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We are living in a data-driven world where data has become the strategic asset of any firm. With more sophisticated data collection methods and Internet of Things (IoT) on the rise, the amount of data produced is increasing by leaps and bounds. These data are proving to be valuable resources for firms, which are utilizing and analyzing it before undertaking any business decision. Initially, the cost associated with data analysis was the main reason why some businesses, especially small-scale ones, were reluctant to get into it. However, the benefits of analytics have become so widespread that it becomes imperative to adopt data analytics to survive in the long run.
Leading firms have already reaped multi-fold advantages from a strategic analysis of data. However, the potential implications of the analysis depend on how well the firms can utilize and leverage the benefits.
Data analytics can help businesses of any scale to grow in a variety of ways, such as follows.
With predictive insights obtained from analytics, future plans can be executed more strategically. Discernible market trends can be identified using models incorporating big data and corresponding business decisions can be implemented accordingly.
Operational efficiency and the ease with which a business runs is one of the key indicators of the potential of a business. Operational efficiency and management, in turn, depends on proper planning and execution of strategic plans. Data analytics helps to optimize resources by pinpointing areas where efficiency can be improved. It allows an organization to operate more flexibly and become more agile. As a result, businesses can make more informed decisions by weighing the risks and consequences. With more informed decision, risk-taking capability increases and with that, the ability for an organization to grow elevates.
Data analysis can identify areas that require improvements and thus, in turn, helps a business to run more efficiently. It identifies new business opportunities that may have been otherwise overlooked and remained unexplored, such as untapped customer segments or some demographic indicators.
It also helps in making smarter hiring choices by analyzing a candidate's profile to see how they fit the requirements. In doing so, the potential for growth and profitability increases.
Data analytics also helps to bring about significant cost advantages for companies by identifying weak performing units and planning more efficient use of resources. Moreover, with the advent of self-service analytics, the cost of implementing big data analytics is also deemed to go down steadily.
Marketing techniques have seen a pivotal shift since the introduction of social media. With social media analytics in the picture, companies are now able to understand the sentiments of their customers better. This has led to higher customer acquisition, retention, and better directed marketing strategies. New techniques like text analytics, sentiment analytics and understanding customer traffic data can bring out many insights about a potential customer.
It can also help in launching new products and services. Additionally, data analytics helps in product innovation and improvisation so that it can pertain to the customer's viewpoint. This, in turn, increases customer acquisition, retention, and has led to a more intimate relationship between customers and organizations
Big data helps to actively monitor & improve the brand reputation using social media presence. It also helps to manage the brand reputation and suggest suitable remedial measures.
Data analytics can help in major business decisions like planning the expansion of business units by analyzing data. There's generally a lot of information that lies idle with businesses concerning customer base, equipment or other asset maintenance, employee payment and delivery or distribution scheduling. Data analytics can analyze all these data and suggest suitable planning action to machinate proper business expansion plan. Insights derived can be represented via visualizations and dashboards so that top decision-makers can quickly make informed decisions.
It can mitigate the logistics challenge concerning shipping. Major e-commerce companies like Amazon has used data analytics to prevent major shipping breakdowns.
So, big data can effectively solve concerns related to any major operational inefficiency of a firm. However, the following points should be kept in mind in order to fully realize the advantages of data analytics.
With the proliferation of data from all sources, the quality of data should be assessed carefully before analyzing
• It's necessary to get organized and track the data strategically in order to not get lost.
• New methods and sophisticated techniques should be tried and analyzed to improve the processes.
• Appropriate data security measures should be implemented to prevent any data breach or attack.
Big data analytics has become a necessity for business growth. The opportunity cost of ignoring data analytics is too high in this data-driven age. However, in spite of its potential, according to IDC, only half a percent of the world data is being analyzed. A move towards a more analytics-oriented approach for firms can potentially open up new avenues of growth. So, there is a compelling need to incorporate analytics for every firm to stay competitive and grow steadily.
