In recent years, the use of business analytics has become widespread as more and more companies recognize the benefits of leveraging their data. The importance of business analytics in driving growth has led companies across a variety of industries to invest in analytics. According to the International Data Corporation (IDC), the industries that are investing most heavily in big data and analytics are the banking, manufacturing and professional services sectors, accounting for a third of all spending in 2021.
“As executives seek solutions to enable better, faster decisions, we’re seeing relatively healthy (big data and business analytics) spending across all industries,” said Jessica Goepfert, IDC’s vice president of customer insights and analysis. Using data to gain insights into “everything from internal business operations to the customer journey is top of mind” for many businesses.
Consequently, job growth in this sector is expected to be robust. The U.S. Bureau of Labor Statistics (BLS) projects that job opportunities for management analysts, which includes business analysts, are expected to grow by 14% over the next decade, adding nearly 100,000 jobs each year.
Master of Business Administration (MBA) and Master of Science in Analytics (MSA) degree programs are continuing to incorporate business analytics into their coursework. Today’s successful business leaders are also leveraging data analytics to gain a competitive edge.
Types of Business Analytics
There are four main types of business analytics companies can employ to better understand and grow their business.
- Descriptive analytics—is one of the most basic forms of analytics, providing insights on what has happened or is currently happening. Sales reports and social media engagement are examples of descriptive analytics.
- Predictive analytics—relies on tools like machine learning and artificial intelligence (AI) algorithms to project what will happen, such as how a product will sell or who will buy it.
- Prescriptive analytics—uses a variety of data points, such as available resources and past performance, to suggest a course of action or strategy to achieve a desired result.
- Diagnostic analytics—examines data to explain why something happened.
A company may use one or all of these forms of analytics, depending on what its goals are.
Why Analytics Is Important
Business analytics can help companies make better, more informed decisions and achieve a variety of goals. By leveraging data, businesses can:
- Better understand consumer behavior
- Gain insight into their competitors
- Identify market trends
- Measure accomplishments against goals
- Optimize operations
Business analytics has helped many companies navigate tough times, especially regarding the COVID-19 pandemic. According to a survey by business intelligence company Sisense, 50% of companies reported using analytics “more often” or “much more often,” during the pandemic. The increased use of analytics was even more pronounced among smaller companies.Helping organizations navigate through crises is just one of the many reasons why analytics is important to business. Data suggest companies that use analytics to their advantage are twice as likely to rank in the top quarter for financial performance, five times more likely to make timely decisions and three times more likely to execute their decisions and plans.
Future of Business Analytics
Big data and analytics will shape the business of the future in remarkable ways. Global spending on business analytics was projected to reach $215.7 billion in 2021, a 10% increase from 2020 according to the IDC. Furthermore, that number is expected to grow even more over the next five years as the world economy recovers from the COVID-19 pandemic.
Organizations and their leaders will depend on business analytics to cut operating costs, improve asset use, and increase the agility and reliability of their operations. Analytics will be key to delivering real-time performance insight, real-time logistics management and production quality analysis.
The emergence of AI and machine learning technology is key to the future of business analytics. This technology will allow companies to interpret and draw insights from massive datasets to gain a better understanding of their customers and overall operations. Additionally, advanced data visualization tools will make it easier for businesses to identify and communicate these insights, and allow everyone throughout the organization to understand them.
Big data used to merely be a buzzword, with futuristic-sounding connotations, but the future of business analytics and big data has arrived. Businesses that want to compete in the 21st century need to continue to embrace business analytics for their operations. They need to also equip their teams with individuals who have the requisite skills to help translate data into actionable intelligence.
Prepare for a Career in Business Analytics
Companies across virtually every industry are increasingly recognizing the importance of business analytics. As a result, analytics experts are in high demand for their ability to extract meaningful insights from data that inform strategic business decisions.
The Villanova University online Master of Science in Analytics program offers a comprehensive curriculum that addresses the entire continuum of business analytics, from data collection and analysis to implementation.
Learn more about how the program can help you develop the skills to become a business analytics leader.