1

Assignment 8c The Role of Business Analytics

 2

Assignment 8c The Role of Business Analytics

In the current information age, where data drives decisions, businesses seek insights into

that data that can help improve their decision-making. Analytical methods are one means by

which this is done, being used in new and innovative ways to predict consumer behavior and

better manage the supply chain. Business analytics can be utilized as a source of guidance and

sound reasoning for decisions. By collecting, analyzing, and interpreting data, a business can

derive data-driven insights into multiple areas of operations, like marketing, finance, or human

resources. This paper will briefly touch on business analytics, why they are being used, and how

businesses use them to succeed.

Business Analytics

The most widely accepted definition of business analytics emphasizes using and

interpreting data to drive a business decision or possible action (Hindle et al., 2020). The

objective of analytics is, therefore, to provide relevant information to the business. Although

valid findings are valuable, business analytics is not a scientific process. It is not data analytics.

The critical difference is that business analysts interact with data to achieve business results,

while data analysts develop that data (Patel, 2020).

Business Analytics Trends

The dizzying array of technologies and data sources can confuse businesses and lead

them down a rabbit hole of wasted time and money. New technologies are being developed and

marketed continuously to tempt businesses into parting with resources on the promises of future

solutions. The latest trend is generative artificial intelligence (AI). Generative AI was

developed to take the heavy lifting of complex calculations and reporting and translate them into

comprehensive visualizations (Kaur, 2024). Although problems with the large-language modes
 3

(LLM) that generative AI is based on have plagued the industry, McKinsey (2023) reports that

the majority of companies will continue to invest in its promise.

Examples of How Business Analytics is Used

Business analytics can benefit any size organization. For instance, they can provide a

means for decision-makers to make better, or at least more informed, decisions about directing a

company. Through better data-driven decisions, companies can experience more significant

financial revenues and fine-tune processes for improved operational efficiency (Gavin, 2019a).

However, the analyst and the decision-maker must know business analytics’ pitfalls. Unclear

objectives, insufficient or poor-quality data, and biases can all lead to limitations or poor

decisions (LinkedIn, 2023). Below are short case studies on how organizations use business

analytics to their benefit.

Wal-Mart is drowning in their data

One of the largest retailers in the world, with hundreds of millions of customers visiting

both physical and, at the time, ten web stores, Walmart was awash in data it could not interpret

(Lobel, 2022). To resolve these issues, they chose to consolidate all online stores into a central

Hadoop cluster to serve as a foundation for data collection and analysis (2022). A Hadoop

cluster is essentially an unstructured database (Rowe, 2017). Moving to this solution allowed the

company decision-makers to visualize Walmart’s data to influence actions and retain a

competitive advantage (Lobel, 2022).

Delta Airlines has your bag

Delta is one of the major airline carriers in the United States and, like most companies,

struggles to remain competitive and distinguish itself from its competition. They used business

analytics to improve traveler experience through baggage handling (Lobel, 2022). A single
 4

missed bag can have a far-reaching business impact. To ensure they could track and improve

baggage handling, Delta invested millions in a business analytics system to track down the root

causes of baggage delays and mishandling (2022). Through business analytics, decisions can be

made quickly to reduce lost baggage and damage, thereby increasing customer retention.

Coca-Cola goes viral

Social media is a powerful marketing tool. It also provides much sought-after data for

organizations to use in business decisions and operations. Coca-Cola (Coke) utilizes the

activities of its millions of followers across multiple social media platforms to feed into its

business analytics platforms (Impact, 2023). The data allows Coke to gain insights into the

demographics of those consuming their products and identify and then capitalize on trends to

boost marketing campaigns and revenues (2023).

Types of Business Analytics

The four methods by which business data is analyzed, depending on the end goal, are

descriptive, diagnostic, predictive, and prescriptive (ProjectPro, 2024). The first method,

descriptive analytics, is used to interpret the historical data. Looking at past trends and patterns

can provide a bigger picture overview of the interaction between the customer and the business.

The next method, diagnostic analytics, analyses the company’s past performance. Drilling down

into the data allows correlations to be drawn between elements, and algorithms are developed to

understand the likelihood of events. Then, there is predictive analysis. A method that uses

forecasting and statistical models to look for specific outcomes. Machine and deep learning

strategies are heavily involved in modern predictive analysis to sort through data quickly and

make determinations. Finally, prescriptive analytics uses deep learning and neural networks to

consider past performance and guide decisions in similar situations.

 5

Blue Apron uses predictive analytics

Blue Apron’s core service is providing ready-to-eat meals to its customers. The company

presents its customers weekly with fixed meal choices for purchase and delivery (Gavin, 2019b).

Predictive analysts assist the company in forecasting demand for its meals. The company can

avoid spoilage and ensure it meets shifting customer tastes and demands by using predictive

algorithms to analyze data that fall into specific categories. The difference between actual and

predictive values is less than six percent, so predictive analytics has ensured that the company

stays profitable (2019b).

PepsiCo uses predictive analytics

One of the largest global food and beverage companies, PepsiCo, uses its ability to

collect big data and predictive analytics to ensure the right product is available to the right

customers. Through data collected from across their supply chain, the company can use their

cloud-based analytics platform, Pep Worx, to match products with customers and ensure that

product is placed in the most likely location where customers will shop (Gavin, 2019b). Using

predictive analytics allowed PepsiCo to have customers pull products rather than PepsiCo

pushing products onto customers through marketing.

Conclusion

Although there can be pitfalls to using business analytics that decision-makers need to be

aware of, the usefulness of data-driven decisions has proven more beneficial than not. Using

different analytical methods like description, diagnostic, predictive, and prescriptive, an

organization can improve its financial performance, fine-tune its operational efficiency, or

answer questions that decision-makers need at all levels of the organization. The beneficial

effects were demonstrated in just a few of the companies presented in this paper. Business
 6

analytics is valuable because it is a tool to drive decisions and actions and gain a competitive

advantage.
 7

References

Gavin, M. (2019, July 16). Business analytics: What it is & why it's important. Business

Insights Blog. https://online.hbs.edu/blog/post/importance-of-business-analytics

Gavin, M. (2019, January 15). Examples of business analytics in action | HBS online. Business

Insights Blog. https://online.hbs.edu/blog/post/business-analytics-examples

Hindle, G., Kunc, M., Mortensen, M., Oztekin, A., & Vidgen, R. (2020). Business analytics:

Defining the field and identifying a research agenda. European Journal of Operational

Research, 281(3), 483-490. https://doi.org/10.1016/j.ejor.2019.10.001

Impact. (2023, September 27). 5 must read business intelligence case studies for leaders. Impact

Networking | Managed Services for Business

Growth. https://www.impactmybiz.com/blog/5-must-read-business-intelligence-case-

studies/

Kaur, R. (2024, January 25). Future of business analytics trends in 2024 and beyond.

SelectHub. https://www.selecthub.com/business-analytics/business-analytics-trends/

LinkedIn. (2023, September 25). What are the most common data analytics project pitfalls and

how can you avoid them? https://www.linkedin.com/advice/1/what-most-common-data-

analytics-project-pitfalls

Lobel, G. (2022). 4 real world business intelligence (BI) examples [2022]. Toucan - Data

Storytelling for your customers. https://www.toucantoco.com/en/blog/business-

intelligence-examples

McKinsey. (2023, August 1). The state of AI in 2023: Generative AI’s breakout year. McKinsey

& Company. https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-

state-of-ai-in-2023-generative-AIs-breakout-year
 8

Patel, P. (2020, July 22). The difference between business analytics and data science. Naveen

Jindal School of Management - UT Dallas. https://jindal.utdallas.edu/blog/business-

analytics-vs-data-science/

ProjectPro. (2024, February 2). Unleashing the types of analytics: Categories and

applications. https://www.projectpro.io/article/types-of-analytics-descriptive-predictive-

prescriptive-analytics/209

Rowe, W. (2017, March 10). Hadoop clusters: An introduction. BMC

Blogs. https://www.bmc.com/blogs/hadoop-clusters/