The art of collecting, processing and analyzing data is reshaping the way decisions are made, resources are allocated, and growth strategies are developed. We are in an age of abundant information, but how can we utilize our own data to maximize growth?
At its foundation, data analytics is the examination of raw data to draw meaningful insights and conclusions. By leveraging new tools and capabilities, businesses can transform large datasets into digestible information, which, in turn, enables informed decision-making.
Every business, whether they are aware of it or not, generates and stores a vast amount of data. The key lies not just in gathering this data, but in understanding the patterns, trends and anomalies within. Business intelligence (BI) tools and other software use visuals like graphs, charts and tables to make the data easy to read and understand. The real power comes from truly comprehending and applying these new insights to configure the best course of action.
Here are several ways that data analytics can impact a business:
Making informed decisions: The more information business executives have at their fingertips, the better equipped they are to make decisions. Data analytics helps leaders base their decisions on facts, figures and trends, rather than just gut feelings or intuition. This allows a business to take more calculated risks, make unbiased decisions and generate better outcomes.
Tracking performance: It’s said that what gets measured gets managed. Data analytics provides real-time performance tracking, which allows decision-makers to stay ahead of any shortcomings before they become failures and make the adjustments needed to reach their goals.
Optimizing operations: Analytics can help identify bottlenecks in operations or areas where resources are being wasted. By pinpointing inefficiencies with more clarity, businesses can streamline their processes, saving both time and money.
Forecasting trends: With the combination of historical data analysis, statistical modeling and scenario analysis, businesses can better prepare for the road ahead. Analytics won’t tell the future, but it can ease uncertainty by analyzing various scenarios based on what is likely to happen or what is required to happen to reach established goals.
Starting a data analytics journey may seem daunting, but when approached with the right mindset and tools, it provides opportunities to transform a business and create growth. Two important steps include:
Making the investment. While having the right data tools is crucial, understanding data effectively is just as important. Invest in a data analytics team, hire outsourced data analysts or pursue training to ensure the maximum value from any data analytics efforts.
Creating the culture. Encourage a culture of sharing data analytics tools and findings across teams. This cross-pollination of information can lead to unexpected and innovative solutions to business challenges.
By understanding the nuances of a company’s data, leaders can position the business to navigate challenges, seize opportunities and make decisions with clarity and confidence. Those who harness the power of data analytics will inevitably reach their full potential.
About the Author: Ryan Warnet, CPA, MSA, is a data analyst at FourZeroNine Solutions, Inc. He is a member of the NJCPA and can be reached at firstname.lastname@example.org.
To access more business news, visit NJB News Now.Related Articles: