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Why Managers Should Understand Business Analytics

Each of the University of West Florida's four online MBA areas of emphasis includes a core course on business analytics focusing on development of quantitative and analytical skills required to model, analyze, interpret and solve managerial decision-making problems.

Understanding Business Analytics

What is business analytics, and why is this course so important for managers in all industries? Business analytics is an essential part of running any business, from the smallest retail startup to a multinational corporation. In short, business analytics is the analysis of the answers provided by business intelligence. Managerial and executive decision-making arises from this process, and in order to reach these decision-making positions in your career, you must understand business analytics.

According to Gartner Research, business analytics comprises "solutions used to build analysis models and simulations to create scenarios, understand realities and predict future states. Business analytics includes data mining, predictive analytics, applied analytics and statistics, and is delivered as an application suitable for a business user." Once collected, the data (along with analyses) are communicated to customers, business partners and business leaders for use in business planning.

Applications for Big Data

Data-driven companies use what is known as "big data" in a variety of ways to gain insights and achieve competitive advantages. These methods have grown increasingly sophisticated, as the volume of data itself continues to increases exponentially -- doubling every 18 months, according to ComputerWorld. Some forms of business analytics are:

  • Statistical and quantitative analysis to discover why certain results occur.
  • Data mining for patterns and relationships between bits of data.
  • Predictive modeling and analytics to forecast results from business plans.
  • Testing marketing and advertising campaigns to compare results.

For decades, insurance companies have used business analytics to estimate risk and develop actuarial models. Farmers have used business analytics to help them determine the ideal amounts of fertilizer, sun and water for each crop. Credit card companies and banks have used it to assess the risk levels of applicants. A major component of this financial data is the credit score and all of the data included in credit reports.

As big data has proliferated in every industry, more and more complex applications for using this data have emerged. For example, Ancestry.com maintains more than 11 million data records in order to detail its customers' ancestral origins and family trees. Mount Sinai Medical Center in New York uses big data to analyze the entire E. coli genome sequence in order to understand why some strains develop resistance to antibiotics. Utilities also make creative use of business analytics. Hydro One Networks, an Ontario electricity provider, uses geospatial and visual analytics to improve the performance of its systems.

These are just a few of the many examples of the ways to use business analytics. When you think about your own experiences as a consumer, you can imagine just how pervasive business analytics skills are in the best-performing organizations -- and how important developing this skill is for your career.

Learn more about UWF's online MBA program.


Sources:

NG Data: What Is Business Analytics

Business Blogs: The Importance of Business Analytics

Gartner IT Glossary: Business Analytics

ComputerWorld: 10 Intriguing Real-World Uses for Big Data

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