There is little doubt that analytics is one of the leading trends in corporate circles globally. Does that mean it’s worth paying attention to?
Business analytics has made a quick rise to the top of many executives’ must-have list. As most business veterans who have been in the trade long enough know, that is ample reason to question whether this is just another passing fad. It could also be a new capability that is going to become essential for any company interested in making smarter decisions.
Business analytics has the potential to be a fad – it all depends on how an organization approaches it. If you go just far enough to check the box of “business analytics” on a strategic plan by buying some software, employing analytics staff etc. you will get exactly what you put into it, or less.
The executives I talk to every day are wrestling with business decisions where a better understanding of data at a very deep level can make all the difference. Take fraud detection, for example; in the recent past, banks were the only companies that had advanced analytics capabilities in place to keep fraud in check. But now other industries such as retailers, manufacturers and insurers are using advanced analytics in similar ways to detect patterns that can indicate when something is amiss.
If you work your way through the list of ground-shaking developments in business today, there is virtually no area where companies can continue to ‘shoot from the hip’. Pricing. Customers. Workforce trends. Supply chain. Security and terrorism threats. These are all complex challenges where advanced signal detection capabilities are critical. The new generation of business analytics tools and techniques can bring those capabilities within easier reach than ever before. The rule is for businesses not to treat these capabilities like the latest round of business hype. When data analytics methods are integrated into your business processes, the result can be a more insightful view of the patterns and signals buried deep below the surface of your data. That is no fad. That is valuable competitive advantage.
Analytics is about embedding insight into your operations to drive business strategy. So, what does that mean? It means that you can leverage the wealth of data you have to guide and evolve the decision making processes; processes such as presenting the next leading product to up-sell or cross-sell to a customer.
Through business analytics, a company can identify the buying patterns of existing customers and derive propensity models. What better way to leverage that information than use it to predict the behaviors of prospective customers? Take it one step further and combine the propensity scores with behavior analytics and embed these into the sales process, increasing the likelihood of offering the right product to the right customer at the right time.
Business analytics allows organisations to leverage their information assets to gain insights, identify exceptions and detect patterns to drive integrated decision-making. Is the path ahead a steep one? The fact is that many companies have the data foundation in place to enable and get value from analytics. The next step is to build on that foundation and take the journey to actionable insights through business analytics.