Data Analytics and How It Can Help Your Business

It is not necessary to have an in-depth understanding of data analytics in order to gain value from them. Simply put, analytics is like having a detective available to help you put together a set of clues to reach conclusions. The clues come from the data that you would naturally gather while doing business. Using the data from your business for decision-making helps lessen risk and improve your outcomes. The major areas where most people commonly benefit from analytics are:

Improved Decision Making

Customer Satisfaction and Marketing

Operational Efficiency

Predictive Analytics

Of course this is not a comprehensive list, but you can gain a lot by reviewing these four categories and developing a feel for how you might apply your insights to other functional areas.

Improved Decision-Making

In any business environment, making decisions is a critical part of moving the business along. From small, off-the-cuff decisions to larger department-wide decisions, analytics creates the possibility for evidence-based decisions. By looking at similar situations from prior decisions, it may lead to a better understanding of how much resource to allocate, an estimation of the time it could take to complete the course of action and invite comparisons with past decisions. Making sure that analytics are a part of decision making will allow the company to improve over time by keeping a scorecard of decision outcomes.

Customer Satisfaction and Marketing

The area of customer satisfaction and marketing is a data-rich environment. Largely because there are so many variables that go into a successful marketing strategy. It helps if you can create a “map” of what elements to monitor that ensure customer satisfaction. Generally speaking most customers are looking for these four things:

• The product or service fulfills the value proposition as conveyed by your marketing strategy
• It is easy to use and doesn’t require multiple calls to tech support to install and operate
• The product or service is delivered and operational on the promised date
• The price is appropriate to the performance.

You can tailor this list as you see fit for your particular business. All of this information is generally available within most enterprises. Note that not every company needs to produce the highest performing, most expensive product to be successful. It depends on your market. Many customers are happy to trade off performance versus cost, for example, if it suits their needs. The important thing is that you make sure your value proposition is clear and then hit that target reliably. The further you stray, the less credibility you will have within your chosen market.

Analytics can really shine in helping to understand customers’ preferences and purchasing behaviors. Is there a seasonality to purchases; do they respond to discounts; or specific features? Are there “trigger’ words that work better in advertising; or special features that need to be highlighted? These are the sort of questions you can find the answers to through systematic analyses and experimentation. Even in the business world there are trends and key words associated with certain products that you shouldn’t ignore.

Operational Efficiency

Any modern manufacturing facility owes at least part of their processes monitoring to Deming’s principles of statistical analysis. By analyzing the results of each manufacturing step, the effects of each step will become evident. When it comes to process control, consistency is key. By analyzing operational data it may be possible to combine multiple steps, simplify certain processes or even justify the expense of automation.

Managing inventory is part of the operational efficiency as well as looking at lead times, WIP (Work In Process) and cost of inventory. Improvements in cash flow can be realized. It can also improve plant layout, process flow and ensure better utilization of resources.

Predictive Analytics

Predictive analytics can be strategically important to a lot of businesses. Nobody has a perfect crystal ball with which to predict the future, but there are several elements that effect the ability of a company to operate. A lot of these can be modeled based on past experience and provide a suggestion as to the potential effects. Here are some examples of information that may affect strategic decision making:

• The price of oil is very cyclical and it is influenced mostly by global, rather than regional variations.
• Interest rates can move up and down, tied to the timing of Federal Agency meetings.
• Taiwan is the largest producer of semiconductor chips in the world.
• The recent pandemic illustrated how businesses can move to a hybrid or even remote workforce and preserve productivity.

These are just a few “big picture” items which we have seen in the last couple of years (or longer) that lend themselves to producing models of how resources might need to change under changing conditions. Playing out scenarios on a regular basis can help your company be ready to weather whatever financial or geopolitical storm that might come your way.