presentation makes data absorption a lot easier. The use of charts and graphs make statistics and data easier to understand and quantify.

It keeps you up to date.

Business analytics keep you updated with the current trends and changes in the market. It gives you insight into consumer behaviour and preference in a fast-changing and unpredictable world.

It makes you more efficient.

Taking everything into consideration, provided everything is done right, business analytics will put you in a better position of efficiency and productivity.

Business analytics serve an organisation or a business in a lot of other ways. As it continues to evolve, expect the system and process to be more streamlined and focused that will allow your company to perform to its fullest capacity.