At DecisionPath Consulting, we have advocated for nearly a decade that business intelligence – which encompasses business analytics – should be seen as a profit improvement tool and a potential source of competitive advantage. This article looks at the opportunities – and potential pitfalls – associated with investing in business analytics and also outlines steps you can take to avoid those pitfalls and optimize your investment in analytics.
Simply put, business analytics – or “analytics” for short – is a term for data-based applications of quantitative analysis methods in use in businesses for decades. In the mid-1980s, I read “Quantitative Methods in Management,” which was written in 1977. There are dozens of books that apply various quantitative analysis, operations research and discrete mathematics methods to specific business domains, ranging from sophisticated customer segmentations and predictions of customer lifetime value to demand forecasting and supply chain optimization. So the field of analytics, per se, is not new. Rather, tried and true quantitative analysis methods have been implemented as packaged software applications that can be leveraged to build a wide range of company-specific analytical applications that address common business challenges.
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