The Science Behind Business: What Data Science & Analytics Can Prove

Managers often struggle to visualize the relationship between data science, analytics, and their business’s bottom line. However, data scientists will argue that there limitless ways to leverage analytics in business.

The US spends the equivalent of 18% of its GDP on healthcare. If the US can find a way to increase efficiency and save 1% of that spending, it would free up $35billion annually. That would enough to build homes for all homeless people in the US within three years. 

Such is the power of data science and analytics. Businesses that continually collect data can find useful insights to help save costs, scale faster, and hire the right talent. 

Here are five questions data science and analytics can answer for businesses. 

Data Science and Analytics in Customer Retention

A new business that intends to grow must, at the very least, understand its existing customers. Without analytics, the management will be winging it, hoping to get it right. 

When they collect data, the management will first understand the demographics of their clientele. They can then find out what it is the customers like and what their expectations are going forward.

Today, businesses know more about their clients than at any other time in history. Having insight into customer behavior puts the business in a position to act proactively. For instance, a restaurant with a large customer base made up of students can develop a value-pack exclusively for them. 

Analytics will come in handy when evaluating such product development’s success by comparing sales data before and after implementation. There should be an expected spike of student patrons in the establishment. 

The Strength of Your Recruitment and Talent Development

Organizations today can integrate analytics into their recruitment efforts. By gathering information on past hires, finding out the type of candidates best suited to fill a given position is possible. Analytics can reveal the organization’s retention rates, the average stay at the company, and the qualities of hires who succeed.

When hunting for talent, organizations relying on analytics are seeking these success-predicting qualities.

Analytics can also help reduce your organization’s time to fill positions by recruiting from within the organization. By continually collecting data on the existing employees, the organization will have a list of candidates best primed to fill in management positions when vacancies arise. 

For a big organization, this could mean tens of positions. The cost of internal recruitment is always lower than that of external recruitment.

Quality of Marketing Efforts and Customer Segmentation

Data science and analytics can prove whether a business is using its marketing budget optimally. 

Today, businesses can help predict what customers will be most valuable to them over a few years. Armed with enough data points on clients, scientists can build a model to tell which clients businesses need to prioritize. Any company that relies on customer relationships ought to pay attention to customer lifetime value. 

As highlighted, businesses now possess more information about their customers than at any time before. They are in a position to personalize marketing efforts. By showing the right ads to high potential clients, businesses should save advertising dollars while maximizing returns on marketing.

The Accuracy of Risk Management

Data science and analytics will help improve the risk management efforts of any business. Business environments are dynamic, and companies need to be able to prepare for new trends.

In the past, business leaders relied on their experience to predict or react to new developments happened. Today, analytics can help businesses build models to quantify risk and simulate changes in the business environment. 

For instance, if you have an asset-heavy business, you can model the effect of a break-down in your machines. With that, you can simulate different solutions and settle on an optimal one. Other risks include the entry of competitors to the market, legal contingencies, and much more. 

The Cost of Asset Maintenance Systems

The frequency of maintenance of machines is an important aspect of any business. If the schedule is done too late, the machines are at risk of breakdown. When done too early when the machines are okay, the organization incurs unnecessary shutdown costs. 

Analytics brings light to the whole process. Organizations can use asset-tracking software to collect data on the health of a machine. With that, an organization can schedule maintenance at just the right moments.

Data science and analytics can help businesses decide whether the cost of maintenance of assets is sustainable. For instance, analytics can reveal whether the replacement cost could be lower over the maintenance. It is also possible to predict and quantify the cost of ownership of an asset over its useful life.

Supply Chain and Inventory Performance Management

Inventory management costs are a major category of expenses for companies. Analytics and data science can help test the efficiency of the inventory management system and supply chain.

Analytics can help model demand and thus enable planning on how much inventory to keep. By identifying trends in supply chain and demand data, predicting shocks and react proactively is possible.

For instance, analytics can help identify correlations that management would otherwise never have found out. Such capabilities drive a positive return on investment in inventory management software that integrates analytics in its functionality.

Data Science & Analytics Impact on Decision-making

In summary, data science and analytics help to prove the accuracy of business leaders’ decision-making. The speed at which business environments are changing demands that decision-makers have the most recent, accurate, and insightful information possible. 

Fortunately, there is an abundance of data to collect and the right tools to draw insights from such data. Supply chains can be optimized, inventory management costs can reduce, assets can be managed better, and recruitment can be finetuned. 

If your organization wants to unlock capabilities available from data collection and analysis, Transcendent Software LLC will help you get started. We help organizations identify areas of opportunity for improving efficiency through data analysis. 

We have successfully worked with organizations across all spectrum over more than 20 years. Our solutions rely on the best technology but break down the solution into ways that you understand. To find out what your data can do for you, get in touch with our team here!