Why Are Businesses Excited About Analytics
In this competitive world, organisations are putting in best efforts to understand business and implement vital decisions that will drive their business forward. The question to ponder over is – How reliable any decision is? Is it a foolproof decision? Will the decision improve the status of the organisation?
A quote by William Edwards Deming says “In God we trust, all others must bring data”.
Any decision backed up by data (facts and numbers) becomes more reliable than an instinctive decision. Data has an important story to tell and analytics gives voice to such data. A deeper look into the data will reveal lot more information that will allow organisations to do things they could never do. Ronald Coase, Nobel laureate says, “Torture the data and it will confess to anything”.
This is what analysts do; they play with data. Analytics professionals give business insights to the organisation by examining the already available data. Data helps to answer few questions like – What is currently happening with the organisation? Why did it all happen? Data also helps to understand – What is likely to happen and what should we do about it?
Over 90% of all the data in this world was created in the past 2 years. Data in the world is increasing exponentially. They come from every possible source like posts on social media sites, digital pictures and videos, online purchase transaction records, sensors used to gather climate information, banking transaction records and many more.
In every field, you can think of using analytics to harness data and get deep insights be it retail, banking, health care, manufacturing, e-commerce, insurance, telecom, sports, entertainment, pharmaceutical, fitness, hospitality or logistics. In each of these fields, some of the common application of analytics include Marketing Analytics, Sales Analytics, Customer Analytics, Risk Analytics, Financial Analytics, Supply Chain Analytics, Text Analytics, Sentiment Analytics, Human Resource Analytics to name a few.
Here are few real life applications of analytics in our day-to-day life:
- Have you come across section “Recommendations” for similar products on e-commerce site Amazon? Amazon has been collecting customer information for years now. It not only has the information like name, address and phone number, but it also keeps track of everything we ever bought or even looked at once. Using this information Amazon is able to predict what a person will probably buy next and suggests a list of recommended items to him or her. Amazon forecasts the future step of a customer by using his every past activity. Amazon finds out what is the current buying pattern of a customer, predicts what the customer is likely to purchase next time and accordingly provides the recommendations of items as suggestions.
- Fare pricing in Airlines industry is done using analytics. Alaska Airlines uses data science to strategize on their ticket fares, decide on the flight timings, flight sources and destinations, etc.
- Logistic companies like DHL, Blue Dart etc. use analytics to improve their operational activities like packaging, transportation and delivery. They use analytics to decide on the best route of transport, appropriate mode of transport and suitable time of transport.
- All the search engines use analytics to give us the best possible output in fraction of seconds Digital marketing techniques heavily depend on analytics.
Hence, businesses have started to rely on analytics largely and this is going to increase even more with time. Analytics has changed the way businesses take decisions and it is going to be the field to look out for in the coming years.
About the Author:
Varsha Venkatanarayanan is a PGPBA student at SCMHRD, Pune (2016-17).