Business analytics refers to the process of extracting insights from data to make informed decisions regarding a business question or challenge. Across industries, organizations need skilled professionals who can make sense of the vast amounts of data they generate and put it to good use.
No matter your role, understanding how to collect, interpret, and communicate with data can be beneficial. Whether you aspire to work as a business analyst or wish to apply business analytics in a different position, developing your understanding of business analytics can empower you to make informed decisions and address your organization’s needs.
Acquiring such skills can also be an effective way to make your resume stand out and advance your career.
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By nature, professionals who seek to realize the value of business analytics should be inquisitive problem-solvers and possess strong communication skills. When combined with technical skills, such as proficiency in statistical analysis methods and tools, these qualities allow professionals to put business analytics to work and make better data-driven business decisions.
Here are five skills you can develop to improve your understanding of business analytics.
1. Data Literacy
One of the fundamental skills to build before diving into business analytics is data literacy. At its most basic, data literacy means you’re familiar with the language of data, including different types, sources, and analytical tools and techniques.
Being data literate also means you’re comfortable working with data in various ways—from evaluating it to manipulating it and gaining insights. Developing your data literacy can be highly beneficial when addressing business challenges with analytics.
If your organization has a dedicated team of data scientists, engineers, and analysts, having data literacy can also enable you to communicate with those professionals and work toward common goals more effectively.
2. Data Collection
The first step in leveraging analytics to drive business decisions is to collect a data sample from which conclusions can be drawn. It's important to understand the basics of data collection to avoid biased or faulty data.
In some cases, a dataset already exists, and it’s up to the business analyst to pull relevant information. For example, if you’re interested in discovering a retail store’s most profitable products, you might start by pulling historical sales data for transactions that took place over a specific period. Depending on an analytics team’s structure and sophistication, a data scientist may be responsible for cleaning or wrangling raw data.
Some business questions may require generating new data using several methods. A customer survey, for instance, can be a powerful means of collecting both quantitative and qualitative data. Care should be taken throughout this process to ensure the sample is representative and avoids bias. Simple mistakes, such as asking overly ambiguous or complex survey questions, can be detrimental to your data’s quality and lead to flawed decision-making.
Other forms of data collection include interviews, questionnaires, and focus groups.
3. Statistical Analysis
Once armed with a dataset that’s relevant to the business question you wish to address, you need analytical skills to make use of it. Being able to analyze and interpret data is the driving force behind making well-informed business decisions.
Several statistical methods can be helpful when it comes to analysis, including:
- Hypothesis testing, which is a statistical means of testing an assumption.
- Linear regression analysis, which can be used to evaluate the relationship between two variables.
- Multiple regression analysis, which is used to evaluate the relationship between three or more variables.
Through these forms of analysis, you can draw insights and conclusions that answer your business question or identify opportunities worth pursuing and risks in need of mitigation.
4. Communication
While insights derived from reliable data are key to making informed business decisions, it’s likely that other stakeholders need to be involved in the decision-making process. For this reason, effectively communicating your findings is essential.
Without strong communication skills, the value of your analyses can go unrealized. You need to use data and your findings as tools to convince others of a solution to the business question in focus. This can include oral communication and presentation skills, along with written communication in the form of reports.
5. Data Visualization
Data visualization goes hand in hand with strong communication, as it allows you to present findings in an easily digestible format for those who may not be as data literate as you are.
When communicating with stakeholders, it’s typically unnecessary to include every bit of data you’ve captured. Rather, it’s more effective to distill findings to key takeaways and present them in a manner that’s easy to understand. Data visualization allows you to do just that.
When developing your data visualization skills, there are two components to keep in mind: Knowing what visualization techniques are most effective for the type of data or business question you’re addressing and proficiency in the tools needed to bring those visualizations to life.
Developing Your Analytical Skills
There are several paths to develop your business analytics knowledge, which vary in time commitment, cost, and rigor. One of the best ways for working professionals to boost their skills is by taking an online course, such as Business Analytics offered by Harvard Business School Online.
Throughout the course, learners develop analytical skills and put them into practice. The course covers several important techniques used to address real-life business questions, in addition to employing an Excel simulator for practice problems.
Do you want to realize the power of data-driven decision-making in your organization? Explore our eight-week online course Business Analytics and other analytics courses to hone your skills.
