Although a very broad term, analytics is a word people hear quite often in the business world. That is because analytics is extremely important to the future and survival of a company, yet many struggle to grasp what it is and its necessity.
What are Analytics?
Basically, analytics is the method of gathering insight by breaking down past performance and data so that an informative next step can be planned and taken. Think of analytics like watching your life play out in a crystal ball, and then seeing what you should do in the future. Analytics employs statistical and data models to investigate performance. Business intelligence, a similar analysis approach, uses metrics as well.
Why is Analytics Important?
In a nutshell, analytics is the catalyst in the decision-making process. It yields tangible results that can be reviewed. By quantifying what has happened in the past, analytics can uncover problems and provide ample solutions to those problems. This makes it an essential tool for management.
Most importantly, analytics plays a role in the budget of a business. If data shows performance problems in one division, a company may turn all of its concentration to that specific area. Or growing performance may be discovered in an operation, prompting an increase in funding for its continued advancement. In other words, analytics is more or less a business compass as well as a problem solver.
Tools for Analytics
The tools for formulating analytics are expansive in scope and range from the basic spreadsheet to data mining programs. Analytics resources have nearly all become software based, since they can store and calculate extensive sets of data to generate varying reports. Examples can be found by most software giants like Microsoft SQL Server Analysis Services, IBM Cognos, and Oracle Hyperion Solutions.
Problems With Analytics
The key to successful analytics is predicated on having the right data. This means a business needs not just lots of data, but lots of high-quality data. It poses a difficult problem in trying to deduce the quality of sets of data, and then incorporate that data with additional sets. Imagine yourself playing chess but not being entirely sure if the two rooks you have aren’t really just a pair of pawns.
The Future of Analytics
With advancements in technology sure to come in the future, there will also certainly be advancements in analytics. For one, analytics programs are sure to converge with the focus being on real-time results. Additionally, applications will provide more support and direction for the decision-making process, which could be seen as good and bad for business. Who really wants software offering advice?
When looking into analytics, the average person finds themselves with more questions than an online survey software poll. Following is a general primer for gaining a better understanding of analytics and how they can help you.
Analytics to many is a highly confusing practice, yet its usefulness cannot be questioned, as every business clamors to decide what to do next. After this crash course, what about analytics still baffles you most? Start a discussion with a post!