Data analysis or ‘data science’ has become a much sought after skill, with large businesses pouring huge amounts of money into this area of expertise. It involves using data to make better business decisions – data that has only recently been made available through computer technology. Whilst you may not have the money or need to take on your own full-time data scientist, there are still many ways in which even the smallest of businesses can benefit through DIY analytics. Here are just a few areas in which analytics are being used in day-to-day business.
If you’ve got a business website or social media pages, you may be aware of in-built analytics tools. If not it may be worth trying out the Google Analytics plug-in or using Google Trends. Through graphs and stats, analytics tools can show you who is visiting your webpage, at which time they’re visiting and where on the internet they’ve arrived from. Other stats such as age, gender and nationality may be available that can be further used to gage an idea of who your audience are. Through this knowledge, you can then focus your marketing tactics more precisely. If young people between twenty and thirty are largely visiting your website during work hours, then you know to focus your marketing towards businesses with young workforces or within young trades.
Analytics has been long used by insurance companies and gambling companies to calculate risk. Insurance schemes and gambling odds can then be established to ensure the most cost effective route is taken.
Regular businesses may not have to deal with such high risks, but such software can still be useful for reporting and avoiding work task failures. Many companies invest in an infrastructure management system that can monitor progress and notify you when targets aren’t being met, allowing you to better plan your resources and avoid mistakes. Such software can also tell you when a campaign or strategy is going well, so that you can repeat it in the future, or alternatively when a strategy doesn’t go so well, so that you can avoid such an approach from that point onwards.
Financial advisors are making better use of analytics to help businesses manage their money more strategically. Financial analytics can help determine where you are overspending and where you might not be spending enough money. This is especially useful for businesses that have multiple departments, in which a certain amount of money is poured into each sector. Through analytics you may be able to assess from which departments you can make cuts and into which ones you can then spend more money.
In retail, such a method can be used to determine which stock is selling the most and which is getting dusty on the shelves. This will enable you to better manage your inventory. You may be able to see an item that sold well last summer, and then stock up on more of it for this year’s season.
In manufacturing meanwhile, analytics can be used to calculate the cost of waste. This will allow you to stock less raw materials or find the best way of efficiently recycling that waste.
There are also applications for analytics within the field of HR. Analytics can help determine which staff members are performing best and which aren’t, though sales figures or other measures of productivity. From this data you can then make decisions that may be able to better make use of your workforce. This could involve the distribution of workload or putting people in roles that you think they’d be better suited to as a result of their achievements and failures. In jobs with a varying salary, this data can also be used to determine the wage each person should be on. Someone that is performing exceptionally well may deserve a pay rise. Negotiating a paycut may be a little difficult, but if a staff member is constantly underperforming and you feel that given their wage they should be doing more, the hard data may present you with the basis to justify such a cut.
Analytics can also be used to more effectively come up with business goals and staff incentives. Using data, you may be able to present a realistic annual or monthly target for your staff to meet, as well as a sensible bonus that doesn’t overstretch your budgets but still spurs staff on.