The Importance of Data Analytics in Today’s Business World
By James (Jiaqi) Wang, 23 July 2021
With the rapid development of big data and information technology, companies generate and collect a large amount of data in today's business activities. However, if the data is collected without analyzing it, it will not be useful for the company's operation. Thus, data analytics is very important for today's companies.
#1 Proactivity & Anticipating Needs
Companies are increasingly under competitive pressure to not only acquire customers but also understand their customers’ needs to be able to optimize customer experience and develop long- standing relationships. By sharing their data and allowing relaxed privacy in its use, customers expect companies to know them, form relevant interactions, and provide a seamless experience across all touch points. A case in point is that hotel giant Marriott group analyzes customer data and provides customized services when guests check into the hotels. Some guests prefer soft pillows, some prefer hard pillows, and some prefer to stay in a room further away from the elevator. These customized services can certainly increase guest satisfaction.
By analyzing customer data, companies can better anticipate their customers' needs and improve their services and products for them. However, the volume of this customer data is very large, so it is a challenge for companies to analyze it.
Source: Teradata
#2 Inform Business Decision-making
Firms can use data analytics to guide business decisions and minimize financial losses. Predictive analytics can suggest what could happen in response to changes to the business, and prescriptive analytics can indicate how the business should react to these changes. For instance, a business can model changes to pricing or product offerings to determine how those changes would affect customer demand. Changes to product offerings can be A/B tested to validate the hypotheses produced by such models. After collecting sales data on the changed products, enterprises can use data analytics tools to determine the success of the changes and visualize the results to help decision-makers choose whether to roll the changes out across the business.
To further support this argument, the Chinese EV startup Li Auto is a great example. In the past, Li Auto's Li One models have been available in 6-seat and 7-seat versions. In 2021, Li Auto analyzed the data and decided to offer only the 6-seat version of Li One in the future. This will reduce the company's costs and increase profitability.
Source: Stitch
#3 Focused and Targeted Campaigns
In the past, companies sometimes spent a lot of money without getting good results because the targeting of advertising and marketing was not precise enough. But now big data helps companies make a sophisticated analysis of customer trends. This analysis usually includes monitoring online purchases and observing point-of-sale transactions. These insights then allow companies to create successful, focused and targeted campaigns.
Source: Forbes
In summary, data analytics is very important to companies today and there is a need for talents in data analytics in a variety of different industries. This means that students who study data analytics have good career prospects. Here at IMC, we offer Graduate Certificate in Data Analytics. This course will not only provide you with the most cutting-edge academic knowledge, but will also make you more competitive in your future career.
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