Why Analytics Are the Most Important Thing For Modern Businesses

High-quality data is inarguably one of the most important assets for any modern business, and it’s easy to see why. In an ever-increasingly competitive landscape, analytics can provide a business with valuable insights into customer behavior and market trends, which can be synthesized by managers and executives to help them make higher-quality decisions about how to best allocate company resources.

With the right data-driven strategies in place, businesses of all sizes can gain a better understanding of their own operations and the world around them, and use this knowledge to improve products and optimize business processes. If analytics is something you’re interested in pursuing a career in, a prestigious degree like the RMIT business analytics graduate certificate might be right for you; if you’d rather learn the basics first, then read on!

Any successful business in today’s fast-paced world needs access to real-time information on marketing and sales performance that will allow them to take decisive action. This is where analytics come into play: by gathering information relevant to key performance indicators such as click-through rates, cost per engagement, or revenue per click, a company can gauge which marketing and sales strategies are driving customer engagement, which types of engagement are leading to sales, and which types of promotion are failing and should be discontinued.

With these tools comes not only the ability to track KPIs, but the ability to determine demographic information about customers. Analytics can help segment customers according to various criteria like location, age, or common interests, and then target specific audiences with tailored campaigns designed specifically around those demographics. This more detailed information allows marketing departments to better understand who their audience is and how they interact with the brand. This kind of insight can help inform marketing strategies, or even the product design process itself, to ensure that what the company delivers will meet customers’ needs and expectations.

Analytics also provides valuable insights into customer behavior which helps businesses identify potential opportunities for growth – if a certain product category has seen an uptick in popularity recently, that’s usually a good signal to invest resources into expanding this area of business in order to exploit trends in demand. By tracking such data over time, companies can go beyond understanding what is or isn’t working in the moment to extrapolate medium and long term trends in the evolution of demand, allowing them to make smarter decisions about where they allocate resources for future products, and determine the direction their brand should evolve in. This long-term insight can help a company evolve continuously, and improve the reliability of the return on investment they are capable of producing.

Sales and marketing aren’t the only parts of a business that need good data, either. Analytics tools allow businesses to identify problems before they rear their ugly heads, which limits waste by either eliminating unnecessary activities or reducing costly mistakes – preventing a spill is usually cheaper than cleaning up the mess. That’s what famous investor Michael Burry figured out before everyone else during the financial crisis – by paying close attention to really granular data about the performance of subprime mortgages, Burry got ahead of the curve and beat the rest of the market to the conclusion that mortgage-backed securities were frequently overvalued.

It’s important for any company that produces a physical product to monitor for manufacturing defects, and determine which assembly process, material, or component they are originating from. Likewise, software companies need to constantly track multiple metrics related to the performance of their products to ensure a uniform customer experience and head off inefficient or defective code before they cause damage to user experience or company resources.

Information about external processes can be just as important as internal ones. Managing supply chains properly requires constant monitoring of market conditions, ensuring that company resources are maximized, defects are minimized, and expenses on intermediary materials and components are reduced. Understanding simultaneous pricing data from multiple suppliers, and tracking that data in real time, can be vital to reducing costs, especially in large scale manufacturing operations.

Monitoring quality is just as important as checking prices, or maybe even more so. Making reliable products requires good data – and sometimes that data needs to be extrapolated. Being able to compare the relative performance of components or materials from multiple sources is vital to ensuring that the correct balance is struck between performance, reliability, and cost-effectiveness. This is just one reason that serializing products is so important: if multiple sources are utilized for one component, it’s good to know which one is performing better! Paying close attention to sourcing is exactly how Apple chose TSMC over Samsung as the supplier for the majority of its processors: by serializing its handsets, monitoring defect rates, and compiling data about performance, Apple was able to conclude that chips made by TSMC performed better and were more reliable, leading Apple to choose TSMC as its primary supplier for the most important component in its product.

There are so many more places in any business where data can help improve products and performance. Every aspect of a business that can be measured is an aspect that can be optimized, and that optimization nearly always leads to reduced costs or increased profits. It’s almost impossible to overestimate the importance of analytics in helping businesses run more smoothly and produce things that are more and more useful to people – the more we know, the more we can improve, and the better we can make people’s lives by producing useful, high-quality products!