In our modern, data-driven world, analytics play a crucial role in almost every business’s success. Analytics allow business owners to track their ROI, gain insight into their target audience, plan for the future and sharpen their decision-making. New analytical tools seem to pop up every week, and data security is at the forefront of many business plans.
So how exactly do analytics work? We’ll cover a few practical industry applications for business analytics below.
Here’s the key takeaway: Data analytics is used in every industry to improve a businesses’ performance. A thorough understanding of business analytics can set you up for a successful career in data analysis, management, marketing and more.
What Is Business Analytics?
Business analytics helps solve problems through complex data analysis.1 Taking raw data, sometimes from multiple data sources, business analysts can identify trends, spot inefficiencies and devise an action plan. Using statistical analysis, data modeling and other data-driven tools, businesses can make informed decisions and troubleshoot their issues.
Business analytics and data analytics are closely intertwined. Both involve data mining, organization, cleaning, analysis, visualization and reporting. Business analytics, however, is solely focused on business data and outcomes, whereas data analytics can be applied to any practice, industry or subject matter.
In practice, business analytics might help with:
- Examining market demand to plan for future investments
- Identifying wasted time or costs in your business model
- Examining customers’ behaviors and preferences
- Tracking the effectiveness of a marketing campaign
- Data visualization to share with stakeholders
Business analytics are used by major brands to inform their decision-making. But it isn’t just for large corporations—around 70% of small businesses spend $10,000 per year or more on various analytic tools.2 From healthcare facilities, to clothing stores, to government agencies, business and data analytics can help almost any organization.
Industry Applications of Business Analytics
While business analytics are used across industries, the methods and applications will look different from one business to another. For example, healthcare analytics may be focused on improving the patient flow and advancing treatments. Marketing analytics, on the other hand, looks into consumer habits and trends.
Check out a few real-world examples of business analytics used by different industries.
In the healthcare industry, analytics help improve patient care. Because the healthcare sector produces so much data—patient records, prescriptions and more—hospitals and research centers must be equipped for complex data analysis.3 Most of this is collected through electronic health records (EHR) platforms and includes personal, insurance and pharmacy data for millions of people.
Healthcare organizations might use business analytics to:4
- Improve patient outcomes: By tracking the effectiveness of new treatment methods, healthcare providers can improve their treatment plans
- Improve efficiency: Businesses can use data to predict the busiest times for patient intake and schedule their staff and manage medical supplies accordingly
- Improve the claims filing process: Insurance claims analysis can streamline the filing process and help providers with fraud detection
Financial analytics is used to predict financial trends and identify investment opportunities. Experts in financial analytics might work with fund managers or as corporate accountants. There are two main types of financial analysis: fundamental analysis and technical analysis.5
Fundamental analysis looks into financial statements to determine a company’s overall value. This can help someone decide whether the business would be a smart investment. Technical analysis examines trends in the market to predict future changes to a business’s value, often called predictive data analytics. Both of these methods help finance professionals make well-informed investments.
Business owners use retail analytics to predict demand, measure customer loyalty and even optimize their store layout.6 This can be helpful in improving decision-making and reducing risk.
For example, consider an apparel store owner who is debating whether to invest in a second line of hats. They might hire a professional data analyst to look into retail trends, their customer base, general hat pricing and other factors. The analyst can then tell the owner whether adding more hats to their inventory would be a smart choice or an ill-advised gamble.
E-commerce analytics is similar to retail analytics, but it’s specifically geared toward online businesses. Whatever network traffic a site produces will also produce real time data that can be used to improve user experience, product design and much more. Some metrics e-commerce business owners might use include:7
- Returning visitors: The number of visitors who return to your site after an initial visit may indicate whether your web design and marketing efforts are effective
- Customer lifetime value: This measures the value you’ll gain from a repeat customer and can help you decide whether you should prioritize new customer acquisition or retention
- Bounce rate: A high bounce rate indicates that customers are leaving your website immediately, without browsing, which could mean you have a poor web design
Today, nearly all marketing agencies and in-house marketing teams use some form of analytics. Marketing analytics helps business owners gain insight into their customers’ preferences and track the effectiveness of their marketing campaigns.
Most brands have a social media presence, and these analytics can measure customer engagement across platforms, trends and leads generated through social media. Marketing analytics also examine website traffic and other metrics to identify smart marketing tactics.
Understanding Business Analytics
No one can be an expert in all forms of analytics. However, depending on your career path, you should be familiar with the key metrics and tools used in your industry. Supply-chain analytics, economic trends, customer engagement and other metrics affect all kinds of businesses, and you should know how to use them to drive better decision-making.
Fortunately, these data sets are easier to understand today than ever before. Analytic tools automatically record and analyze data to provide clear results. Common analytics tools include Google Analytics, Power BI and Tableau. With the right software and education, small-business owners can even handle their own business analytics without bringing in a professional data team.
But with all of this big data and sensitive information, data security is more important than ever before. That's why business analysts need to work closely with cybersecurity professionals to make sure their processes of collecting data and organizing it follow the proper protocol. Healthcare data analytics, for example, contains highly personal information: addresses, family history, medical records, etc. Preserving and protecting that data requires highly-trained professionals.
Get Ahead of the Competition With an Advanced Degree
Business analytics isn’t going anywhere. As analytics become an increasingly integral part of every business’ operations, education is the best way to get ahead. The Online Master of Science in Business Analytics program from William & Mary will teach you how to use business analytics in real-world situations. An expert understanding of analytics will help you stand out in the job market and kick-start your career.
Talk with an admissions outreach advisor today to learn more about an online degree that will prepare you for a successful career path.
- Retrieved on September 15, 2023, from https://www.techtarget.com/searchbusinessanalytics/definition/business-analytics-BA
- Retrieved on September 15, 2023, from simplilearn.com/types-of-business-analytics-tools-examples-jobs-article
- Retrieved on September 15, 2023, from journalofbigdata.springeropen.com/articles/10.1186/s40537-019-0217-0
- Retrieved on September 15, 2023, from illinois.touro.edu/news/applications-and-examples-of-big-data-in-healthcare.php
- Retrieved on September 15, 2023, from investopedia.com/terms/f/financial-analysis.asp
- Retrieved on September 15, 2023, from oracle.com/retail/what-is-retail-analytics/
- Retrieved on September 15, 2023, from shopify.com/blog/marketing-analytics