Where Does the Data for Business Analytics Come From?

From gathering customer insights to creating streamlined operational excellence, no business can compete in today’s marketplace without finely-parsed and up-to-date data. However, you may be wondering where the data for business analytics comes from. It’s a question with a complex answer.

Although there’s no one source of data for businesses, many companies increasingly rely on modern software tools such as customer-relationship management (CRM) and enterprise resource management (ERP) systems to track important data, such as sales trends, customer preferences and demographics. Other sources of information range from surveys taken by marketing teams to detailed market reports prepared by consultants to comprehensive digital analytics derived from a customer’s online presence.

Ultimately, companies collect data for business analytics from a variety of sources. Their choice of methods depends in large part on the business’s size, capabilities and the information being gathered.

Internal Data Sources Provide Detailed Business Insight

Companies create massive amounts of data each day through their regular operations. Businesses can track this information through internal data sources, such as CRM customer files, accounting systems and operational databases. Having access to data about employee performance, widget production rate, sales figures, expenses incurred and transportation delays enables decision-makers to make more informed, strategic choices that drive efficiency and results.

CRM Systems Track All Customer Interactions

The proliferation of CRM systems means that regardless of their size, businesses can store information about every single customer interaction, from communications to purchases and returns. In addition, they keep track of basic information about customers like age, shopping patterns and location.¹

Businesses find CRM systems helpful because they provide information such as which products are commonly sold together, when call volumes are highest and the top customer complaints. Sales, digital marketers and call center managers may use this information to create strategies that can help drive more sales or decrease call times.¹

Enterprise Resource Planning Systems Combine Operational Information

Businesses rely on ERP systems to collect data from across the company. By accessing cross-departmental data, companies can glean insights from multiple sources and prevent information silos. Businesses can then use their ERP systems to find potential savings by tracking processes such as the flow of money or employee productivity and collaboration.²

Transaction Databases Record Every Sale and Payment

Companies use transaction databases to keep detailed sales records. These powerful repositories track in-store and online purchases, including the time and method of sale, discounts, returns and subscriptions. Using transaction data to analyze sales is an excellent example of the relationship between statistics and business analytics. Successful companies use complex statistical methods to find trends, seasonal changes and customer buying habits.

Employee and HR Systems Measure Workforce Performance

Human resource departments gather information regarding employee performance, training, attendance, salary, time with the company, promotions, complaints and more. HR departments use this data for processes such as streamlining the hiring process, creating training modules, reducing employee turnover and increasing satisfaction and productivity.

Internal Surveys Gather Feedback From Employees and Customers

Companies use surveys to collect opinions and feedback directly. Employee engagement surveys can help management create a satisfying workplace culture, which can lead to reduced costly employee turnover. Meanwhile, customer satisfaction surveys keep businesses nimble and alert to any potential issues.

External Data Sources Expand Business Understanding

In addition to internal data, companies also rely on external data sources such as industry reports, government databases and social media analytics. These information sources can alert businesses to broader consumer tastes and trends.

Market and Industry Reports Provide Competitive Intelligence

Businesses rely on third-party intelligence firms to compile information about changes in the marketplace. Operating as consultants or research-focused organizations, these firms provide invaluable insights about industry performance, including trends in product growth and competitor analysis.

Social Media Platforms Reveal Customer Opinions and Trends

Users discussing a product on social media can provide word-of-mouth advertising or cautionary tales. A company keeping track of these conversations has unparalleled access to information about consumer buying habits and preferences, as well as unfiltered customer opinions.

Third-Party Data Providers Offer Specialized Information

Data companies collect and sell specialized datasets about consumers, businesses and markets. These providers offer demographic information, purchasing behavior data and lifestyle preferences. Companies like credit bureaus also provide financial information for risk assessment.³

Government Databases Offer Economic and Regulatory Information

Government agencies publish public data that helps companies understand economic trends, regulatory changes and market conditions that affect their business. For example, real estate companies use census data for development planning, while businesses in many industries use the Bureau of Labor Statistics for published employment and wage information.

IoT Devices and Sensors Generate Real-Time Operational Data

Internet of Things (IoT) devices and sensors produce continuous streams of data about equipment performance, environmental conditions and customer behavior. Smart manufacturing equipment monitors production quality. GPS devices track vehicle locations and delivery times. Retail sensors count customer traffic.⁴ Having access to this information in real time means an organization does not have to rely on outdated data.

Data-Collection Tools Bring Information Together

Companies use technical systems to collect, process and combine data from multiple sources. Some of these include application programming interfaces (APIs), data warehouses and cloud computing platforms. Tools like APIs and data warehouses allow for the seamless sharing of data in real time.

Data Quality Ensures Reliable Business Insights

Good business analytics requires high-quality data that is comprehensive and accurate. Having reliable data sources helps ensure that high-level decisions have the greatest impact. Poor-quality data can lead to waste, inefficiencies and inaccurate conclusions that can cost companies significant amounts of time and resources. Developing data governance policies allows companies to maintain data standards and ensure compliance with regulations.

With the growing amount of data and data-analysis tools at hand, businesses are in a better position than ever to create a successful future for themselves.

Power Smarter Business Decisions With Real-World Data Skills

Great analytics starts with great data—and knowing where to find it is the first step toward making smarter, faster business decisions. From internal operations to external market trends, understanding your data sources gives you the power to turn numbers into real insight.

William & Mary’s Online Master of Science in Business Analytics (MSBA) equips you with the knowledge and tools to source and interpret data with accuracy and purpose. You’ll gain hands-on experience with the data that drives today’s business world. Guided by industry-experienced faculty, you’ll be prepared to harness data from diverse environments and apply it confidently in real-world business scenarios.

To learn more about William & Mary’s Online MSBA, schedule a call with an admissions outreach advisor.