How to cut costs using business analytics tools

How to cut costs using business analytics tools
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Companies are drowning in useful data that can be analyzed to improve customer experiences, cut costs and increase efficiency. Most businesses do not have the ability to decipher this data, so they turn to business analytics professionals who can do it for them. These analytics professionals use a tool called the Internet of Things (IoT), which collects data from all of a company’s smart devices to produce useful information. The data is compiled by specialized software and can be programmed to produce easy-to-understand reports that anyone can access.

How can business data be used to cut costs?

Boost productivity

Software that analyses business data can be useful in saving employees time. These employees would normally have to sift through all the data themselves to make a report. The software can be programmed to focus on certain elements of the business and generate an easy-to-understand spreadsheet. This saves time and money for employees, who can spend their time doing more consequential work. The software is easily accessed by other departments, so there is no wasted time in communicating back and forth, as everyone can see the same information at the same time. Business analytics software can also assess the productivity of a department and figure out ways of making them more efficient and getting more work done in the same amount of time.

Reduce costly turnover

Business analytics can help with the recruitment process by analyzing the data of each employee to see which ones are likely to stay and which are likely to leave. It costs a lot more to recruit and train a new employee than to make some small adjustments and keep the ones you have.

Reduce transportation costs

If your company uses trucks to deliver goods, then having a device that can analyze routes, gas consumption and delivery times can help you pinpoint what areas can be more efficient and cost-effective. An example would be calculating routes for each driver and combining some to save on gas. Some insurance companies have also employed analytics by installing devices on trucks that track data to lower or raise your insurance rate. This can be used as an incentive for the drivers to get a safe driving score by offering a reward.

Avoid costly mistakes

Avoid Costly Mistakes

Cutting down on costs is one of the key reasons to use analytics software for your business data. Every company has miscategorized data that makes it past the analytics and doesn’t get represented in any analysis. This data is called ‘dark data’ and can make the system vulnerable to hackers. You can also lose customers because there are critical items missing from your data analysis. These issues cost money to fix, not to mention the revenue lost in downtime. Analytics software will keep your business data organized and catch any discrepancies right away before the situation gets critical.

Beat your competitors

Business data software doesn’t just help you see your business more clearly but can also analyze what your competitors are doing. When you can get a clear picture of where you stand in the market, you will be better able to make improvements that make you more competitive. For larger companies, it may be best to train existing employees in business analytics so that you can have an in-house analysis done regularly.

If you work for a larger company with a department that does analysis of business data, then looking into an online business analytics degree could help you move up in your career. In some companies, there may be a program that will pay for some or all of your degree if you agree to work for them for a period. Business analytics is a fast-growing industry, so you could progress in your career by jumping on this fast-moving train early.

Reduce inventory costs

Business analytics software can help reduce inventory costs by pinpointing patterns in the ordering system. A large problem with companies that keep inventory is that sometimes money goes out to purchase many items that end up sitting on the shelf and not selling. The money that was used to purchase those products can’t go toward buying anything else, so the company needs to borrow more money for new inventory.

Borrowing money means paying interest on a loan. With a smart system in place, a small number of products can be kept in stock, while the system can reorder when the amount gets below a certain threshold. This reduces the amount of overstock and wasted revenue. The money that is saved can go toward improving the inventory system.

Reduce energy costs

According to Forbes, the use of IoT devices can significantly reduce a company’s carbon footprint due to their size and complexity. These devices are much smaller than a computer chip and require fewer materials to make while also using up far less energy to run. Smart devices can keep track of energy usage and look for more efficient ways to do the tasks of the day with less energy. Something as simple as turning off the lights when no one is in the building or adjusting the thermostat so that the temperature is regulated more efficiently can reduce a company’s overall energy bill by quite a bit.

Whether you run a large business or a small store with one employee, you are collecting useful data that can help your company evolve. Business analytics software can collect all of that data and point out areas where even small efficiencies can be made. Installing smart devices that talk to each other to regulate the temperature in the building, control the lights when no one is using them, and find other areas where energy is being wasted can reduce costs and your carbon footprint.

In today’s market, every little advantage helps, and the investment you put into analyzing your business data will pay off in the long run.

Thank you for reading!