Analysis is the right tool to weigh varying factors in decision-making and improve management effectiveness.
The connection between the analytics and the operational system has not been made seamlessly yet. Analysis can be used as an effective tool to align important business activities that have a three-way impact - revenue, cost and investments at the same time.
Information analysis can improve business profitability: Profitability as different from Profit is an ability to run a value-added business. Every business has a purpose; profit or revenue is a byproduct. Analysis should be used to understand what drives profit, how that fits within your strategy, how you execute, generate improved products and more advanced services based on insight from data analytics, to achieve strategic business goals, also making certain profit.
While most companies are ultimately interested in profit maximization some companies are more interested in controlling market share rather than their profit margin, improving customer experience. Everything from how pricing is affecting close times and support calls to referral business activity triggered by high customer satisfaction, etc. Companies use quality information in every segment of their business to drive improvements in revenue and margin related corporate performance.
Information analysis helps to optimize business cost: Organizations have limited assets or resources, to improve business effectiveness and efficiency, the challenge is to have visibility and traceability between costs and the assets consuming those costs. Data-based cost/benefits analysis is an important tool to optimize cost structure without sacrificing quality, improve value chain and better brand value or market share.
Analysis is the right tool to weigh varying factors in decision-making and improve management effectiveness. When selecting the right set of metrics for cost optimization, ask whether the metrics can reveal anything meaningful for the identified purpose, and ensure the management buy-in. Scrutinize cost, complexity, or footprint, improve the visibility of costs measured against the visibility of quantifiable benefit. When cost is too high, doing analysis to discover the causes would generally be started, and then based on that analysis, some putative cure would be put into action. Further impact analysis is needed to improve business effectiveness.
Information based risk analysis is also crucial to do pre-work for risk assessment of business investment in the correct manner. Identify risk issues related if the initiatives cannot be easily accepted by staff about cash flow from the corporate capacity or level of trust with suppliers to provide the service. As long as risks have been identified and agreed with stakeholders as per business needs, then you can take information driven risk models that effectively predict, optimize, and consider a continual and sustainable approach with multi-faceted perspectives, and the specific threshold for justifying opportunities and business outcomes.
Information based analysis can make a big difference. In the information based society, what used to be called “knowledge based enterprises” are designed to transform unevaluated information (raw data) into information whose accuracy and authenticity are verified, and then information is transformed to knowledge, and business insight to run a smart business for achieving high-performance business results.
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