It’s been said that knowledge is power, and thanks to the proliferation of the internet and other digital technologies, knowledge — in the form of digital information — is becoming more valuable than ever before. Businesses in particular are discovering just how valuable information can be. Demographic data, server logs, clickstream data, survey responses, organizational numbers, and other sources of information have become the lifeblood of successful businesses, informing decisions and helping to better target campaigns across the board. But in order for organizations to be able to effectively use available data, they need to rely on business analytics.
In a broad sense, business analytics is any attempt to evaluate business data. More specifically, it is the exploration of an organization’s data with the intent to perform statistical analysis as a means of improving various business aspects.
While there is a certain amount of overlap between the concepts of business analytics and business intelligence, the two are not strictly the same thing. Business intelligence (BI) focuses more on using specific, consistent metrics to evaluate past performance. The conclusions generated by business intelligence can then be used to help guide future business decisions. Advanced BI software is often utilized for business intelligence. Business analytics, on the other hand, uses a wider range of metrics, and is much more focused on what is going to happen instead of what has already happened.
Generally speaking, business analytics also embraces more complex processes and algorithms, for a broader set of applications in business. And given that spending on business analytics software services is expected to reach at least $101.9 billion in 2019, it is apparent that businesses are coming to see the value in advanced analytics tools. But when it comes to business analytics tools, recognizing value and understanding capabilities are two separate things.
Defined loosely, business analytics tools are any applications or software solutions that help a business review and analyze their progress and address any problems. Given that definition, business analytics tools can refer to anything from data-mining tools to collaboration software.
In terms of basic functionality, all business analytics software is designed to be able to collect, review, and extrapolate data. Beyond that, however, every business analytics tool will likely offer different specific capabilities. Some business analytics software may be useful for organizing inventory, including assisting in determining the most effective times for new product launches. Others may be more focused on quantifying market influences in order to spot emerging trends or potential future threats. Still other business analytics programs might excel at monitoring competitor data, helping organizations to gain or maintain a competitive advantage. Understanding an organization’s unique needs is the first step toward identifying the right business analytics software tools.
The best business analytics tools are the ones that help your business thrive. In reality, analytical tools for business cover a wide range of areas and have varying use cases. As such, an analyst at one company might determine that they need insights from certain intelligence tools, while an analyst at another company might tell management they need to pour resources into a different set of analytics tools. The point is that each company must decide which business analytic tools will be best for their specific industry, current budget, and general situation. Whether it’s BI software or advanced data analytics tools, every company has unique needs and seeks differing insights.
What are some of the different types of business analytics tools? Below is a brief list. There are business analytics tools for:
While most tools will feature data-mining capabilities to some extent, choosing a tool that excels at data mining can be a real boon to a business. Data mining that drills down deep into all available data, and summarizes findings for quick and easy reporting, helps to save hours of effort, and significant costs associated with misunderstanding and miscommunication. Proper data mining allows for information to be filtered according to many different various metrics, such as date, location, costs, and so on.
Unless a business only has one employee, there’s a good chance that any campaign, sale, initiative, or any other business-related action is going to involve the collaboration of multiple employees or departments. For an analytics software solution to be truly effective, it should promote efficient collaboration between multiple users by providing a platform that can be easily accessed across multiple devices
, and that can be operated by users of all levels of technological training.
As powerful and as versatile as a business analytics tool may be, if it can’t accurately present its findings to users in a way that is easy to comprehend, then it isn’t much use to anyone. Users shouldn’t have to comb through the same data as the analytics software just to see results, and they shouldn’t need a degree in computer science to decipher the reports it generates. As such, the ability of a business analytics tool to employ effective data visualization is one of the most valuable features to consider.
It’s one thing to be able to analyze and report on massive amounts of data, but for a tool to really set itself apart, it needs to be able to take the next step — intelligently appraising that data. A good business analytics software solution will be able to look at raw data and use it to not only predict the likelihood of future business events, but also offer informed suggestions regarding what actions the business should take moving forward.
An analytics solution that is based in the cloud provides certain advantages over onsite solutions. Cloud-based analytics can be accessed at any time, from any authorized device or platform, allowing for quicker connectivity and improved collaboration, all without the need for any expensive hardware installation. This is often accomplished through the use of paid subscriptions, known as software as a service (SaaS). The SaaS industry is massive, and it’s growing. In fact, one study predicts that the SaaS market will grow at a compound annual growth rate (CAGR) of 21.2% from 2018 through 2023.
To the untrained eye, most business analytics tools may appear fairly similar, and in many ways, they are. However, the subtle differences inherent in these tools can have a significant impact on their effectiveness for specific organizations. Researching potential solutions, by taking advantage of free trial periods, can help businesses feel secure with their choices before committing.
After all, data is the lifeblood of the successful business, and analyzing the tools that will be used to analyze that data is one way to ensure that a company remains healthy and viable for years to come.