How do you effectively run a business? Data analytics can help with that!

Data analytics can be used to predict inventory needs. This could be an individual retail location or a warehouse trying to predict upcoming delivery requests.

Amazon and Walmart shipping centers are incredible examples of operational efficiency based on data analytics. Consider the race to same-day delivery! This requires the ability to predict customer demand for certain products by geographic location. Just-in-time inventory relies on powerful predictive analytics. “Fast fashion” is an example of inventory management that continually updates based on information about consumer preferences.

Human Resources is another interesting application of business analytics. Companies can use information about their employees to improve retention and help their employees thrive.

Business analytics can even transform management style. Much of traditional management is reactive in nature. Responding to events or challenges that arise from daily operations. Business strategy is forward-looking. By analyzing data, management can improve their ability to assess current operations and develop strategies for growing the business in the future. Analytics supports a more proactive style of management.

Management analytics applied to corporate profitability can often be categorized into two groups:

• increasing revenue
• lowering costs

As you learn about examples of management analytics, you should try to keep this grouping in mind. Does the example focus more on increasing revenue or lowering costs? Either approach will increase profitability, which is simply revenue minus cost.

For a corporation to be successful, it takes more than just a good product or service. It requires a continual process of evaluating what’s working and what’s not. Data provides the critical piece of information that helps boards of directors and managers at all levels to make fact-based decisions. Management is a key area that can benefit from informed decision-making.

Many companies use specific software to manage their data. This often falls in the area of Information Technology (IT) or Management Information Systems (MIS). You may also hear this referred to as Business Intelligence (BI). Examples of this are in the areas of Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM). ERP relates to business analytics because ERP is a system for integrating data usage across an enterprise. At the core of an ERP system is a shared database. Oracle and SAP are companies that provide ERP solutions and some people specialize in using Oracle and SAP for business analytics.