A company relies on revenue and profits as key metrics to evaluate its financial well-being. A company with healthy finances can attract investors, expand its operations, and pursue other avenues for growth. Business analytics tools are a crucial component that can assist entrepreneurs in boosting their profits.
What Are Business Analytics Tools?
Business analytics tools are software designed to extract data from various business systems, and then combine them into a repository or storage, such as a data warehouse or data mart, for review and analysis. Most companies use multiple analytics tools, including spreadsheets with statistical functions, data mining, and predictive modeling.
All these tools are utilized to generate vital information regarding a comprehensive company overview, starting from business operations, consumer behavior, conversion rate, and more. Entrepreneurs use this information to make informed business decisions.
How does Business Analytics Enhance Profitability?
A 2013 report by Bain revealed that companies utilizing analytical techniques were two times more likely to be in the top quartile of financial performance and five times more likely to make quicker decisions.
Analytics can assist companies in identifying areas for cost reduction or profit increase. Business analytics can improve company earnings in the following ways:
Driving Customer Retention
Entrepreneurs can leverage business analytics to gain insights into the concerns of their consumers. These insights can be derived from consumer responses collected through surveys or by analyzing comments on social media platforms such as Facebook and Instagram. For instance, by analyzing survey results or comments, businesses can discover that consumers are not showing much interest in new products or that an advertising campaign is being perceived as unpleasant.
Based on these insights, businesses can make necessary changes in their strategies to enhance revenue.
Interpreting Sales Cycles
Business analytics is a powerful tool that enables companies to make informed decisions. For example, a clothing store may know that sales are likely to drop during winter or summer, but they may not be sure about the best course of action. Should they increase production during those periods to attract more customers, or reduce production and continue selling the remaining products?
Through diagnostic analytics, business professionals can determine whether or not consumers are indeed shopping during that period. The next stage, descriptive analytics, can help illustrate the reasons why consumers are shopping or not shopping during that time. Predictive analytics can estimate the potential outcomes of certain actions, such as increasing production, and help the store make better-informed decisions.
Lastly, prescriptive analytics recommends the best strategies or steps to take to increase production, allowing businesses to act with confidence and make the most of their resources.
Determining Strategies to Streamline Supply Chain Procedures
Businesses can utilize business analytics to streamline their supply chain procedures. For example, diagnostic analytics can determine the level of losses, descriptive analytics can identify the reasons for the failures, and predictive analytics can demonstrate the potential gains that come with having more employees and tools, which can then be compared.
Unlock the power of business analytics with LOKASI Intelligence
Business analytics is a crucial aspect of improving a company’s profitability. It allows decision-makers to gain deep insights into their business operations by utilizing existing data. To aid their operations, businesses can leverage LOKASI Intelligence, a geospatial analytics platform that provides insights into market trends, customer behavior, and operational efficiency. By optimizing their strategies and identifying new opportunities through LOKASI Intelligence, companies can make more precise, data-driven decisions.
Learn more about how LOKASI Intelligence can assist businesses by contacting email@example.com or WhatsApp: 087779077750.
How do analytics applications work?
Business analytics tools and other analytics applications assist businesses in making decisions based on data.
What are business analytics tools?
Business analytics is used to extract data from different business systems. The extracted data is then combined into a storage system, such as a data warehouse or data mart, for the purpose of analysis and review.
What are the four types of business analytics?
The four types of business analytics are diagnostic analytics, descriptive analytics, predictive analytics, and prescriptive analytics.