Business Analytics: Importance and Application in Decision Making

This article discusses the importance and application of Business Analytics in decision making process. It explains how it can help in expansion, identifying target audience, creating business plan and marketing campaign. The article also highlights the use of analytics in different business areas and the benefits of data driven decisions.

Running head: BUSINESS ANALYTICS
BUSINESS ANALYTICS
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Introduction
With the increase and data and technology it has become increasingly important for any
business organization to employ proper tools in the domain of the business so as to ensure that
business on a whole performs considerably well in order to be able to gain a sustainable
advantage in the long term of the business enterprisei. Business Analytics has become quite
popular and many large business houses have been employing it into their daily business
functions to seek differentiation and ace the competition. The business analytics can be described
as the technologies, skills, practices and investigation used to analyze the past business
performance to gain the insight and understand the factors which were responsible for failure and
success. This contributes towards predicting the future performance of the business. The main
analysis is done using statistical methods and data. The article will discuss the increase in the
application of the business analytics in the domain of the business and discuss the ways in which
Analytics can be used for Effective business decision making process.
Analysis
Definition
Business Analytics can be stated as the study of the data with the help of statistical and
operational analysis. It is based on the formation of predictive models, application of the
different techniques of optimization and the communication of the results arrived at to the
different parties like business partners, customers and different college executivesii. Basically, it
can be stated that Business Analytics requires the primary use of Big Data.
Big Data

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Big Data can be described as a term which is used to define the large volume of data and
inundates the business on a regular basis. The data itself holds no relevance, if the analytics is
not performed on the data. Business Analytics and other relevant tools are popularly used to
analyze the Big Data which is available to make better decisions for the firm.
Use of Analytics in the Business
Analytics in business is primarily used for the purpose of growing the business and
seeing to it that the foresight of the business can be analyzed. Business involves high stakes and
thus it requires hard work and sustenanceiii. Business owners need to be largely aware of the fact
that how to identify the different customers and use relative data to find ways in which customers
may be served in a better manner. The ways in which analytics can be useful in a business have
been stated as follows:
Helps in Expansion
Analytics can be used to expand the business. When the organization has relative
information about the growing customer base and asset maintenance then they can be used
effectively to build a detailed business planiv.Analytics can be used effectively in this scenario to
help in finding the insights in visualizations and dashboards and then research further to help in
understanding the results of such expansion plans.
Identifying the correct target audience
It is crucial for the business to be well prepared and to be able to identify the correct
target audience which the firm will be able to serve appropriately. Thus, Business analytics can
be performed using social media analysis and customer internal data.

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Helps in creation of business plan
The real-time interaction with the data also assists in formation of the plans of the current
happening which then can be used with analytics to forecast the different trends in sales, growth
and turnover. Hence, creation of business plan becomes considerably easier.
Formation of marketing campaign
Marketing also forms an essential part of the organization and once the business has
attained adequate information about the local competitors and the audience then the different
campaigns can be made and designed accordingly as per the data which has been analyzed
effectively.
Application of Business Analytics
Banks like Capital one often make use of data analytics to differentiate among different
types of customers which is largely based on credit risk and also differentiate them on the basis
of usage and characteristic as well. The Harrah`s which is a gaming firm also makes use of
analytics for the customer loyalty programsv. A telecom company also uses efficient analytics in
order pursue efficient call center usage for customer service.
Use of analytics for smarter decision making
Businesses can largely benefit from becoming more analytical across the different
spheres and understanding its operations, customers and processes more efficiently while making
the different decisions. The analytical efforts of the business need to be well targeted in order to
ensure that it performs well. It is important for the business enterprises to make a differentiation
in the market in order to be able to attain competitive advantage.

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The different business houses in order to embark on their analytical journey need to
identify the specific business problems which need to be targeted effectively. It can be the
quality of the product or the performance benchmarks which need to be improved. The
companies need to see to it that their integrated business processes are contributed toward the
improvement of the business operations and to see to it the customers are well served in the
organizationvi. Business enterprises need to keep a good target which will then be fulfilled with
the help of using business analytics. It goes a long way in contributing insights rather than just
information. For example, it is the name of a Tesco to understand the different customers better
than anyone in the industry and hence for this purpose, they are required to utilize analytics to
predict the trends and understand product demand.
Analytics helps in taking right decisions by finding the different opportunities which are
available for the organization and use the approach of analytics in the given case. The strategic
plan of the organization concentrates on finding the different opportunities for the growth of the
business but analytics helps the business in finding a logical place to look out for the different
opportunities which may not be able if the company does not apply analyticsvii. The strategy
formulation process requires the application of analytics and helps the company to set definite
targets.
Furthermore, it is considerably important for any business organization to measure the
business trends effectively and be able to understand the trends of the competitors and use them
for the long term success of the businessviii. However, the analysis of the industry is quite limited
in nature and for this purpose, analytics can be effectively applied in order to be able to predict
the trends of the future. They can contribute towards making an in-depth analysis of the different
activities and the future outcomes as well.

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For this purpose, two different approaches for decision making can be adopted. This
includes a bug picture thinking which tends to shape the trend of the business and the different
trends like demographic, economic trends and changes the customer would like to see. The
performance assessment is done and what works best for the business is figured out.
Secondly a systematic survey of the inventory in a business processes can be done with
respect to the key business decision mining and thus the benefits of analytics can be reaped
effectively.
Using business analytics, the given can be incorporated:
Complex decisions with various steps and variables
Simple decisions where consistency is desirableix
Decisions wheel understanding of connections and correlation is crucial
Business areas requiring forecasting techniques
The benefits of decision making with analytics are given as follows:
The businesses can use data driven decisions to gain the following with the help of business
analytics
Can conduct data mining which assists in finding new patterns and relationships
Helps in conducting statistical analysis and quantitative analysis
Tests like A/B testing and multivariate testing can be conductedx
Predictive modelling and predicting analytics can be done to forecast for the future.

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Furthermore Business Analytics can also support the companies in making proactive
tactical decisions and automate the entire decision making process to support real time responses
for the same.
Conclusion
Therefore, from the given analysis it can be stated that business analytics tends to play a
key role in the domain of the business and that it is increasingly important for the domain of
business. The article discussed various ways in which business analytics contributed to decision
making in an organization and should be implemented for long term success.

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References

i Shmueli, Galit, et al. Data mining for business analytics: concepts, techniques, and applications in R. John Wiley & Sons,
2017.
ii Loebbecke, Claudia, and Arnold Picot. "Reflections on societal and business model transformation arising from
digitization and big data analytics: A research agenda." The Journal of Strategic Information Systems 24.3 (2015): 149-157.
iii Ragsdale, Cliff. Spreadsheet modeling and decision analysis: A practical introduction to business analytics. Nelson
Education, 2014.
iv Liebowitz, Jay, ed. Big data and business analytics. CRC press, 2013
v Laursen, Gert HN, and Jesper Thorlund. Business analytics for managers: Taking business intelligence beyond reporting.
John Wiley & Sons, 2016.
vi Turban, Efraim, et al. Business intelligence: a managerial perspective on analytics. Prentice Hall, New York, 2013.
vii Lim, Ee-Peng, Hsinchun Chen, and Guoqing Chen. "Business intelligence and analytics: Research directions." ACM
Transactions on Management Information Systems (TMIS) 3.4 (2013): 17.
viii Vera-Baquero, Alejandro, Ricardo Colomo-Palacios, and Owen Molloy. "Business process analytics using a big data
approach." IT Professional 15.6 (2013): 29-35.
ix Wixom, Barbara H., Bruce Yen, and Michael Relich. "Maximizing Value from Business Analytics." MIS Quarterly
Executive 12.2 (2013).
x "Business Analytics Make For Smarter Decisions". Computerweekly.Com, 2018,
https://www.computerweekly.com/feature/Business-analytics-make-for-smarter-decisions. Accessed 3 July 2018.

References
Shmueli, Galit, et al. Data mining for business analytics: concepts, techniques, and applications in R.
John Wiley & Sons, 2017.

Lim, Ee-Peng, Hsinchun Chen, and Guoqing Chen. "Business intelligence and analytics: Research
directions." ACM Transactions on Management Information Systems (TMIS) 3.4 (2013): 17.
Turban, Efraim, et al. Business intelligence: a managerial perspective on analytics. Prentice Hall, New
York, 2013.
Liebowitz, Jay, ed. Big data and business analytics. CRC press, 2013.
Loebbecke, Claudia, and Arnold Picot. "Reflections on societal and business model transformation
arising from digitization and big data analytics: A research agenda." The Journal of Strategic
Information Systems 24.3 (2015): 149-157.
Ragsdale, Cliff. Spreadsheet modeling and decision analysis: A practical introduction to business
analytics. Nelson Education, 2014.
Laursen, Gert HN, and Jesper Thorlund. Business analytics for managers: Taking business intelligence
beyond reporting. John Wiley & Sons, 2016.
Vera-Baquero, Alejandro, Ricardo Colomo-Palacios, and Owen Molloy. "Business process analytics
using a big data approach." IT Professional 15.6 (2013): 29-35.
Wixom, Barbara H., Bruce Yen, and Michael Relich. "Maximizing Value from Business
Analytics." MIS Quarterly Executive 12.2 (2013).
"Business Analytics Make For Smarter Decisions". Computerweekly.Com, 2018,
https://www.computerweekly.com/feature/Business-analytics-make-for-smarter-decisions. Accessed 3
July 2018.