The business world evolves. New technology and increasing amounts of information emerge every year. Technology and data have become pivotal in helping businesses make wise decisions, and one of the best ways to apply them in the workplace is by utilizing business analytics.
Defining Business Analytics
What is business analytics? Techopedia, an online dictionary and encyclopedia of technology, defines it as the procedures that an organization uses to measure performance. Statistics are interpreted and the conclusions are applied to a specific project, product or process. The findings from these statistical methods are used to identify weaknesses so that businesses can make adjustments where they’re needed. Business analytics can even be used to evaluate an entire company, according to Techopedia.
The use of analytics is especially helpful for decision making. Data helps companies increase the probability of making successful business decisions. The increased importance of analytics in the business world has spurred the creation of new software and enterprise platforms. Data collection, however, is useless in the business sector unless companies can draw meaningful insights from all the numbers, as Study.com notes.
History of Business Analytics
Between the 1940s and the 1980s, computers were largely used by universities, the government or IT companies. Other businesses struggled to afford them, as computers were expensive and the data storage systems were often difficult to use. Fast forward to the early 1990s, data storage became less expensive and computers saw huge advancements. The BA Times, an online resource for business analysts, explains that “data storage became less expensive, relational databases were introduced, new object-oriented programs such as Java were invented and the first graphical user interfaces came into being.”
All of these advancements led to rapid growth in the IT world, and programmers were excited to keep exploring new technologies.
Yet even after this boom in the IT sector, prices of computers increased. Many dollars were spent on software rewrites, updates to meet business needs not previously identified, increases in maintenance costs and resolving software defects, according to the BA Times. Businesses wanted certain technology modified for their needs but struggled to speak the language of programmers, and programmers sometimes did not understand the terminology that businesses used. Nonetheless, this language barrier that these professionals faced led to the creation of business analytics.
The goal of business analytics is to find a way to utilize technology to its full capacity in a workplace. BA Times describes the three tenets of business analytics:
- The business needs must drive the development of technology solutions.
- The implementation of a technology solution must be accompanied by the necessary business changes.
- The requirements for IT systems must be defined with accuracy.
Old systems used to focus on No. 3, yet all three of these items must be met for businesses to succeed in today’s global economy. When exploring these requirements, it’s important to understand the purpose behind each one. Here are some questions that business analytics seeks to explore:
- Business drivers – why do we need to make change?
- Business vision – what does the business look like after we make the change?
- Business objectives – how do we measure our success?
- Business requirements – what elements need to be implemented in order to realize the business vision?
- Business rules – what conditions govern the behavior of the implemented solution?
How Business Analytics Is Used Today
The use of business analytics is vitally important for decision making. Business analytics is often used when companies are completing a cost/benefit analysis or when they’re deciding what technologies to use, according to the BA Times. Techopedia explains that it’s also commonly used to set business strategies and goals, as analytics are performed to determine responses to recognized weaknesses and allow businesses to adapt and grow.
Jobs for Those With Business Analytics Expertise
Professionals with business analytics knowledge are in high demand, as companies place importance on finding people who know how to apply data and technology in the business world. Business analyst jobs are projected to grow 12-30% by 2024, which is significantly higher than the 7% growth expected for all positions, as the Bureau of Labor Statistics (BLS) reports.
What do business analysts do? The BLS states that “they formulate and apply mathematical and other optimizing methods to develop and interpret information that assists management with decision making, policy formation, or other managerial functions.” On the job, you may research market conditions, conduct competitor analysis and devise data-based methods of marketing and distribution.
The majority of analysts work in healthcare, government, retail or manufacturing. However, you’ll also find analyst jobs in information technology, human resources, supply chain management, marketing and finance.
Job titles often include the following:
- Business analyst
- Insight and analytics manager
- Systems analyst
- Market analyst
- Planning analyst
- Market research manager
- Financial analyst
Business analysts who’ve gotten some experience under their belt and who have a master’s degree often obtain managerial or executive business roles. With an advanced master’s degree, analysts have the opportunity to not only gather data or oversee the collection of information, but they also get to use that data to make decisions within businesses or organizations.