History has shown us that decisions backed by facts are usually the right ones. In this digital era, where customer expectations and competition within industries are at an all-time high, companies must seek a competitive advantage that can help set them apart from the competition. Going into 2022, we will see more and more data being used and consumed. With this surge in data, companies have incredible opportunities to understand their customers and identify how they can become better. The companies at the top know the importance of data and the know-how to make full use of it. When data and analytics are utilized together, the results are extremely apparent. Companies can leverage this information to cut costs, eliminate operational inefficiencies, develop new processes and strategies, establish competitive advantages, and most importantly create an amazing customer experience.
Business leaders increasingly embraced analytics and artificial intelligence (AI) prior to the COVID-19 pandemic’s control around the globe. According to Mckinsey(1), the annual economic worth of these capabilities is anticipated to range between $9.5 trillion and $15.4 trillion.
We are going to discuss how analytics are utilized to achieve a competitive advantage in different ways.
Improving Operational efficiency
Companies can gain a competitive advantage by reducing their production costs and passing more value in their products or services. By using data analytics and identifying areas where they can improve, companies can make full use of the huge reservoir of data available to them. They can also use analytics to identify operational inefficiencies and flaws that would normally not be possible.
For example, Airbus used analytics to improve its manufacturing, development, and maintenance processes. This helped them reduce the number of operational incidents altering flight timings and allowing them to better utilize their resources while designing a new aircraft. They also performed real-time analytics on fuel data allowing them to cut usage by 15%.
Better deployment of resources
Big data analytics may provide a competitive advantage by providing insights into the best techniques for increasing employee productivity in the workplace, in addition to determining what works for customers.
More and more companies are turning to analytics to figure out “Who are their most effective employees? How can they motivate their coworkers to succeed?”. Here are some examples of how an organization uses analytics to improve human capital management:
- Best Buy, includes that value in its annual operating income of more than $100,000.
- Beginning in 2017 and continuing into 2018, Deloitte identified the adoption of People Analytics as a prominent trend.
Personalized customer service
Companies such as Amazon and Netflix have set the standard for customer satisfaction. Using their recommender systems, users are presented with the most relevant items, which are sorted according to their liking.
In recent days, many small and medium-sized companies have started to use recommender systems that provide users with rich personalization.
For example, Pandora makes recommendations based on a number of factors which creates personalized radio stations for users based on music evaluations that are suited to their specific tastes.
Identify Potential Risks
Businesses nowadays thrive in high-risk cultures and big data has played a key role in the development of new risk management solutions and creating wiser tactics.
Take a live example. During audits, BDO (a national accounting and audit firm) employs big data analytics to discover risks and frauds. The process of identifying disparities is more streamlined and filtered thanks to big-data analytics. In one situation, according to BDO Consulting Director Kirstie Tiernan, they were able to narrow down a list of thousands of providers to a dozen, and then evaluate data individually for irregularities, making it easy to pinpoint a specific source.
Forecast Sales
Business teams can now more accurately anticipate sales in different parts of the country at different times thanks to analytics. Merchandising analytics can tell you which products are selling the best and which ones aren’t. This aids in choosing which products should be sold in retailers throughout the world. Titan achieved a 93 percent accuracy in sales forecasting last financial year.
What have we learned?
To compete and stay relevant in today’s world, companies must cut costs, utilize resources better, and provide customers a unique experience.
In conclusion, data is your best friend and analytics is your other best friend. When they are effectively utilized, amazing results can be seen by organizations.