Business Analytics - Meaning, Importance and its Scope
The word analytics has come into the foreground in last decade or so. The proliferation of the internet and information technology has made analytics very relevant in the current age.
Analytics is a field which combines data, information technology, statistical analysis, quantitative methods and computer-based models into one. This all are combined to provide decision makers all the possible scenarios to make a well thought and researched decision. The computer-based model ensures that decision makers are able to see performance of decision under various scenarios.
Business analytics has a wide range of application from customer relationship management, financial management, and marketing, supply-chain management, human-resource management, pricing and even in sports through team game strategies.
Importance of Business Analytics
Evolution of Business Analytics
Business analytics has been existence since very long time and has evolved with availability of newer and better technologies. It has its roots in operations research, which was extensively used during World War II. Operations research was an analytical way to look at data to conduct military operations. Over a period of time, this technique started getting utilized for business. Here operations research evolved into management science. Again, basis for management science remained same as operation research in data, decision making models, etc.
As the economies started developing and companies became more and more competitive, management science evolved into business intelligence, decision support systems and into PC software.
Scope of Business Analytics
Business analytics has a wide range of application and usages. It can be used for descriptive analysis in which data is utilized to understand past and present situation. This kind of descriptive analysis is used to asses current market position of the company and effectiveness of previous business decision.
It is used for predictive analysis, which is typical used to asses previous business performance.
Business analytics is also used for prescriptive analysis, which is utilized to formulate optimization techniques for stronger business performance.
For example, business analytics is used to determine pricing of various products in a departmental store based past and present set of information.
Data for Analytics
Business analytics uses data from three sources for construction of the business model. It uses business data such as annual reports, financial ratios, marketing research, etc. It uses the database which contains various computer files and information coming from data analysis.
Business analytics can be possible only on large volume of data. It is sometime difficult obtain large volume of data and not question its integrity.
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