Basic Overview of Business Data Analysis

Written by Max | Edited by Rory Hart
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    Business Data Analysis

    © Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.

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    What is Business Data Analysis?

    Business data analysis includes the activities to help managers make strategic decisions, achieve major goals and solve complex problems, by collecting, analyzing, and reporting the most useful information relevant to managers’ needs. Information could be about the causes of the current situation, the most likely trends to occur, and what should be done as a result.

    Activities can include identifying and verifying potential strategies and solutions and testing the feasibility of the most favored solutions. The analysis is based, as much as possible, on relevant, accurate, and reliable information, often involving interactive and automated statistical analysis — or data analysis. This analysis in business is often referred to as business analytics. Also, read:

    What is a Business Analyst?

    People who specialize in business analytics are often referred to as business analysts. Business analysts are in high demand because business decisions are more complex today than ever, and analysts help ensure those decisions are based on the most accurate, valid, and reliable information.

    Analysts are experts at data analytics, especially in the fields of business. Analysts understand the major processes used in business, and how those processes might be affected by trends outside and inside the organization.

    Depending on the current strategic priorities of the business, analysts might focus their expertise on the analysis of stakeholders, marketing, finances, risk, and information technology.

    What is a Business Process?

    Business processes are often classified into three major levels, including governance, management, and operational. Governance is typically the role of a Board of Directors, in the case of corporations. Board members ensure a clear purpose and top-level priorities for the corporation. Management is the purview of executives and managers, who ensure the most effective and efficient means to work toward that purpose and address those priorities. Operations include the day-to-day activities to carry out those means.

    Organizations usually have an overall recurring process that lends structure, orderliness, and understanding of the organization’s activities. The organization’s business process significantly affects the focus and methods of business data analysis.

    What Are Some Common Business Processes?

    Balanced Scorecard

    This method focuses on developing four overall indicators, or measurements, to assess progress toward achieving organizational results. The indicators address customer perspective, internal business processes, learning and growth, and financials. Although the method can require extensive use of resources, the Balanced Scorecard is beginning to receive strong attention among many organizations.

    Business Process Re-engineering (BPR)

    This method aims to increase organizational performance by radically re-designing the organization’s structures and processes, by starting over from the ground up. BPR can be demanding on employees, who are often already overloaded with other work. There are many proponents – and increasingly, it seems – opponents of BPR. Still, the process might be one of few that really forces leaders to take a complete, fresh look at systems in their organization and how to re-develop those systems anew.

    Knowledge Management

    This method (or movement) focuses on the collection and management of critical knowledge in an organization to increase its capacity for achieving results. Knowledge management often includes extensive use of computer technology. In and of itself, this is not an overall comprehensive process assured to improve performance.

    Its effectiveness toward reaching overall results for the organization depends on how well the enhanced, critical knowledge is applied in the organization. At this time, knowledge management is receiving spotted attention among smaller organizations.

    Management by Objectives

    This method aims to identify and closely align organizational goals and subordinate objectives throughout the organization. Ideally, employees get strong input to identify their own goals and objectives. It includes extensive, ongoing tracking and feedback in the processes to reach objectives. Similar to continuous improvement, many organizations already implement some version of MBO, but probably not to the extent that experts in MBO would recognize as MBO in the organizations.

    Strategic Management

    Basically, strategic management is the systematic, ongoing development and implementation of strategic planning. Strategic planning is well known for determining an organization’s mission, vision, values, goals, strategies, objectives, timelines, and budgets. It is one of the more well-known processes. There are numerous different ways to do strategic planning, and its development and implementation depend to a great extent on the life stage and culture of the organization.

    Total Quality Management (TQM)

    TQM involves carefully implementing a set of comprehensive and specific management practices throughout the organization to ensure the organization consistently meets or exceeds customer requirements. The process involves a strong focus on process measurement and on controls to ensure continuous improvement. TQM is considered to be a quality management initiative. At the time of this writing, TQM has not become a major model for performance management in smaller organizations.

    How do Analysts Typically Collect, Analyze, and Report Results

    There are a wide variety of different methods used by analysts. The following are the more common ones.

    Examples of special areas of focus include:

    Where Can I Learn More?

    Business analytics is highly technical expertise, which is one of the reasons that it is in such high demand. However, many experts in management education are asserting that in today’s highly rapidly changing and highly complex world, executives and managers should have at least some basic skills in business analysis. Here are some resources for learning more.

    For the Category of Business Research:

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    Max