Business analytics lies at the heart of the movement into data-driven decision making.
Those who work in business collect, analyze and interpret data. It’s all done with the purpose of making a business better in all facets, from improving the bottom line and developing better strategies to creating better products and services.
With organizations in multiple industries examining data – as well as nonprofits and government agencies – the demand for those with skills in business analytics is expected to continue growing.
A November 2016 report from the Society for Human Resource Management found that 59% of companies plan to increase positions with data analysis skills over the next five years. And the U.S. Bureau of Labor Statistics project 27% growth through 2026 for operations research analysts.
Is business analytics right for you?
How Business Analytics Works
The exact nature of a job in analytics depends on the industry and the position requirements. Generally speaking, business analytics involves collecting and analyzing large datasets to find ways of improving a business.
Those improvements can take many forms. For example:
- Finding ways to make operations more efficient (i.e., areas where costs can be cut)
- Identifying new customers for marketing and sales departments to target
- Developing and testing the potential of various business strategies
- Finding ways to leverage current dollars for a better return on investment
Those who work in business analytics take a disciplined, structured approach to collecting, analyzing and interpreting Big Data. They need strong skills in programming, statistical modeling, machine learning and data visualization.
Using Analytics in Sports
Sports, particularly Major League Baseball, provides some of the better known and dramatic examples of using analytics to make improvements.
All technical jargon aside, business analytics is about basing decisions on facts, not on emotions, instincts or guesses. In the case of baseball, teams with less money to spend began moving into analytics to better evaluate players, get a higher return on investment and make in-game strategy decisions based on actual outcomes.
It can get as detailed as deciding what type of pitch to use in a specific inning with a specific pitch count.
It has kept teams such as the Oakland Athletics and Tampa Bay Rays competitive when both teams are near the bottom of the league in money spent on payroll. A data-driven approach also was used by both the Chicago Cubs and Houston Astros to rebuild the franchises from the bottom up. The Cubs and Astros won the last two World Series.
Other Uses for Business Analytics
- Healthcare – Analytics are used to improve patient outcomes. This is done by in-depth analysis of electronic health records (EHRs) and identifying best practices to treat patients with specific conditions. This involves researching the health outcomes of thousands (even millions) of patients.
- Marketing – Analytics are used to interpret the vast amounts of data businesses gather on consumers’ online behavior: website entrances, time spent on the site, page views and completed purchases or sales. All that is extremely valuable information for businesses who are trying to identify customer demographics to better personalize marketing messages.
Challenges In Business Analytics
Technical skills are only part of making the most of business analytics. True success using analytics requires buy-in and commitment, which doesn’t happen in every organization.
Take the baseball example. Despite the success of teams that have turned to analytics, many baseball clubs still do not use them as much as they could. That same attitude is also present in the corporate world.
As pointed out by Analytics Magazine, “The value from insight comes not from the activity but from the execution.” Execution typically involves many different departments working together, including IT, project management, research and, most importantly, executives.
Soft skills are extremely important in this areas, which is why a liberal arts background can mix well with business analytics (all business, really).
Clearly, business analytics is the driver behind innovative approaches in how businesses manage current operations and plan future strategy. That’s why it’s important to modern organizations and worth learning for those who want a key role in the analytics field.