Business analytics is an industry that’s changing our world.
You might not realise it, but business analytics is an industry that’s changing our world at a rapid rate. Not to be confused with data analytics, which requires more technical skills for data acquisition and analysis, business analytics focuses on modelling business problems and their solutions to unlock insights contained in data and communicating it in a meaningful way so that businesses can improve the way they operate – and this usually means a win for customers.
The methods used in business analytics have been around for decades, especially when you consider that it has evolved from areas like statistics and artificial intelligence. But Associate Professor Jacob Cybulski from the Deakin Business School’s Department of Information Systems and Business Analytics says the true benefit of business analytics has started to become particularly evident in the past 10 years.
‘Over recent years, businesses have accumulated a lot of data but not known what to do with it. Now there’s a range of business analytics tools that makes it possible to interpret data without needing expertise from scientists. You no longer need a lot of hardware or technology, or the ability to write lines of codes or do heavy mathematics to get something out of data. Now we can dream up things that have never been done before. It’s a very exciting area.’
Here, Assoc. Prof. Cybulski outlines three ways companies are using business analytics to add value for both themselves and their customers.
‘Marketing is a huge area impacted by business analytics. Nowadays marketers don’t need to spend millions of dollars buying advertising space on television because each one of us has a laptop or a smartphone. As we communicate and walk around and make purchases we leave traces behind and companies have access to this information. So they can look at your shopping habits (what you’re buying, when and from whom) and lifestyle patterns (for example, what time you go to bed, when you turn on the television etc.), and out of this they can come up with very direct advertising for you. A good example is Amazon. Once you’ve made a purchase from Amazon, they will then come up with recommendations for what to buy next, which are tailored for you based on your purchase history. So business analytics is giving companies the ability to create a service specifically for you, which is inferred from the traces you leave behind.’
‘Business analytics is used to predict people’s sentiment towards a product, person or company and how they will act towards it in the future. For example, people are constantly chatting on social media about a range of topics. Based on social media posts and people’s likes and dislikes of politicians, we could use business analytics to predict the outcome of the next election. A lot of companies are interested in people’s sentiment because, based on an expressed feeling or emotion, the business could predict a customer’s future course of action and do something to impact it. For example, if a company thinks a customer is going to drop its brand or change providers based on their social media footprint, the company can prevent losing the business through initiatives like offering special deals, lowering the prices, or providing a service to your family and friends.’
‘A really innovative example of business analytics has been seen in a collaboration between 20th Century Fox and IBM Research, which used the IBM data analytics tool Watson to develop a trailer for the science fiction horror movie Morgan. IBM Watson classified snippets of the movie as it was being produced and mapped it against other movies and trailers. It figured out which parts of the movie should be taken out and arranged into a trailer to create an intense emotional response. Not only did this produce a superior product, it significantly reduced the time it usually takes to make a movie trailer. You watch the trailer and think “this is really scary”, and it is scary because IBM Watson predicted it is likely to frighten you. It was an amazing project. It goes to show that analytics is quickly moving into areas you never thought it would be able to operate in or add value to.’
Originally published on this.