In present business environment usage of data analytics play an important role in decision making. The usage of analytics as a decision-making resource, remains in its development stage and will continue to evolve as it generates significant financial benefits for the organizations through effective business strategies.
The evolution of analytics
Basically, by using analytics, organizations can make good business decisions. Reports with mere numbers don’t help organizations to succeed in the competitive business environment. Information must be provided in such a way that best suits the decision-makers with real time insights.
However the practice of using data analytics to manage data and performance is only at the beginning as a competitive resource for organizations though few organizations are using analytics for decision making. Corporations and organizations are moving to use big data and analytics to track consumer sentiment, build customer loyalty, gain competitive advantages, and make more effective business decisions. How best to do and who should ultimately be responsible for managing and maximizing a company’s data assets remains variable for many organizations.
Big data analytics offers three advantages – problem solving, predictive in nature and implementable. Organizations ensure to take advantage from these benefits. All the organizations can benefit from by carefully capturing, analyzing and implementing the decisions yielded from big data analytics. Below picture describes the importance of analytics in decision making.
Analytics – Advantages
Data analytics is playing an increasingly large role in corporate decision-making and gaining momentum in making strategy. Organizations of all sizes are tapping data to better understand and improve their operations, financial models, customer relationships, supply chain, workforce, business opportunities, and competitive standing. Analytics have multiple advantages if one can properly channelize the benefits of it.
One can exploit the advantages of analytics by making a shift from making decisions from intuition to believe that huge amounts of data organizations posses would give better decision making power by using analytics.
The domains where big data and analytics are used have realized the importance in income generation and cost control/reduction because facts and insights derived from data are driving organizations to make wise investments and ROI.
Many companies are using big data analytics to maximize their marketing and sales performance in all the customer targeted projects. Credit goes to the data analytics which consolidated the huge amounts of unstructured data generated through websites, call centers, social media, and other customer data resources. Below picture gives the present trend on who actually uses data analytics in the organizations.
Many organizations are looking at data analytics to increase ROI. Data analytics are increasingly used by top executives in customer planning for a variety of income-related initiatives as customers are beginning to expect a more personalized approach and often view carefully designed and communicated messages or offers as desirable.
Data is very important as we invest money on analytics as the insight and analysis are obtained from quality data. It is very important to control cost aspect in supply chain management as cost for procurement directly affects other costs. The reasons chosen in the areas of regulatory and risk are not directly tied to income or cost control, they certainly have an indirect impact on the financial performance of an organization. Here data analytics play an important role in optimizing supplier and vendor relationship.
The incidence of corporate fraud is increasing within complex supply chains through layers of connected suppliers. Data analytics gives insight and data transparency which facilitates to arrest the fraud. Organizations are encouraged to use data analytics to increase sales, give scope for innovative opportunities, forecasts financial performance and gives an understanding about financial drivers.
There is a debate among data analytics practitioners whether analytics should be a more centralized function or one that is part within various corporate work streams and various departments. There are varied opinions on this subject.
Many organizations do not possess the technology and infrastructure to capture data and to use analytics to support strategic decision making. A centralized structure with access to resources to build out a technology platform, data warehouse, and staffing capabilities, may help overcome that deficiency among many currently decentralized organizations. Below picture tells us about the usage of analytics by various groups in organizations.
Limitations in using the Analytics
Below picture is about the various factors influencing the usage of analytics
Piling up of huge amount of data poses a problem for data management in organizations. Data quality is important to make analytics to play a more significant
role in the enterprise. Many companies continue to struggle with the huge data stock and finding it difficult to categorize, synthesize, access, and analyze it. Data analytics addresses these issues and gives insight and decision making power to executives. Organizations are struggling with processes and systems, business unit-based data sources and shortage of data scientists who are capable of effectively analyzing the data. The amount of data accumulating and in such a variety of forms exerts a huge pressure on organizations. Organizations are struggling to handle the data and to use it to make effective business decisions. Another key issue for analytical progress is that many organizations lack skill levels required for data analytics within the organization. Companies have to overcome the system of “top to down the line information flow” which is an outdated process. Below mentioned picture gives an idea about the quality of data in the organizations.
Many organizations lack the robust and effective reporting & predictive tools and tools for analyzing unstructured data. Also advocacy at executive level on using analytics and on other reasons that analytics is not more widely used in supporting organizations’ strategy, including lack of correct talent to support analytics. Because top executives have to plan budget for acquiring analytical tools. To sum up, quality of data, inadequate skill and staff to use analytical tools, basic infrastructure to organize data and lack of advocacy at senior leadership are the barriers for wide spread use of analytics.
Future of Analytics
Data analytics help the organizations in taking meaningful business decisions, understand the risks, opportunities, improves revenue & ROI, drives organizational growth and gives scope for further investment to acquire data infrastructure there by facilitates strengthening customer relationships. Many organizations are getting benefited by making its customers loyal to their business. Companies will understand the market dynamics in a better way by using data analytics. They can improve product range and be able to design suitable marketing strategies and generate revenue and ROI.
Newer analytics are introduced to predict sales, customer conversion analysis and customer behavior analysis. In clinical trials data analytics are used to determine the optimum dosage levels of a drug for clinical use. Organizations are exploring for new analytic tools to generate revenue, to have better insight from data, to develop strong relationship with customers and to speed up the benefits to reach customers in a faster way.
Organizations must equip themselves with data analytics to drive competitive advantage and to generate profits. They must acquire and improve the human resource to manage huge volumes of structured and unstructured data to get competitive advantage.
- Use analytics for better decision making
Success of any organization depends on decision making. Strategic decisions can be made from quality data and analytics. Organizations must attempt to improve data quality, infrastructure and use data analytics to harvest the benefit of decisions.
- Analytics advantage in marketing
There are many areas to which analytics can be applied, but the best financial returns often come from marketing and customer-oriented applications
- Coordination within the organization for analytics
Instead of having analytic tools in various departments and geographies, plan for centralized coordination to have better information flow and decision making.
- Strategy to reap the benefits for a long time from analytics
Organizations must plan the growth of analytical capabilities over time as analytics will drive the strategy and offers tangible financial benefits to organizations.