Additional capabilities like data visualization and dashboarding make it easy to collaborate and share insights — all essential aspects when decisions are on the line.

Boost revenue

Analytics helps discover new opportunities, cut losses and tap into market insights to recommend product and service updates.

Adjusting inventory and marketing strategies becomes easier by identifying which products sell better. But that’s not all — pricing and product positioning matter too.

You can incentivize the purchase of less popular products by offering them alongside desirable items. But if the price of the bundle isn’t attractive enough, customers might feel forced to buy less desirable items.

Risk assessment can provide a clear picture of the viability of such offers and pricing strategies.

Improve efficiency

Organizational insights help eliminate waste to streamline processes and reduce costs. Setting and tracking business-critical KPIs (key performance indicators) keeps you informed about performance and spending.

Anticipating outcomes with predictive modeling avoids costly surprises and keeps you in the green. Scenario simulation helps in hypothesis testing — how soon will your machinery need maintenance if it runs for four hours extra daily?

Managers, CEOs and department-level executives can perform independent data analysis with automation and augmented analytics.

Additionally, it helps uncover discrepancies in resource allocation and budgeting overlaps. Are your storage costs eating into your revenue? What’s the percentage of loss-making product categories, and how much did you spend on them last year?

Enhance customer experience

Improving the UX involves omnichannel insights, sentiment analysis, customer feedback and segmentation techniques.

A business analyst maps customer journeys across omnichannel sources to understand where your product sells better and suggests ways to push marketing efforts through those channels.

Developing buyer profiles involves segmentation techniques, customer psychology and statistics.

Feedback forms, surveys and customer service interactions contain a treasure trove of buyer data, and business analytics combines these insights to help you sell better.

Additionally, sentiment analysis gives insights into brand perception and customer satisfaction that can help you develop targeted marketing strategies.

Mitigate risk

Business risks include losing out to competitors, system crashes, ill-suited investments, negative buyer sentiment and malicious intent.

Business analytics techniques address these challenges head-on, including prioritizing risk by quantifying the potential impact. Determining issues that demand immediate attention gives a clear line of action to decision-makers.

Business analysts derive solutions to retain and consolidate your market position, optimize system performance, invest wisely and heed customer sentiment.

They can recommend guardrails and process improvements to prevent insurance and financial fraud and malicious data leaks. Additionally, equipment data can help you plan preventive maintenance to prolong machine life.

Applications

Retail and Marketing

Business analytics digs into purchase patterns, uncovering hidden segments like young spenders or budget-conscious families.

Techniques like RFM analysis and cohort studies reveal who buys what, when, and why, predicting future choices and identifying potential churn.

Demand forecasting becomes precise with ABC analysis, prioritizing high-value items for sophisticated predictions while simpler techniques guide lower-tier products.

As trends shift, predictive modeling refines inventory management, ensuring hot sellers are always on shelves and slow movers optimized for profit.

Check out our list of Best Inventory Management Software.

Manufacturing ERP

Leveraging ML algorithms and statistical models, businesses in manufacturing avoid overstocking and stockouts through demand forecasting. Intelligent production planning mitigates risk by minimizing supply chain disruptions.

Linear programming and simulation tools identify the most efficient ways to meet demand. For predictive maintenance, a manufacturing company uses forecasting to anticipate equipment failures, preventing production delays and missed deadlines.

Maintaining supplier relationships while planning for the unexpected with contingency strategies is a business analytics strategy.

Ecommerce

In the ever-evolving world of eCommerce, customers are just a click away from moving to your competitors. Website analytics helps you create a more complete shopping journey.

Analyzing visitor behavior on your portal helps identify blockers to conversions. Are your product pages confusing? Is checkout too complicated? A business analyst pinpoints issues with website usage data and suggests ways to fix them.

Recommendations can include testing website layouts, calls to action and promotional offers to see what resonates with your audience. A/B testing helps dynamically tailor the UX to visitors based on their browsing history and profile.

Business Analytics Vs. BI

Business intelligence is like a rearview mirror, analyzing past performance to answer what happened and why. This discipline employs basic statistical analyses, visualizations and reports for data interpretation.

BI reports and dashboards aim for a broader audience, including business users, managers and executives who need quick access to information.

Business analytics serves as the windshield, using advanced predictive analytics techniques and future-oriented insights to answer what will happen and how we can improve. It involves a combination of data analytics techniques, including BI.

This discipline primarily caters to data analysts, scientists, and business strategists who require in-depth analysis and forecasting capabilities.

Types

Descriptive Analytics summarizes what has happened in the past. For example, a retail store analyzes daily sales data to determine which products are selling well. It helps them decide what to stock and how to allocate storage and salespeople.

Diagnostic Analytics involves finding the reasons behind past events. A bank analyzes customer service calls to understand why customers canceled their accounts. Root cause analysis can help uncover and address their pain points.

Predictive Analytics uses historical data and statistical models to forecast future outcomes. For instance, a hotel crunches the numbers to allocate a realistic marketing budget for cashing in on the upcoming Taylor Swift concert in the city.

Prescriptive Analytics recommends the best course of action based on the analysis. A preventive maintenance system provides alerts and recommendations for equipment repair and replacement.

FAQs

What is business analytics?

Business analytics refers to the practices, technologies and tools for suggesting performance-enhancing improvements in client transactions and internal operations.

It focuses on understanding the strategic goals and challenges of the business and tailoring data analysis to address them.

Knowledge of programming languages (Python, SQL), data analysis tools, statistical methods and database management is an asset. Other required skills include communication, critical thinking, problem-solving and business acumen.

Read more in our Business Analytics vs Data Analytics article.

What is business analytics software?

Business analytics systems are applications for analyzing and interpreting organizational data to manage processes and suggest improvements. Dashboards, reports and visualizations assist in sharing insights.

By leveraging these tools, you can gain a deeper understanding of operations, customer behavior, market trends and overall business health and detect improvement opportunities.

Statistical analysis, data mining, predictive modeling and advanced analytics assist in strategic decision-making.

How does business analytics work?

Before we can perform business analytics, transforming raw data into actionable insights is essential.

1. Data Collection and Preparation: Big data integration and ETL systems gather information from internal systems, external databases, customer surveys, cloud applications, BI platforms and websites.

Warehouses serve as data stores and transformation tools, converting the information into a standard format for analysis. Data cleaning is manual, involving the removal of inconsistencies, missing values and errors.

2. Data Management: Data governance tools and policies establish data ownership, access controls and quality standards.

At the end of the data pipeline, the data management system will archive unused data while keeping the system updated by connecting to new sources.

3. Data Analysis: Data mining tools discover hidden trends and correlations. Simulation techniques, like what-if analysis, help you assess potential outcomes by redefining models and individual values.

4. Advanced Analytics: It’s the stage where the real magic happens. Machine learning and AI enable forecasting, process optimization suggestions and anomaly detection in data. Text processing unlocks customer insights from feedback forms and social media comments and posts.

5. Visual Storytelling: Data visualization tools transform numbers into charts, graphs and compelling narratives, making insights clear and easily digestible.

Collaboration tools facilitate data sharing and team discussions, democratizing insights and driving collective action and shared project ownership.

Who uses business analytics?

Business analytics empowers everyone, from CEOs to frontline employees. Data analysts are the primary users, building models and generating reports for various stakeholders. Often, a data and business analyst are the same person.

CEOs (Chief Executive Officers) use analytics to understand market trends, track competitive landscapes and inform strategic decisions like mergers and acquisitions.

CFOs (Chief Financial Officers) perform financial forecasting, risk management, budgeting and resource allocation.

COOs (Chief Operating Officers) use business analytics to improve operational efficiency, identify bottlenecks and streamline processes.

Across Departments

• Marketing: Analytics helps personalize and track campaigns, segment audiences, and optimize marketing spending.
• Sales: You can predict customer behavior, identify lead-scoring opportunities, improve closing rates and optimize sales territories.
• Human Resources: Analytics guides talent acquisition and workforce management, including employee performance tracking.
• Operations: Analytics helps track inventory levels, optimize supply chains, predict equipment failures and streamline production processes.
• Product Development: Data insights assist in understanding customer preferences and inform product features.

What can’t a business analytics platform help with?

Being realistic with your expectations will help you assess your business analytics investment objectively.

Despite the power of analytics, actual decision-making is up to humans, and data can’t replace experience and understanding of the market. Practicing analytics doesn’t guarantee success, though it’ll teach you valuable business lessons.

Business analytics systems usually work with structured data and can’t predict the future with certainty — forecasts can be off the mark.

Remember, business analytics isn’t a magic bullet and won’t solve underlying inefficiencies — it merely reveals them, paving the way for you to devise solutions.

How much do business analytics platforms cost?

It depends on the deployment model, solution complexity, number of users and industry-specific needs.

Cloud systems are affordable with a subscription model and can range from $10 monthly to hundreds of dollars. On-premise systems are yours to own but require considerable upfront investment.

Pricing for Microsoft Power BI starts at $9.49 per user monthly. Tableau Desktop costs a one-time licensing fee of $70 per user.

Tips for cost-saving:

• Start with a basic solution and scale as needed.
• Optimize user licenses to avoid paying for inactive users.
• Consider open-source or free alternatives for basic needs.
• Negotiate with vendors and compare product prices before buying.

Should I consider a free business analytics solution?

The choice between free and paid tools depends on your specific needs, budget and data volume.

For limited data and personal needs, free tools like Zoho Analytics Personal, Power BI Desktop, and Tableau Public offer no-cost entry into the world of data analysis.

They’re excellent for getting your feet wet if you’re new and for personal projects and small businesses.

Open-source tools like KNIME and Apache Spark offer the advantages of customization, community support and developer collaboration. Besides, free tools are great for a trial run of the product before going for the paid version.

Consider combining multiple tools for different capabilities.

Should I choose cloud or on-premise deployment?

The cloud is cost-effective, scalable and lightweight, offering a low entry barrier with flexible subscription tiers and multiple deployment options from hybrid to multi-cloud.

What’s not to like?

But we can’t dismiss on-premise software completely. Setups opting for self-hosted analytics include large organizations with existing infrastructure and those that require greater control and customization.

But, you need sufficient budget and IT expertise to go on-premise, and scaling can be complex and resource-intensive.

How should I choose business analytics software?

Choosing business analytics software is complicated and time-consuming, with thousands of software solutions to choose from. Whether you plan to upgrade to a new solution or seek your first analytics platform, we’re here to help.

Get our free comparison report to assess your preferred products on your choice of features.

Follow our nine-step software selection methodology to choose the best platform.

Have questions about which software vendor is the best fit for you? Reach out to us for personalized recommendations.

Prepare for vendor discussions by going through the following resources.

• Business Analytics Requirements Checklist
• Business Analytics Dashboards
• What Is The Business Analytics Process?
• Future of Business Analytics Trends

Got questions about selecting a best-fit software vendor? Our team is ready to assist you! Feel free to contact us for personalized recommendations at [email protected] or by phone at 855-850-3850.

Good luck!