Business Analytics is simply, the application of analytical techniques to resolve Business issues. It allows the organizations to “face forward” bringing insight to transformative decisions. It benefits all aspects of an organizations value chain including
Inbound logistics: receiving, storing, inventory control transportation scheduling.
Operations: including factors such as packaging, equipment maintenance, testing and all activities from the raw material to final product.
Outbound logistics: the activities required to get the finished products to market, including warehouses and distribution management.
Marketing and Sales: Activities that lead a buyer to purchase including channel selection, advertising, promotion, selling, pricing, retail management and shelf space optimization.
Services: Activities that maintain a product’s value including customer support repairs, installation, training, spare parts management more.
In this way, business analytics drive innovation and improves an organizations speed of response to market and environmental changes. In the credit card scenario, business analytics cannot only discuss the casual factors of fraud, but also forecast accurately when it will occur again. The company can then change business process accordingly.
A Step toward business analytics
Effective decision making requires a business analytic framework that gives sustainable growth through innovation and plan for change while managing and balancing risk. It provides flexibility across the entire range from highly managed operational analytics such as setting a simple credit limit to discovery based analytics such as credit fraud scenarios or setting dynamic credit limits.
HSBC: fraud detection that exceeds aggressive goals.
With the fraud levels surging around the world, banks are facing greater regularity scrutiny, as well as risks associated with damaging publicity from fraud. The ability to correctly make split-second decisions on accepting credit card transactions – before fraud occurs – is more important than ever.
Using Business Analytics Framework, HSBC prevents, detects and manages financial crimes by scoring and accepting or rejecting millions of transactions a day in real time – at the point of sale.
As a result, the global financial services leader has achieved significantly lower incidence of fraud across tens of millions of credit card accounts.
Analytics, testing and data
Surveyed firms make better decisions by applying business analytics. Eight four percent of respondents mentioned an analytical component in their decision improvement and Sixty six percent mentioned to improve data. The range of analytical techniques employed are quite abroad. Scoring approaches based on statistical analyses like multivariate and logistic regression are commonly used. Other statistical forecasting prediction of various phenomena and the use of text analytics are also used.
Systematic testing is one of the form of analysis which is frequently used by the companies. Regression analysis is used to find the performance appraisal of the companies. One key virtue is that it creates decision – oriented context from the start.
Analytical models help collection team to understand who is most likely to respond which communication channel work best and how much payment to expect.
Collection optimization driven by business analytics delivers the results that institutions need to improve their profitability.
Business analytics allows network and service managers to better understand causes and impact of failures. Thus, Analytical approaches give clear path to make better decision and mitigate risk.
