According to an article in InfoWorld, the definition of data analytics is the collection of information for the specific goal of creating actionable insights for business. Data analytics allow companies to process information in a real-time manner and make decisions accordingly.
Companies should align data analytics to provide concrete guidance when making decisions, meaning that business managers need to find data analytic software that is cost effective and industry specific for the best results.
When considering a data analysis plan, companies need to figure out the primary objectives for acquiring, storing and using the data. For example, consider the following:
1. What is the potential value in the information?
2. How will the company act upon the information it finds?
3. How will the company use the information to address problems?
4. How can we improve upon our daily operations using the data?
Other than specific business objectives, there are three primary areas where aligning a data analysis program with business decisions can be beneficial:
1. Reduce Risk
The information provided by data analytics allows companies to see areas of potential risk in terms of inventory, profit or loss thanks to trend identification.
2. Find Fraud
Using traditional accounting and data mining techniques, companies may not be able to identify potential fraud quickly. However, data analytics show gaps or trends that raise red flags and allow companies to act immediately upon the possible risk.
3. Realize Revenue
Another way that data analytics can benefit a company is by helping find new or increased avenues for revenue. For example, if a client purchases a certain amount of a product at certain times of a year, companies can proactively offer a discount during that time, or speak to the customer about supplies during other periods.
Data Analysis Software
Here are some components to look for in a data analysis tool:
– Information platform that may be accessed by various users, all of whom have different levels of access to the data
– Automatic report generation
– Allows managers to create models and reports for different departments and types of information
– Data security and storage
– Data prediction with a wide range of values
– Analysis of historical data with the ability to make predictions for future results or behavior
When companies begin aligning data analysis with their corporate decisions, it is important to use the information to maximize profits, reduce costs, identify possible fraud and create more opportunities for flexibility and control over business decisions.
Essentially, data analytics should help a company plan for success. If a data analytics program does not provide clear benefit, the program needs to be changed or altered until success is evident.
David G. Peterson is a business consultant and author of Handling the Remedy. He has extensive international experience managing projects and operations for large financial institutions. He has worked in North America, Europe, Middle East and Asia skillfully managing business and technical requirements, core systems enhancement and support, merger and acquisition integration's, business process reengineering, off-shoring and outsourcing.