An Introduction to Business Analytics
Business Analytics is the all-encompassing term for the process of collecting data from various disparate, unconnected sources and analysing the connections between them, providing an umbrella view of the organization as a whole.
Companies collect all sorts of data across the departments within their organization, be it data on staff salaries, marketing activities, customer statistics, sales, financing or investor and shareholder relations.
In most cases, this kind of departmental data remains siloed, even though it could provide useful insights for other departments too.
Business Analytics aims to unlock the unrealised potential of organizational data to provide actionable insights. This can lead to more efficient business practices, more targeted activities and an overall understanding of the company overall.
In today’s competitive business environment, with the constant threat of digital disruption, implementing strong Business Analytics is more important than ever.
Budgeting, Planning and Forecasting
The most common application of Business Analytics technologies is Budgeting and Planning.
Budgeting and planning are activities undertaken by a finance department to manage the flow of capital throughout the organization. In general, a finance department will produce a yearly budget with multiple forecasts produced during the year. The budget will cover 1 year of expenses and revenue, while a plan or forecast could encompass many years of future prediction.
We improve the budgeting and forecasting process by:
- Facilitating centralized data collection.
- Providing workflow to control the contribution of data
- Providing an overall visibility of the budget collection process
- Making the resultant data and reports available to more departments, with a “single source of truth” throughout the organization
- Standardizing and cleaning data
- Automatically generating reports and visualizations
Often Business Analytics will be applied to solve budgeting and planning requirements first, and is then rolled out to more and more departments within an organization. However, it’s also possible to solve a departmental need as a stand-alone project.
Other ways to utilize Business Analytics
Despite it’s historical roots in Accounting and Finance, Business Analytics can be applied to almost any area of business.
Financial Performance Management is a natural extension of analytics where it is used to monitor and manage the financial performance of a company. Financial performance is a subjective measure of how well a firm can use assets from its primary mode of business and generate revenues.
Combined with developments in computing hardware and software, Business Analytics has become an ever-expanding discipline.
For example, Big Data (exactly what it sounds like) and Cognitive Computing (AI computers that “think”) are now modern realities, opening up almost limitless opportunity for companies to leverage business analytics to improve their bottom line and keep them ahead of their competitors.