The Value of Business Analytics

Business analytics plays an important and multi-faceted role within an organization. It provides support for strategic planning, delivers tactical value, and creates competitive advantage. What is the value of business analytics? Well, first we should establish that the cornerstone of business analytics is pure analytics. A broad definition of analytics would be to consider any data-driven process that provides insight. It can encompass historical and predictive information, and ultimately, its goal is to transform data in to information that aids the organization. In order to get a more thorough understanding of business analytics, it is important to look at the three important things it provides: strategic planning, deliverance of tactical value, and creation of competitive advantage.

First, let’s look at strategic planning. Strategic planning involves targeting opportunities for the growth of an organization based on innovation and marketplace impact, as well as differentiation from competitors. Some good questions to ask, when getting specific about applying strategic planning, are: what are the industry trends that indicate opportunities/need for change? Looking to your competitors on a regular basis is important in order to stay informed and alert about keeping up with your consumer expectations and competition. But, don’t just isolate your analysis to your industry. Consider other related industries that could provide insight, you never know where inspiration might come from.

Second, let’s look at delivering tactical value. To successfully deliver tactical value, it is important to focus on types of initiatives it would be possible to deliver. It is important to map out the creation of tactical value by utilizing business analytics to establish a balance between the need for immediate value and competitive advantage. To do this it is essential to define the direction that needs to be taken, prioritize the activity that will result in delivering tactical value, and identify how these activities will be maintained and evolve in to a competitive advantage.

Lastly, let’s look at creating competitive advantage. Looking to the future of the organization, by understanding the organization’s history and goals, can help establish what is needed to create a competitive advantage. To do this, it is important to keep up with competitors and industry trends. Using business analytics can help an organization prepare for potential scenarios in which they will need to respond to change or implement new strategies.