Most modern businesses run on data. Thanks to modern technology, they often have staggering volumes of data at their disposal that needs to be organized, assessed, analyzed and transformed into useful information that will help the business become more efficient and successful. This type of analysis is performed by highly skilled individuals known as business data analysts.
Business data analysts help businesses sift through all of the data they collect and make recommendations on improving products and services while identifying deficiencies. These professionals are also responsible for evaluating current business models and organizational processes and implementing new technology to improve these areas.
Their role saves businesses money in the long run by highlighting any areas of inefficiency or redundancy through data and suggesting new ways to prevent further issues. They can also analyze the data produced by the business to find new ways to expand, whether it’s by increasing its customer base or identifying new paths of revenue.
Business analysts wear many hats in a company, but they primarily use data analysis to solve challenges the business faces. They look at different types of system management in the industry and study business models so they can make recommendations on improving processes and services while finding any gaps that exist. The role of these professionals is essential in helping a business grow and expand.
Why are business data analysts important?
The role of data in today’s businesses has risen exponentially in the last 10 years, and the skilled analysts tasked with analyzing that information are more important than ever. Their job often entails working with IT departments and business teams to find the best avenues for growth and serving as a bridge between these two teams. They also assess historical data to find any existing gaps in service and identify better ways to use resources and technology. These solutions help businesses save money that can be better spent on new projects or staff.
To serve as a bridge between IT and non-IT staff, business analysts need to be educated in both aspects of the business so they can confidently provide expertise to these areas. Accredited schools such as St. Bonaventure University offers programs such as a master of business analytics online that can provide the knowledge a business analyst needs to do their job effectively. These courses can also give people who work full-time the opportunity to enhance their education while supporting themselves.
There are four types of analytics used in business: descriptive, diagnostic, predictive and prescriptive. Here is a closer look at each one.
Descriptive analytics
Descriptive analytics is used by business data analysts to gain insight into past performance and understand what has happened in the business. They use descriptive analytics to summarize and analyze historical data to identify patterns, trends and relationships within the data. This analysis can help business analysts draw insights from data and better understand their organization’s operations, customer behavior and business environment. Descriptive analytics often forms the basis of other analytical techniques, such as predictive and prescriptive analytics.
Diagnostic analytics
Diagnostic analytics is used by business data analysts to understand what caused certain events to occur. It involves analyzing data to determine the root cause of specific outcomes or problems and helps analysts understand the reasons behind them so they can identify opportunities for improvement or make more informed decisions.
For example, when sales are declining, diagnostic analytics can help determine the cause. By analyzing sales data, businesses can identify specific factors affecting their sales, such as pricing, competition and customer satisfaction. These insights can be used to develop strategies to address these factors and improve sales performance.
Another example of diagnostic analytics at work can be seen when website traffic is decreasing. Diagnostic analytics can be used to identify the factors affecting user experience. By analyzing data on website traffic, page performance and user behavior, businesses can pinpoint issues with website design and user experience to improve engagement and conversions.
If a product or service is experiencing high customer churn, diagnostic analytics can be applied to identify the source. By analyzing customer data, businesses can determine which factors are causing customer dissatisfaction, whether it’s quality issues, poor user experience or pricing. This information can be used to improve the product or service offering and prevent customer churn.
By understanding the reasons and factors behind specific outcomes, businesses can make smarter decisions about how to improve their operations and better serve their customers. Diagnostic analytics can be used in conjunction with other types of analytics, such as descriptive analytics and predictive analytics.
Predictive analytics is used by business data analysts to forecast future trends and outcomes based on historical data. This technique involves using statistical modeling and machine learning to analyze large sets of data and identify patterns, trends and relationships between variables that can help predict future events. Predictive analytics can be used in many business areas, from financial forecasting and marketing to supply chain management and logistics.
Predictive analytics can be used to forecast future demand for products or services based on past buying trends and other data points. This information can help businesses ensure they have enough inventory on hand to meet customer demand, optimize pricing and increase revenue.
This type of analytics can also be used to identify incidents of fraud by analyzing patterns and anomalies in transactional data. This helps businesses quickly identify and prevent fraudulent activities, saving them money and protecting their reputation.
Predictive analytics can be used to better understand customer behavior and preferences, allowing businesses to make personalized marketing recommendations. This helps businesses optimize their marketing efforts, improve customer engagement and increase sales.
It can also be used to anticipate potential disruptions in the supply chain, such as inventory shortages or delivery delays. This information can help businesses plan for these issues, minimizing their impact on operations and customer satisfaction.
Predictive analytics helps businesses gain valuable insights into future trends and take action to optimize their operations or take advantage of opportunities. By applying statistical models and machine learning algorithms to historical data, predictive analytics provides businesses with a powerful tool for forecasting future trends.
Prescriptive analytics
Prescriptive analytics is used by business data analysts to provide specific recommendations about what actions should be taken to achieve a desired outcome. This involves using advanced algorithms, optimization techniques and simulation to identify the best course of action to take in a given situation. Prescriptive analytics complements other types of analytics, such as descriptive and predictive analytics, by providing a framework for decision-making based on predicted outcomes.
Prescriptive analytics can be used to determine optimal pricing for a specific product or service. By analyzing past sales data, market trends and other variables, prescriptive analytics can generate recommendations on price changes that may improve revenue.
It can also be used to optimize inventory levels, ensuring that businesses have precisely the right amount of stock on hand to meet demand without overstocking. By analyzing data on historical inventory and demand patterns, prescriptive analytics can generate recommendations on how much stock to order and when to order it.
This type of analytics can be used to determine the most effective marketing channels and messages for reaching target audiences. By analyzing data on customer behavior and engagement, prescriptive analytics can generate recommendations on which campaigns to invest in and how to allocate marketing budgets to achieve the highest return on investment.
Prescriptive analytics can also be used to identify potential risks to a business and develop strategies for mitigating them. By analyzing data on previous incidents and current trends, prescriptive analytics can provide recommendations on how to minimize the impact of potential risks.
Prescriptive analytics offer businesses a powerful tool for refining their operations and making data-driven decisions. It can help businesses optimize their performance, reduce inefficiencies and mitigate potential risks.
Skills needed to be a successful business analyst
The role of business analyst is a challenging and rewarding one that is akin to a management position in most businesses. Working with data requires a high level of technical expertise, along with the business knowledge needed to understand what the data says about the company’s steps to success.
Other areas of knowledge required include data investigation and analysis, and the ability to use structured query language (SQL) databases. Analysts should possess strong skills in statistics and mathematics, as well as the ability to use software to present reports to stakeholders in an easy-to-follow format.
Reasons businesses should hire a business analyst
Business analysts help companies maximize their customer base’s level of engagement while optimizing existing processes and implementing upgrades they may not have otherwise thought of. These professionals will help the business establish appropriate goals and key performance indicators (KPIs) to measure what success looks like in the future. If a company can track the right data and ensure their major projects are on the right trajectory, they can better determine when a process or procedure needs to be tweaked or enhanced.
Business analysts can also help companies accomplish their goals by helping them create a minimum viable product (MVP) and improve it. In most companies, it is more effective to launch an MVP and then use feedback data to make enhancements that will better serve the customer. Business analysts can help the business decide what should be launched in the MVP and keep them on track to meet deadlines. These professionals can help any organization unlock the full potential of its investments in technology and make better decisions.
This means that business analysts must possess certain soft skills in addition to technical knowledge to work effectively with all departments of an organization. By acquiring and developing skills such as communication, listening and business acumen, business analysts can help organizations make better decisions, improve operational efficiency, and drive business growth.
Communication
Exceptional communication skills are vital for business analysts to succeed in their careers. These professionals are dealing with all levels of an organization and need to be able to speak to each department in its own language, whether they are reporting to individuals at the executive level or conversing with IT engineers. The ability to put forward ideas and solutions that appeal to a broad range of people is a necessary skill that is enhanced with experience. Successful business analysts know that being able to simplify complex technological concepts and frame them in a way that makes business sense will help move the organization toward success.
Active listening
Business analysts are trained to listen to the leadership of an organization to understand its long-term goals. They are experienced in asking open-ended questions to obtain as much information as possible to guide their data analysis. A good business analyst will respect the wishes of leadership and avoid letting their own beliefs influence their actions.
Relationship building
So much of what business analysts do is based on building solid relationships within their organization. To drive success and improve processes, these individuals must work with leaders in all departments. Without teamwork or mutual respect, they are unlikely to be effective.
Business analysts can also build strong relationships by working closely with other employees to find out more about the obstacles they face and helping them find solutions to achieve their goals faster and more efficiently.
Problem-solving skills
Business analysts should be able to use analytical and problem-solving skills to identify pain points in the organization’s processes and recommend solutions that enhance efficiency and productivity. They should be knowledgeable enough in IT and business to make these recommendations with confidence and earn the trust of the department implementing the solutions.
Adaptability
Business analysts should have the ability to pivot and adjust their work in dynamic environments so they can keep up with the constantly evolving business landscape. If the industry they are working in undergoes regular changes, a business analyst needs to be able to provide quick solutions to keep up with evolving demand.
Business acumen
Business analysts should have a deep understanding of the industry, market trends and best practices related to their organization’s operations. This knowledge helps them to identify opportunities for growth and improvement.
The bottom line
Business analysts play an essential role in modern organizations. They possess the knowledge and skills needed to analyze complex data sets and turn their findings into easily digested reports for leadership. These professionals also listen to what the company wants to achieve and help those goals become a reality by pinpointing inefficiencies in processes and making recommendations on technological advancements that can help the organization move forward successfully. Any organization that wants to be competitive in their industry can benefit from the services of a business analyst.
