Tools and Techniques Used for Business Analytics - Essay Example

Table of Contents

Business Analytics Implementation Plan

Introduction

Business Analytics can be described as the review of organizational data through various statistical and analytical tools, creating predictive models to depict what the future might be, and exploring the optimal solutions in each business situation to maximize the organizational gains using the existing organizational data. The end result of Business Analysis is to help the management get quality information from the existing data so as to make organizational decisions. Through Business Analytics, organizations have been able to achieve their goals and objectives (Laursen and Thorlund, 2010).

According to many experts, the implementation of Business Analytics has resulted in improved profits, expanded market shares, growth in revenue, improved operations and better customer relationship management in organizations. By doing so, the companies have gained a competitive edge over their peers in the market. They have benefited from the information they deduced from the data they have. The information provided through Business Analysis help the managers make key organizational decisions responsible for the sustainability and growth of the firms in the market (Seddon, Constantinidis and Dod, 2012).

Implementation Plan

The Implementation Process

There are measures that an organization can take in the implementation of the Business Analytics. The first core step is to identify the business needs that the venture will seek to meet. Without stating the clear objectives, the whole exercise lies in jeopardy. There must clear and achievable objectives of the implementation. The top management needs to brainstorm and see ways in which the implementation of the Business Analytics platform will help the organization achieve their strategic objectives and enhance company growth. If the implementation does not fit in the business strategy, then it is bound to meet objections in its execution and be a waste of time and valuable resources.

The team formation is the next step. To implement the Business Analytics, each functional section of the organization need to support the process. There ought to be teams from the various departments such as IT, Marketing, Finance, Sales, and Human Resource Management acting in unison to achieve this noble purpose. Key members from the departments need to be identified to be specific points of contacts in their departments and compose the Business Analytics project implementation team.

The third key step that the company ought to take is to identify the metrics that need to be captured by the analytical solution. The team needs to agree on the tools and techniques that can best capture the metrics identified. The metrics to be monitored and reported should be drawn from the day to day operational processes in the organization. The solution will be used to give feedback on the operational efficiency and effectiveness of the existing processes and hence the metric need to be synchronized with the processes. The team needs to identify the key performance indicators that need to be reported by the system. The KPIs must be ones that drive growth and not the merely the conventional reports. The Business Analytics solutions will be updated from time to capture the KPIs required from time to time since the KPIs are dynamic with the business environment. Examples of metric that might need to be reported include response rates to various campaigns, the number of unique new consumers, the number of regular consumers, customer satisfaction indices and the number of issues resolved at first call, etc. With such information, the top management can see the performance of the organization through the insights presented from the data (Sharma, Reynolds, Scheepers, Seddon & Shanks, 2010).

The implementation team needs to identify the sources of the data that will be used for analysis. There are various sources of data and databases depending on which tool the functional departments use in their operational processes. For example, the Customer Care department has data captured by their Customer Relationship Management (CRM) tool. Some of the company’s data are stored in excel spreadsheets while others are kept in network drives. The unstructured data need to be cleaned and re-organized to be able to be used in statistical analysis. The other step would be to integrate the databases to access the data. The data storage points need to be accessed. By accessing the existing data, the solution to be implemented will be able to be tested and its ability projected. The next step would be to analyze the data and see the level of insight that can be derived from the analysis. The results of the analysis can be compared against benchmarks within the organization and the market at large. The trends and relationships derived from the analysis can be compared with the benchmarks to ensure that the tool performs well.

With all the above in place, the implementation team needs to identify the tools to be used. The tools need to be able to access the data from where it is stored in an extraction process or accept them as data feeds by the users, perform analysis on them and then report them in desired formats such as dashboards, graphs, and relationships, etc. The tool selected should be able to consolidate the data into a central system so that redundancy of the data to be avoided when performing the analytical operation. The solutions can either be conventional (traditional), open source, and software as a service (SaaS) tool.

Cleaning the data is also a key process in the implementation of the analysis solution. The insights received are as good as the data from which they are derived. The data has to be cleaned to ensure the quality of the information. The final step in the implementation is to test and refine the tool against the desired performance. The tool is put into actual working and compared against the expected objectives. Any deviations are rectified for optimal performance.

Tools and Techniques used for Business Analytics

There are a couple of tools and techniques that are employed in business analytics. Two examples of techniques that have been used in the analysis are SWOT and CATWOE analysis. The SWOT analysis looks at the organization’s strengths. The strength of an organization comprises the advantage that they have in the market compared to the competitors. The analysis presents to the management their unique abilities and advantages that they need to maximize on for growth and sustainability. The SWOT analysis also presents the weaknesses of the organization that may limit its plan to achieve the set objectives. The weakness observed from the analysis need to be countered and limited so as to ensure growth and profit optimization. The business analysis through SWOT also presents the opportunities that are available to the organization. The organization needs, therefore, to act with tact to benefit from the opportunities that are existent in the market. The final area that SWOT analysis presents are the threats to the organization. Mitigation and survival strategy ought to be drafted and adopted against the threats to ensure that the business survives in the competitive market.

The other type of analysis is CATWOE. The first area of analysis that CATWOE focuses on is the customer. The interest and issues around the customer are investigated with a view to achieving optimal customer satisfaction. The actors in the market are also analyzed in this technique. The business needs to know the people involved in the process to see their potential impact on the organizational success. The third area that this kind of analysis focuses on is the transformation process. The processes that are affected by the issue to be investigated or analyzed are identified, and strategies to streamline them are formulated. The world-view is the scope of this technique. It makes sure that the manager has a wider scope in the implementation of decisions. The final part of the analysis surrounds the owner of the process and the business environment. The environmental constraints to the business are analyzed and controlled (Cadle, Paul & Turner, 2010).

There are also several tools that can be used to carry out the analysis. They have different prices and vary in scope. The first and most common is MS Excel. The amount of analysis that MS Excel can do is tremendous. The implementation costs are low. Excel being part of the Microsoft Office suite makes it affordable for most small business. The users just need to have excellent MS skills to perform statistical analysis on the company’s data to get insights.

The most trending analytical tool in the market today is SAS. The general user interface of SAS is user convenient and comes with handy technical support. The final example of an analytical tool in the current industry setting is an open source tool called python. It is used to build statistical models and to test the various factors contributing to the success of an organization.

The table below is a Gantt-chart showing the activities in the implementation of the business analysis solution, the duration each may take, and the sequence of implementation.

S/No.

Task

Wk 1

Wk 2

Wk 3

Wk 4

Wk 5

Wk 6

Wk 7

Wk 8

1

Identify the business needs and objectives

2

Create the implementation team

3

Identify the metrics to be reported

4

Identify sources of data

5

Integrate the databases

6

Identify tools and techniques

7

Clean the data

8

Test and improve continually

Management Information Systems

Importance of MIS

Management Information System takes input from every functional department in the organization. This gives the advantage to functional heads to better understand the performance of their departments from the Business Analysis insights derived from the departmental data. The revenue report from the analytics will help each department to take necessary actions based on the results of the analysis and the overall organizational goals. The key importance of MIS is to enable informed decision-making. The MIS provides the facts, projections, and trends that the managers will need to inform their next course of action. The insights received from the analysis form part of the departmental review.

The MIS analytics enable accurate information to be desegregated to various members of the organization so as to achieve synchronized effort towards achieving the objectives in the organization. The MIS analytics carries in-depth financial analysis that will help the organization optimize its spending and minimize on wastes. Such optimized expenditure leads to increased profits for the organization. MIS leads to better customer analysis through the tracking of customer tastes, preferences, and trends (Gibson, Arnott, Jagielska & Melbourne, 2004).

There are four broad ways that analytical statistics interact with the organizational processes through Business Analysis. The first is descriptive business analysis. This kind of analysis explains why things are the way they are. From the data captured in the organization, descriptive analysis attempts to explain the various situations in the business. It describes the various phenomena taking place in the business and make the managers have a deeper understanding of the situation.

The next way is predictive business analysis. In this kind of analysis, the analytical tools and techniques help the managers understand what the future will be. The predictive analysis makes use of trends and relationships derived from the data presented. There are a number of trends that can be derived using statistical methods. Based on the past performance, the analytical tool helps the managers to be able to have a preview of the future. If the future does not present a good position, the managers can take measures to mitigate the crisis. The graphical presentations, lines of best fits and co-relations help create projections about the future. The various factors, independent and dependent variables, are investigated, and a possible future is projected based on the patterns observed in the past. The predictive analysis helps the managers properly plan for the future of the organization when used properly.

The diagnostic business analysis is the next way in which statistics interacts with the business. In this kind of analysis, the various factors and their effects on the desired output is studied. Based on the study, the manager is able to understand what causes the situation. The factors responsible for the output are evaluated and tested. With the understanding, the managers are able to manipulate desired outputs. This gives the managers control over their departments and organizations. The analysis may as well be prescriptive. The prescriptive business analysis evaluates the effects of various modifications made on various factors. This kind of analysis uses the various models to manipulate the results by changing the units of various related factors so as to choose the best combination of factors.

Business analysis helps in better customer management by getting as much insight about them as possible. In getting the insight, the analytical tool looks at the customers’ purchasing patterns, the combination of goods they buy and their general feedback. The analytical tools capture the views of the customer via social media and provide valuable information to the management for decision-making. The other way in which the analytical tools help in achieving excellent customer relationship management is by presenting the feedback to the management on the response time, and satisfaction rate on the calls made to the customer care department.

The Finance department also benefits from the business analysis since the various expenditures and financial projects can be evaluated based on their returns on investment. Based on the analysis, the finance manager can be able to make proper decisions on which investments to fund. The marketing department benefits from the business analysis by evaluating the effects of pricing of their products on the customer behavior and revenue. The analysis helps the sales team in customer targeting by performing various segmentation of the market for sales-targeting. Also, analytical tools are very important in helping the organization detect frauds in the system by looking at the trends in the system (Laursen & Thorlund, 2010).

The value of Business Analytics to the Organization

The cost of implementing a business analysis solution involves the cost of the software, the installation costs, and the customization costs where necessary, professional costs, training costs, and maintenance costs. These costs can be divided into two; capital expenditures, and operational expenditures. The capital expenditures are one-off are mainly the initial purchase costs of the software. The other service costs constitute the operational expenditures.

The costs above are then compared with the benefits in terms of profits that the tool is likely to bring to the organization. The overall costs for implementing the business analytics project ranges from $ 150 to $ 1,500 depending on the technology employed. The software used for business analytics differ greatly in terms of scope, functionality, costs and value proposition to the customer.

The returns that businesses get from implementing the analytical solutions vary from business to business depending on the size and the creativity in terms of decision-making. Most businesses implementing the solutions always meet the break-even costs of the solution within the first financial quarter. The operational costs of the technology are highly sustainable (LaValle, Hopkins, Lesser, Shockley & Kruschwitz, 2010).

Conclusion

In conclusion, business analytics uses various tools and techniques to transform the data that exists within the organizations to come up with meaningful insight that managers can act upon. The Business Analytics helps in supporting managerial decision-making. The solution goes beyond the traditional reports that were captured by the organization and results in a competitive advantage to the implementing organizations. The implementation of Business Analytics in an organization is a cost effective venture. The cost of implementing Business Analytics solution is far much less compared to the total accrued benefits that an organization derives from the solution. There are various tools that meet the financial might of the various organizations from small businesses to multinational corporates. The solution can help streamline the operations of the organization in every functional area thereby resulting in operational efficiency. The success of the organization does not solely depend on the solution implemented but on the quality of decisions made by the managers from the insights provided.