Turning Insights into Impact: The ROI of Business Analytics

Transforming data from raw information to business insight is a process that many organizations undertake daily - whether it’s to understand current business processes, or innovate on new ones, data and the insights it generates can present opportunities to boost the bottom line of companies small and large significantly.

No matter whether you’re completing an online master’s in business analytics, or are a well-heeled analyst, there’s much that can be learned from companies that are turning data and insights into profit. Let’s explore why data is so integral to understanding the performance of modern organizations. From there, we’ll explore how some of the world’s largest companies use insights to generate meaningful impact for their businesses, from industries as vast as information technology to consumer goods and retail operations.

 Why is Data so Critical for Insights?

British author Arthur Conan Doyle is widely credited as the mind behind fictional detective Sherlock Holmes. Depicting the detective as brilliant, deductive, and reasoned, and inspired by the works of Poe, Doyle portrayed the character as an individual who required evidence to make qualified assumptions - even if they weren’t always immediately clear.

While Doyle died many decades before the advent of modern personal computing, and the immersion of the digital world into modern business operations, his works made note of the importance of data in gathering insights - extremely relevant to today’s business operations.

“It is a capital mistake to theorize before one has data”, Doyle writes in Sherlock Holmes. Continuing, he highlights the issues of making unsupported theories, stating that “Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.”

Curiously enough, this quote, nearly a century before the widespread use of data in business decision-making, was somewhat prescient. While it may be easy to make an assumption, making the wrong decisions can not only be harmful to business - they can also run a business into the ground, and out of business. 

Take, for example, the decisions of companies such as Blockbuster - assuming that their DVD business would outpace emerging digital startup Netflix, without considering the impacts of a growing Internet, as well as changes to consumer behavior, ultimately resulted in the downfall of a brand that was once in shopping malls nationwide.

 Using Data to Pivot Successfully

The fall of Blockbuster is just one example of just how important it is for data to form useful decision-making. While it’s easy to make an assumption based on existing business practices, it is critical that organizations can use the data that they have to develop meaningful and useful insights, even if they challenge the normal business operations of a brand.

A common operation that analysts using Microsoft Excel are aware of is the ability to create tables that pivot and summarise data. This ability to pivot, while handy in data analytics, is also crucial for businesses that may be experiencing adversity or difficulty. It’s easy to stay in the same place, and it can be hard to manage organizational change. However, if you’re able to successfully pivot, it can potentially yield a significant return on investment.

Take, for example, entrepreneur Andrew Mason - widely known as one of the founders of the collective buying site Groupon. It may seem like Groupon was an idea all on its own, but in fact, it was a pivot from one of Mason’s existing projects, The Point. 

Seeking to find a way to leverage the power of collective action that was used in The Point’s social good projects, Mason used data to identify that an opportunity existed to commercialize selected aspects of collective bargaining (such as buying), while also being able to support social projects.

The impact? Groupon’s launch in 2008 changed the way that shoppers look for deals online - and turned Mason’s idea from a pitch deck to a four hundred million dollar business. Not bad for an idea that was a pivot!

 The Hidden ROI of Business Analytics

It can be easy to consider the benefits of large, significant changes to an organization, to quantify their financial impact and return on investment. However, data is immersive - simply put, data can be used to drive insights across all areas of an organization, and sometimes, the impacts can be felt over a longer term period.

Take, for example, the world of aircraft maintenance. While it’s easy to accuse airlines of not caring about their passengers, particularly when planes look like they’re stuck together with duct tape (spoiler: they aren’t), the reality is that a single disruption to a plane’s operation can result in operational impacts that can cost millions of dollars, such as the impacts that are present during major weather events.

When a plane is out for maintenance, it’s often critical for mechanics to be able to get the aircraft back in the air as quickly and efficiently as possible. Being able to plan for scheduled maintenance can be a game changer for not only airlines but also engine manufacturers - as it allows them to spend money more efficiently on maintenance, while also ensuring high levels of safety in the air.

GE Aerospace uses the power of data to inform engine owners on the operational performance of their aircraft engines. From their teams in Cincinnati and Shanghai, GE Aerospace can use data from the 30,000+ engines they monitor to create advanced predictive models - enabling the more efficient use of aircraft around the world.

 Data’s Everywhere - Business is Only Getting Started

Data has taken center-stage in the last four decades - from the powers of the personal computer to the wealth of information that is generated from Internet-of-Things (IoT) devices and the Internet more broadly, companies large and small have access to realms of information that the predecessors could have only dreamed of.

It’s an exciting time to be immersed in the world of data - and for many organizations, they’re only getting started using data to drive operational insights. With further developments in new technologies and platforms, such as Artificial Intelligence (AI) and Machine Learning (ML), we can only begin to imagine how the companies will use to data of tomorrow to transform businesses, no matter the size. Just imagine the possibilities!