The Role of Data Analytics in Decision Making for Business Management 

The Role of Data Analytics in Decision Making for Business Management 

Business 3rd May, 2024 6 Mins Read

Data Analytics in Business Management is nothing new. Most of you know about it. But do you know how data analytics works?   

Experts say that data is the new oil. That must reflect the value that data holds. However, you must know that raw data is not of any use.   

Data analytics tools absorb, process, and project the data based on logic. Thus, we get data trends. These trends are invincible for making business decisions.   

However, it’s not as easy as it sounds. Many businesses don’t know the right tools to use. At the same time, some companies suffer from a lack of efficient data handlers.   

However, if you implement the right methodology, it will help you get past your competitors easily.   

Understanding Data Analytics  

In simple terms, data analytics is a methodology. This methodology is based on some common steps. These are:  

  • Creating data sets  
  • Running the data on any data analytics tool  
  • Developing data trends and/or insights in natural language  
  • Drawing a conclusion based on the data findings  

Most companies also use AI tools for Data Analytics in Business Management. As a result, the data analysis also makes strategic and operational choices for your business.   

About 97% of US-based companies invested in big data analytics in 2022. At the same time, 91% of companies in the US started using AI-powered data analytics tools in 2022. So, the message is clear. Data analytics is no longer a big fad of this century.   

If your business does not use data analytics, your chance of success is shallow.   

Why do you need Data Analytics in Business Management  

Data analytics have multiple uses in business. Other than making final decisions, it is used while making strategic decisions. So, exploring the main areas where data analytics can contribute is crucial.   

Data analytics helps with better decision-making. Experts say that the best advantage of data analytics is that it shows market trends that are not yet apparent. For example, a retail company can anticipate customers liking or rejecting it.   

Then, the retail company can use this information to optimize the products in its inventory. They can also redesign their product development strategy for the future.  

In any business, we need Data Analytics in Business Management. Companies mostly use it to learn about customer behavior. We use common data points like   

  • website visits,   
  • brand engagement on social media and   
  • purchase history   

These things help you to get a better understanding of how your target market is behaving.   

After that, you may use this info to update your marketing campaign. For example, if dog food sales are increasing in your store, you can introduce a flash sale on this product.   

Not only front-line, but back-end companies are using data analytics, too. For example, a spare parts manufacturing company will search for data on- what parts are bought the most.  

They will focus more on manufacturing those parts.   

Identifying impromptu customer needs  

You can analyze patterns of customer communication. First, you must track their behavior and interact with your brand. It tells a great deal about the needs and preferences of the customers.   

Take the example of an ecommerce company. Suppose eBay. eBay can track various customer data. They can search purchase history, website logins, and search queries to learn what customers are interested in.

That’s not all. eBay can also learn the most used payment methods and how people access their brand. They might log into eBay from the website or install the app.  

This data will benefit eBay in many ways. They can launch discount offers and promote the brand more. Experts say that you can also increase customer satisfaction in this way.  

I’ll give an example for better understanding. Suppose you were searching for “blazers” on eBay. After some time, you see a mail from eBay that says: “exclusive offers on branded blazers, only for you.”   

You will be excited, right? Anybody will be. This is how brands drive customer satisfaction. They scroll your search traffic to understand what you are searching for.   

You will likely buy the product if you get an incentive like a discount.   

Use data analytics to improve your marketing strategy  

Data analytics gives you better insights into your customers, rivals, and the industry’s status.   

Use these insights to make your marketing messages more relevant. For example, you can see how your social media campaign is going in real-time.   

Many parameters can be used to determine the rate of customer engagement. You can check:  

If your customers like to debate in the campaign, then raise intriguing topics for them to debate. If they like controversies, share unique insights to spark a discussion.  

Your end goal is to drive up the engagement rate of your social media campaign.   

Most American brands use Data Analytics in Business Management to streamline their target audience. Then, they use opportunities like Super Brand Days or black Friday sales and others to launch the best offers on select products.   

In the US, the baby boomers have the maximum purchasing power. So, when a brand sees that most customers from this group are searching for specific products, act immediately. Launch marketing materials that discuss how people can benefit by using the product.  

Keep in mind the use cases of baby boomers. Give personalized discounts to them or whatever strategy seems fitting to you.   

Be more efficient in daily operations 

Data analytics are not only for marketing and customer trends. You can also use Data Analytics in Business Management for day-to-day decision-making. You can create data sets based on internal surveys. Then, you can use data analytics algorithms to see important trends from the data sets.   

For example, you can see which section performs poorly in your company. Therefore, you can decide how to train the members of that team.   

In this way, you can increase the efficiency of your daily operations.   

34% of American companies use generative AI solutions. They can easily track their offices’ individual and group performance quality daily.   

Let me tell you that data analytics is not only limited to exposing trends like improvement or downfall in performance. It can also search the internet or use fuzzy logic to suggest how your performance can improve.   

The main challenges of data analytics  

High adoption rates do not mean that data analytics is seamless. There are some crucial challenges to using Data Analytics in Business Management.   

Poor data quality  

The stability of your data connection matters. Poor data connection can cause interruptions in data interpretation. Your algorithm might not be able to download the latest data. It will certainly impact on the quality of output.  

Inadequate data sets  

Experts say that data analytics algorithms detect patterns from the data sets we use as inputs. So, it’s our responsibility to provide ample data sets to the system. Only then will it be able to track patterns in the data precisely?   

High cost  

Start-ups suffer from the high cost of data analytics software. You must develop an ecosystem of purchased software licenses to use data analytics efficiently.  

However, small to mid-sized companies might have to spend around $10000 to $100000 annually for data analytics.   

Wrapping up…….  

Data analytics has various use cases in decision-making. You can use it to make daily operational decisions. It also makes vital decisions, such as setting a marketing or product launch strategy. In 2024, most US-based companies will have one or more use cases for data analytics in business management.   

The dependency on data analytics will only increase in the future. Soon, most strategic job roles will be done by AI components in data analytics. At the same time, Data collection and big data management will be important manual jobs.   

The kind of informed decisions you can make with data analytics are incomparable. Data analytics can assess large volumes of internal and market data every day. So, it helps you to stay ahead of competitors and make innovative decisions to disrupt the market.

tags

Business Management Data Analytics Decision Making

Ankita Tripathy loves to write about food and the Hallyu Wave in particular. During her free time, she enjoys looking at the sky or reading books while sipping a cup of hot coffee. Her favourite niches are food, music, lifestyle, travel, and Korean Pop music and drama.

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