Data analytics involves analyzing data to make more informed business decisions. This ultimately leads to a better ability to accurately predict what your industry, market, business, and customer will do. The use of data analytics (and big data) has grown considerably since the turn of the millennia and will continue to grow over the next decade. This is primarily because the ability to properly analyze data enables companies to invest their time, talents, and resources in the right places so that they can maximize their return on investment and minimize risk. Areas that will be of particular importance over the next 10 years include:
- • Customer buying habits: Knowing what people are buying and what they will purchase next is an enormous advantage for companies. By analyzing data properly, businesses are able to detect customer purchasing patterns with better accuracy. This enables them to market the right products and sendees to the right consumers at the perfect time.
- • Market trend analysis: Along with monitoring buying habits of individual customers, companies are now better able to track online activity, point of sale transactions, and dynamic changes in customer trends. This study of human behavior enables businesses to use a more targeted approach for attracting the right customers. By segmenting the market properly, the ability to focus on the appropriate audience can happen everytime. This has grown increasingly effective through the use of social media advertising.
- • Risk management: Risks associated with an organization’s workflow are always present. Through proper analysis, companies are able to identify gaps where they are most vulnerable so they can address them quickly and efficiently.
- • Product development and innovation: The use of data analysis in product development and innovation generates improved decisionmaking through objective, reliable evaluations. It creates the ability to verify product concepts and models quicker and enables companies to gain access to user feedback more efficiently. This ultimately provides companies a more comprehensive understanding of their products and services, and where there are deficiencies, while enabling them to validate the proof of concept faster.
- • Supply chain management: By using analytics in the supply chain, companies are able to predict risks, identify gaps in their system, and quickly spot activities that are wasteful or lacking value. This leads to a more efficient business.2
In the past, you were able to just “go with your gut.” This is no longer the case. You are now required to have data to back up your decisions. Though there has always been some level of data used to determine a course of action, the advanced ability to dissect information to determine how to proceed will be used more due to the increased value it can generate. Companies that choose to maintain the status quo with decision-making will not be able to keep up. Leverage the tools and programs that enable you to dissect data and analyze information. This will enable you to make better, more informed decisions.
- • What type of data could you use to improve your decision-making?
- • What departments would benefit most from the use of data analytics?
- • How could you automate the data you currently track to free up your time to perform other duties?