According to Wikipedia, “Analytics is the discovery, interpretation, and communication of meaningful patterns in data.” It is pretty apparent why would any company use analytics to improve it is current and future value.
By gathering and processing data, a company can find flaws, cut down expenses, make a smart investment, etc. In general, the usage of analysts is limited only by companies imagination. This article will (hopefully) explain how a company can use analytics to improve its efficiency. Moreover, it will inspire that creativity, and help companies come up with new ways of applying and using analytics to their own advantage.
Analytics is in its essence a number’s game. According to one Inc article, gathering and processing data is not a problem; the problem is asking the right questions related to that data. To translate, one must first have a question in mind before gathering data.
Furthermore, one must have an open mind when applying analytics. For instance, you might think that you cannot significantly lower your company’s operational costs. However, gathering as much data as you can regarding your operational costs, structuring that data and analyzing it might surprise you. Not only it could help you boost your profits immediately, but it could also save you money in the long run.
This is just one situation in which analytical processing of data could help your company become even more efficient. Down below you can read the five best ways you can use analytics to improve your company.
1. Targeted Marketing
Marketing has always been important to any company, regardless of what that company is providing to its customers (from burritos to daycare services). Knowing who your customers are and keeping data regarding those customers are is essential.
Also, by analyzing your current customers, you can attract new customers by targeting specific groups of people based on the data you possess, and thanks to the Internet, this is relatively easy (with the emergence of social media, websites, etc.)
2. Predictive Marketing
According to Forbes article, having enough data is the key to predictive marketing. The more predictions you do, the more information you have and companies learn a lot by putting that data to practice.
Marketing affects all spheres of business, from manufacturing to services. A salesperson would like to know who there will be and what products will they buy, suppliers would like to know how much products or materials should they deliver, human resource department would like to know how many employees they need to operate their business successfully. To know all these things a company has to predict as best as it can, and unless it has a crystal ball, it has to analyze the data.
3. Calculating The Risk
There is always a specific risk involved when investing in something because you are investing in the future. To calculate that risk you need to analyze as much data as you can, assuming that the information is relevant to the subject. Gather data from the past, present and project it in the future: the broader your spectrum is, the better.
For example, no one knew that cryptocurrencies would gain such momentum, but some investors calculated the risks and figured that benefits of investing in cryptocurrencies outweigh the potential losses, especially if they did it 5-10 years ago.
4. Competitive Advantage
Five years ago MIT News published an article in which they state that 67% of the companies that used analytics gained an advantage over the companies that didn’t use it. Bear in mind that the was published five years ago.
Three months ago Forbes wrote in their article that 53% of all the companies adopted big data analytics, while that number was only 17% in 2015.
Not only that the analytics helped companies stay on the market, it helped the expand because analytics affected every aspected and almost every decision they made, from small ones to crucial ones.
5. Security Reasons
Detecting frauds, protecting customer data, monitoring transactions, minimizing false insurance claims and recognizing false identities are the things every company needs to keep in mind. The best way to mitigate these fraudulent activities is to gather, maintain and analyze the collected data.
The Internet made it easier for companies to do background checks on potential investors, but it also made it easier for maleficient individuals to create very sophisticated false profiles and knowing the difference between legitimate and fraudulent investors can make a big difference.