A Beginner’s Guide to Business Analytics

So, you’ve finally decided to become a business owner. This one choice has already set you on the right path. Being a business owner means making your mark on the world, having steady work and getting one of the best passive incomes you can imagine. However, there’s a lot more to business than simply making sales and onboarding new recruits. In many guides for helping new business owners, there’s a massive lack of analytics. Analytics are one of the most important factors of running your business. They’re ultimately how you keep on top of things while being able to come up with better strategies. In this article, we’ll be going over what beginners need to know about analytics and how it helps them become a successful business owner.  

What are Business Analytics?

In simple terms, business analytics are what owners use to solve issues while compiling up-to-date statistics. For a more concrete answer, analytics are a combination of disciplines, software, and technology to assess performance and engagement. It’s, more or less, how a business can figure out their strengths and weaknesses.  

Vehicle Telematics

To give you an introduction to analytics, let’s take a look at vehicle telematics. Vehicle telematics are a method business owners and fleet managers use to keep better tabs on their vehicles. It uses various software and technology to accomplish this. With the rise of the internet and online businesses, telematics, as a whole, has seen a huge surge in popularity over the past few years. If you plan on using a fleet for future business ventures, you’re going to need vehicle telematics. In fact, it’s actually required by law to have them or else your fleet won’t be operational. The mandatory technology you need are electronic logging devices (ELDs) and GPS tracking software. ELDs are what record data from the vehicle itself. It’s able to do this because it’s installed into the onboard diagnostics (OBD) of the vehicle. The OBD of a vehicle is essentially the motherboard. This is what keeps track of data such as the vehicle’s speed, what time it was turned on, how long it was used to even how forceful a specific turn was. You can further your data gathering by installing a tachograph, which is like an ELD, except it focuses more on speed. GPS tracking systems allow owners and fleet managers to see where each vehicle is at any given time. It also lets you come up with more cost-effective strategies such as route optimization.  

Different Types

Now that you know what they’re for, let’s get into the types of analytics you can use. You can make use of unstructured data but why do that when you can follow one of the common types instead. There are a total of three different types you can use. These analytics include:

• Descriptive
• Predictive
• Prescriptive

We’ll go over these types one by one, so you can have a better understanding of how they work.  

Descriptive Analytics

Let’s start with descriptive analytics. Descriptive analytics is when companies use historical data, which is data from the past, and compares it to the current data. This is used as a way to understand current trends and having a broader idea of what patterns to keep an eye out for. You perform this analysis using data mining and data aggregation. Descriptive analytics are typically shown using visual representation. More specifically, you’ll be using bar graphs and pie charts to show your findings.  

Predictive Analytics

Predictive analytics are a little more complex than descriptive. It’s data that uses probability to determine what could happen in the future. Similar to descriptive, predictive analytics take advantage of data mining, but it also uses statistical modeling. This is a process used to determine the business’s future and potential outcomes while using historical data.  

Prescriptive Analytics

Predictive analytics are supposed to show you the potential future and descriptive is meant to show you results that occurred in the past. Prescriptive analytics works differently as it shows you what the best option to go forward is. It uses mathematics as well as computer science such as algorithms to determine the best approach.  

Potential Challenges When Using Business Analytics

Despite the advantage using business analytics gives you, there are potential issues you can run into. It’s not uncommon for new business owners to experience them. The first problem you can expect to face is the lack of experience and skill. Many new business owners are thrown off by the complexity of using business analytics. This is why many hire those who are well-versed in the field. Another issue you can face is having too many options. As funny as it sounds, having too many data sources can hold you back more than it helps you. This makes it hard to establish a framework of data, so it’s important to narrow down your options.