Businesses need to solve problems and identify opportunities across many functions. Business analytics is the process of transforming data into insights to improve business decisions. Business analytics can reveal previously unknown insights or identify issues to generate new business value. Business analytics can help firms increase efficiency, productivity, and revenue.
Business Analytics Helps Organizations:
- identify new patterns and relationships with data mining;
- use quantitative and statistical analysis to design business models;
- conduct A/B and multi-variable testing based on findings;
- forecast future business needs, performance, and industry trends with predictive modeling; and
- communicate findings in easy-to-digest reports to colleagues, management, and customers.
"Today, virtually every business is a technology business, and what drives growth in technology-enabled businesses is understanding patterns in the oceans of data produced by these businesses…Companies are looking for patterns in how customers behave, how their sales channels sell, how their products and services are used, and how they perform versus their competitors."
Data-driven companies treat their data as a business asset and actively look for ways to turn it into a competitive advantage. Business analytics success depends on data quality, skilled analysts who understand the technologies and the business, and an organizational commitment to using data to gain insights that inform business decisions.
Data management, data visualization, predictive modeling, data mining, forecasting simulation, and optimization are some of the tools used to create insights from data. Business analytics leans heavily on statistical, quantitative, and operational analysis, combined with data visualizations to present findings and shape business decisions. For this reason, balancing your technical background with strong communication skills is imperative to do well in this field.
As Big Data continues to grow, so does the demand for business analytics professionals. So much information exists, spurred over two decades ago by the internet and accelerating at a significantly faster pace over the past few years. Database management and analysis techniques developed in the last century no longer suffice, particularly where unstructured data like product reviews and social media posts is concerned. Business analytics careers—encompassing data analysis, business intelligence, and data science roles—address the new methods for organizing, gaining insights from, and making predictions with this steadily increasing amount of information and frequently incorporate computer science and other technical knowledge.
What do Business Analytics Professionals do?
Business analytics professionals work with data. Data can be utilized from a single function, like customer service (e.g. call center data or customer complaint data) or human resources (e.g. benefit utilization data or recruitment or hiring data). Or data can be collected and linked across a number of different functions or departments, think marketing, sales, finance and customer service to show and predict customer lifetime value. Data visualization, predictive insights, and scenario modeling tools can deliver all kinds of unique insights across an entire organization. Business analytics professionals often make data-driven predictions about the likelihood of future outcomes, using machine learning, data visualization, and natural language query.
Business analytics professionals perform three main tasks:
Collect and Process Historical Business Data
In this function data is aggregated by business intelligence professionals across one or many different data sources. Both structured and unstructured data may be involved. Data is reviewed, cleaned up and packaged for analysis. Often, business intelligence professionals monitor the amount and variety of data coming in and organize it into reports or dashboards.
Analyze Data to Identify Insights (Trends, Patterns, and Root Causes)
Here the business analytics professional, known as a data analyst, makes the data useful by classifying the data and identifying trends. The data analyst and a more senior data scientist (more skill and expertise in manipulating data) look for patterns in the data. They may do some predictive analytics, forecasting, data mining to influence future business decisions, and/or data visualization (the presentation of data into an accessible format that non-technical professionals can easily understand) to aid in management decision-making.
Make Data-driven Business Decisions and Recommendations
Here the business analytics professional assesses trends and works with a business partner to leverage those trends. A data analyst may look at consumer behavior trends, particularly purchasing habits, combined with past weather patterns and predicted weather, to recommend product assortment and forecast adjustments, which impact inventory decisions, purchasing and production schedules. Or that same analyst might review projects slated to kick off next quarter and the current inventory and capacity of skills across the enterprise and recommend skill sets recruiting needs to prioritize when hiring.
Why is Business Analytics Important?
Business analytics offers many advantages to companies by enabling them to uncover insights into past, present and future business operations. Rather than relying on intuition or guesswork, companies can look to quantifiable data for decision-making in marketing, finance, sales or internal processes, to name a few. Business analytics makes this possible with a host of tools that enable companies to exploit their data in new ways. The amount of data collected far exceeds what humans can process, but business analytics tools can not only process the data, they can do it quickly.
Business Analytics Benefits
Business analytics benefits impact every corner of the organization. When data across departments consolidates into a single source, it syncs up everyone in the end-to-end process. This ensures there are no gaps in data or communication, thus unlocking benefits such as:
With business analytics, hard decisions become smarter—and by smart, that means that they are backed up by data. Quantifying root causes and clearly identifying trends creates a smarter way to look at the future of an organization, whether it be HR budgets, marketing campaigns, manufacturing and supply chain needs, or sales outreach programs.
Business analytics software can take unwieldy amounts of data and turn it into simple-yet-effective visualizations. This accomplishes two things. First, it makes insights much more accessible for business users with just a few clicks. Second, by putting data in a visual format, new ideas can be uncovered simply by viewing the data in a different format.
Predictive analytics creates models for users to look for trends and patterns that will affect future outcomes. This previously was the domain of experienced data scientists, but with business analytics software powered by machine learning, these models can be generated within the platform. That gives business users the ability to quickly tweak the model by creating what-if scenarios with slightly different variables without any need to create sophisticated algorithms.
All of the points above consider the ways that business data analytics expedite user-driven insights. But when business analytics software is powered by machine learning and artificial intelligence, the power of augmented analytics is unlocked. Augmented analytics uses the ability to self-learn, adapt, and process bulk quantities of data to automate processes and generate insights without human bias.
How Does Business Analytics Influence Business Decisions?
Businesses need to make accurate decisions based on facts. Past performance is often the best indicator of future performance. In order to compete, successful businesses can no longer be run on gut instinct and limited data. Initiatives that fail take up costly investments, dollars or human resources, that could be deployed elsewhere.
Optimize and Streamline Processes
Insights gained from business analytics optimize and streamline business processes and find new revenue streams. How?
- Assess past investment performance and predict future outcomes;
- Monitor employee performance and productivity;
- Identify gaps in skills for future initiatives;
- Determine staffing needs now and into the future;
- Assess market trends and consumer behavior to predict demand for products and services;
- Monitor performance data from sensors on equipment, engines, machines, etc. to predict in advance when maintenance is required;
- Review past marketing campaign performance to determine future marketing mix.
How Might This Play Out in the Real World?
- A hotel company will turn reservation data into insights by analyzing millions of stays to determine the upgrades guests like you may be most interested in when reserving a room.
- An ecommerce company turns sales data into insights by analyzing millions of purchases to find customers similar to you, predict products you might like to buy, and recommend them to you.
- An insurer turns claims and customer data into insights by analyzing millions of claims, finding customers just like you, predicting your future claims potential, and pricing your new policy accordingly.
- An appliance manufacturer reviews real-time sensor data coming from your refrigerator, identifies a potential service issue, reaches out to you to schedule service, and makes sure the service company is stocked with the parts that might be needed for a potential repair.
As the above examples show, there are many benefits for both the consumer and business.
What Skills do I Need as a Business Analytics Professional?
Basic skills you need to be a successful business analytics professional include:
- Problem-Solving: Logical, analytical thinking, able to connect the dots. Able to solve basic and complex business problems using data and statistical analysis.
- Inquisitive: Have a natural curiosity and a desire to continuously learn. Strong business analytics professionals are always asking why or why not.
- Communication: Able to actively listen by asking questions. Present findings in a clear and concise manner in oral and written form. Tell a story with data through strong writing and presentation skills.
- Critical thinking: Business analytics professionals need to think about the data they should be collecting to move their business forward. They must think about how the data they are collecting is being used and determine if the data being collected is valid. They are expected to analyze and highlight only the data that can be helpful in making decisions.
- Detail-oriented: Must be able to know intimate details about the data such as source, definition, meaning, origin, dependencies, and quality, etc.
- Big picture thinker: Must be able to know how data can be harnessed to analyze and improve tactics, processes and strategies. They must know and understand the strategic goals and objectives the business is trying to accomplish.
- Visualizer: Translate and visualize data in a concise and accurate way what the data consumer can easily understand and use.
Having both a conceptual and working understanding of tools and programming languages is important to translate data sources into tangible solutions. The technical skills a business analytics professional needs include:
- SQL : The coding language of databases is one of the most important tools for a business analytics professional. Professionals write SQL queries to extract and analyze data from databases and develop visualizations to present to stakeholders.
- Statistical languages: R, for statistical analysis, and Python, for general programming are the two most common programming languages business analytic professionals use. Knowledge of these is beneficial when analyzing big data sets.
- Statistical software: Statistical software such as SPSS, SAS, Sage, Mathematica, and even Microsoft Excel can be used to help manage and analyze data.
- Data visualization: Tools providing business analytics professionals with an easier way to create visual
representations of large data sets. Tableau, Qlikview and Microsoft Power BI are just a few of the most popular data visualization tools.
How Much Do Business Analytics Professionals Earn?
Simply put, business analytics professionals get jobs. There are several career paths for a person with a business analytics background, with hundreds of thousands new jobs expected to be created in the next decade. While many different job titles exist, some common job titles, annual salaries, and job growth rates include the following:
|Median Hourly Wage||Job Growth
|Projected Job Openings
|Operations Research Analyst||$82,360||$39.59||25%||25,600|
|Business Analyst, Information Technology||$71,944||$34.59||13%||N/A|
|Market Research Analyst||$63,920||$30.73||22%||163,600|
Source: United States Bureau of Labor Statistics and Payscale.com
$93,000management analyst median salary
$44.71management analyst median hourly wage
What is the Future For Business Analytics Professionals?
As Big Data continues to grow, so does the demand for business analytics professionals. The compound annual growth rate (CAGR) on big data and business analytics over the 2021-25 forecast period will be 12.8%, globally, according to a new update to the Worldwide Big Data and Analytics Spending Guide from International Data Corporation (IDC). And according to a 2020 NewVantage Partners report, 64.8% of Fortune 1000 companies surveyed invested at least $50 million into their business analytics efforts, and 91.5% attempted to implement artificial intelligence (AI)-based technologies in some form.
According to the latest from the U.S. Bureau of Labor Statistics, the number of jobs for Business Analytics professional is expected to experience above average growth. Michigan Tech graduates go on to become successful business analytics professionals.
business analytics projected
job growth, 2020-30
business analytics projected jobs,
Business Analytics at Michigan Technological University
Working towards a BS degree in Business Analytics from Michigan Tech you'll learn how to make sense of a massive collection of data; build models to better predict the future and improve customer and business outcomes; solve business problems, provide business intelligence, and make better data-driven decisions, while improving the customer experience; and so much more. You will benefit from small classes taught by professors with real-world experience. You will work on real-world business analytics. And you will receive 1:1 guidance along the way from an advisor who knows you, your goals, and your challenges.