Can Business Analytics Change the Way CEOs Manage Business Ops?

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The organizations that are best equipped to thrive in the current, volatile environment, as well as the future, are those led by CEOs who have succeeded in making business analytics the basis for strategic and operational decisions. 

As technology continues to develop in the areas of analytics, machine learning, and artificial intelligence (AI), business models have evolved too, with many recent successes being “born digital.” Most others are trying to catch up, and the CEO plays a vital role in this race. Some have established strong data cultures within their organizations, which means that key decisions are taken based on business analytics, rather than intuition or gut feel. These data visionary CEOs have also succeeded in moving their organizations to the next level of maturity — from simply collecting as much data as possible to generating actionable insights for better operational management. 

Most CEOs are feeling a sense of urgency for putting the right business analytics framework in place to actually drive change and there are three main reasons for this:

  1. Intense competitive pressure, often from new entrants who are ahead of the analytics curve 
  2. The huge amount of digital data generated by consumers as a result of their web and mobile usage, and the need to make sense of this data in order to stay relevant
  3. Increasingly demanding consumers who expect faster and more personalized delivery of services

CEOs with the vision to create a data culture have made business analytics a top priority and are steering their organizations through this change. On the other hand, organizations led by CEOs who have either not focused on ushering in a data culture or have been unable to overcome internal resistance are at serious risk of dropping out of the race. 

CEOs recognize the role of business analytics at the strategic as well as operational level. Business analytics helps to shape strategy by identifying areas of opportunities and flagging up risks. When it comes to managing business ops, analytics plays a vital role in providing a clear view of the current situation and enabling measures to optimize resources, better serve customers, realize revenue, and manage finances. 

Thanks to real-time visibility and the ability to track KPIs, every aspect of business operations can be made more productive and profitable with analytics. Business analytics provides CEOs complete visibility of the sales funnel, customer retention, manufacturing productivity, cash flows, operating costs, resource utilization, and how these are all interlinked. 

Speed is a great competitive advantage, and those who have not adopted the full power of business analytics are working based on weekly, monthly, quarterly or even annual reporting. So they are always looking at events after they are over and basing future actions from the lessons learned. Data visionary CEOs, however, are using business analytics to stay many steps ahead. 

Traditionally, operational decisions have been based on the reports generated from many different systems such as ERP, CRM, marketing analytics, and others. Today, a business analytics platform can empower the CEO by aggregating and correlating data from all the different functions, as well as from third-party sources. 

For further understanding, here are some specific business objectives that can be achieved by managing operations based on analytics:

1. Customer acquisition and retention

CEOs can drive growth by leading marketing to adopt the power of business analytics. Analytics can help to segment the market based on the analysis of historical data about customers. Market research reports and survey results can also be integrated for more accurate profiling of consumer segments. 

For instance, when it comes to advertising, analytics plays an important role in comparing the cost and effectiveness of various media. Advertising and promotional ideas and creatives can be tested, and analytics can help to identify those that are bringing the best ROI. While executing campaigns across multiple media platforms, social media, and advertising channels, analytics provides fine control to an extent of detail that was not possible before. The marketing team can plan campaigns with insights about which time of day is best, which words elicit the best response, or what the color of the call-to-action button should be. 

Once the sale is done, business analytics can help to keep the customer engaged, so that she advocates the brand to other potential customers, and stays loyal. Many CEOs today are focused on rolling out measures that will continuously deliver value to users. In order to achieve this, the marketing team needs to have a unified view of each customer. 

Analytics provides this view and information about all interactions with the individual, enabling the marketing, sales, and service functions to work in a coordinated manner and maximize the lifetime value of each customer.
Customer interactions through contact centers, live chats, emails, social media, and mobile apps create huge volumes of data. Business analytics systems can help the CEO  to make meaning of this data and drive operations to satisfy customer queries, address issues, minimize service requests, and increase repeat purchases.  

2. Production efficiency and asset optimization

As more and more supply chain processes and production machinery become IoT enabled, the volume and velocity of data are growing exponentially. While IoT makes the continuous monitoring of production processes possible, it takes business analytics to flag any issues early and identify possible causes. CEOs can harness manufacturing data effectively and achieve higher returns on production assets, optimization of investment in inventory, and more efficient production. 

It is in the interest of the business for the CEO to drive the production function to embrace business analytics wholeheartedly. Procurement planning can be done based on an analysis of past trends and predictive analytics about future demand and the sales pipeline. The cost, quality, and delivery time of each supplier can be measured and tracked. 

On the production floor, it is important to minimize the downtime of equipment in order to prevent any loss of productive time. IoT and business analytics can be used to maximize equipment productivity by undertaking predictive maintenance and minimizing the chances of failure. Analysis of production data helps to identify any people, process, or equipment-related issues that need to be looked into. 

3. Effective distribution and logistics

Whether a company is shipping products around the world or the country or only in the neighborhood, the challenge is to know the optimal quantities that should be shipped — where and when. Distribution and stocking at various places cost money, but at the same time, the sales team does not want to risk a stock-out situation. 

Business analytics provide operational managers with data that enables accurate planning and fine control. Demand forecasting that incorporates historical trends, regional fluctuations, future predictions, and marketing campaigns helps to make informed distribution and logistics decisions. For example, a food retailer incorporated weather predictions to estimate the demand for specific items, based on the correlation of consumer preferences and weather conditions.

CEOs who drive this change in distribution and logistics operations can see results in the form of lower shipping and distribution costs, better fulfillment of market demand, and higher sales.

4. Better return on capital and cash flows

Once a powerful business analytics solution has been deployed in the organization, the availability of real-time data, and the integration of information from a variety of different systems, offer insights that enable tremendous improvements in financial management. Finance managers are able to plan future cash flows based on invoices, typical recovery cycles, and predicted business. Daily sales outstanding (DSO) reports are not merely for viewing; managers can now dive deeper into the data to see the outstandings for different customers, locations, product lines, or even salespeople. With this information, managers can make the necessary changes in order to improve revenue recovery.  

When it comes to analyzing profitability, the chief finance officer (CFO) and CEO can slice and dice data to see how different product lines, distribution channels, regions,  teams, and promotions are performing. With business analytics, this goes far beyond simply viewing charts; the CEO can look at the profitability in conjunction with other internal and market data in order to make the right operational decisions. 

The role of business analytics in enabling CEOs to better manage business operations will steadily grow in importance in the future. CEOs need to ensure that the right technology, talent, and processes are quickly put in place to get the best value from business analytics. Business analytics platforms today must be designed for business users, and not be dependent on data specialists to generate information and insights. With the continuously evolving capabilities of machine learning and artificial intelligence, business analytics platforms are providing more accurate forecasts and predictions to guide operational decisions. 

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