Does Your IT Company Help You Understand Data Analytics?
The world as we know it will continue to become increasingly data-driven. As the role of technology continues to become multidimensional across various sectors, it’s generating large amounts of data that can yield crucial insights for your business.
But data collection needs to be supplemented with analysis to obtain decision-making insights. Analysis of data helps businesses make sense of the vast volumes of information for further growth and development.
That said, it is important that before partnering with an IT company, you ensure that they have the expertise to help you understand data analytics. In this post, we’ll walk you through what data analytics is and the benefits you can accrue from it.
What Is Data Analytics?
Data analytics refers to the science of understanding raw data to make informed conclusions about the information. It entails the processes, techniques, and tools of data analysis and management, including the gathering, organization, and storage of data. The main aim of data analytics is to leverage statistical analysis and technologies on data to discover trends and solve problems.
It draws from a wide range of disciplines, including statistics, mathematics, and computer programming, to analyze data in an effort to describe, forecast, and optimize performance. To ensure robust analysis, data analysis teams need to leverage various data management strategies, including data mining, data cleansing, data modeling, data transformation, and more.
Types of Data Analytics
There are four different types of data analytics, namely:
- Descriptive Analytics: This type of data analytics describes what has happened over a given duration. For instance, it could help you determine if sales have grown stronger in the last quarter or the number of views on your website has increased.
- Predictive Analytics: This helps you determine what could happen in the near term. How many models predict a hot summer this year? How were sales affected the last time we had a hot summer?
- Diagnostic Analytics: This type of data analytics focuses on what caused something to happen. It involves a wide range of data inputs and a bit of hypothesis. It tries to answer questions such as, “did the last market campaign affect sales? Did the weather change affect alcohol sales?”
- Prescriptive Analytics: It suggests a course of action. For instance, if the probability of the summer being hot is measured on an average of five weather models and is found to be 58%, you should stock more alcohol and add an evening shift to increase output.
Reasons Why Businesses Should Understand Data Analytics
The wide variety of data that businesses generate contains valuable insights, and data analytics acts as the key to unlocking them. Here are some of the benefits your business can get when you understand data analytics:
1. Personalization of Customer Experiences
Businesses usually collect customer data using several avenues, including e-commerce, physical retail, and social media. Analyzing this data can help you create comprehensive customer profiles, from where you can gain insights on customer behavior, which you can use to provide a more personalized experience.
Businesses can run behavioral analytics models on customer data to enhance customer experience. For instance, a business could run predictive analytics on e-commerce transaction data to identify products to recommend at checkout to increase sales.
2. Streamline Operations
Businesses can enhance their operational efficiency by leveraging data analytics. Collecting and analyzing data about supply chains can help you identify where production bottlenecks or delays originate and help predict where problems may arise in the future. Suppose a demand forecast shows that a given vendor won’t be able to handle the volume required for a specific period; you can supplement or replace this vendor to prevent production delays. Additionally, data analytics can help you determine the optimal supply for all your products based on factors such as seasonality and secular trends.
3. Make Informed Business Decisions
Data analytics can help guide business decisions. Predictive analytics can suggest what could happen in response to business changes, while prescriptive analytics can indicate how the business will react to these changes.
For example, a business can model changes to its products and offerings to determine how the changes might affect customer demand. You could use A/B testing to validate the hypothesis of the result of making product changes. You can visualize the results to help in your decision-making on whether to roll out the changes across your business.
4. Enhance Security
Today, instances of data breaches have become far too common. Businesses can use data analytics to diagnose the causes of past data breaches by processing and visualizing relevant data. For example, your IT department can utilize data analytics solutions to visualize and process their audit logs to identify where an attack originated and what caused it. This information can be useful in locating vulnerabilities and patching them.
IT departments can also employ statistical models to prevent future attacks. They can set the models to operate continuously with their alerting and monitoring systems so as to detect and flag anomalies so that your security team can take prompt action.
5. Mitigate Risks and Handle Setbacks
Businesses face numerous risks. They include employee or customer theft, employee safety, uncollected receivables, and legal liability. By using data analytics, businesses can understand risks and take measures to prevent them. For example, businesses can use statistical models to predict future events and therefore determine which risks they are likely to face in the future. Based on this information, they can take necessary measures to avert these risks.
Businesses can also use data analytics to minimize losses following a setback. Suppose a business overestimates the demand for a given product; it can use data analytics to determine the optimal price for a clearance sale to cut the inventory.
We Are an IT Company That Can Help You Understand Data Analytics
From the discussion above, it’s clear that in this age, data analytics is crucial for business success. It not only helps streamline your operations but also optimizes your bottom line.
Teamspring is more than a managed IT services company. We are IT consultants who understand network security performance and understand how businesses can use data to make informed decisions. Contact us today and let us help you use data analytics to grow your business.