Any business starts to develop and sustains itself based on data. Now imagine a hundred pages of data on the one hand and a pie chart based on that data on the other hand. Which one would you prefer to understand the data? A structured and organized form of data, like a pie chart, is called information, and the process of organizing the data is called reporting. Adding insights and interpretations based on the reporting is called analytics. It includes data mining, analysis, performance, and plans for future implementation.
Steps towards Value Addition
It is essential for a business in today’s time to report data and analyze the report. It depends on this data that a company makes strategies and performs actions for future sales or marketing. The final value addition happens due to these informed actions.
Let us look at an example to understand how reporting and analytics help to add value to a product/service in a business. Suppose a company sold 100 products. The data available about the sales is a list of the products and where they were sold. In the reporting stage, visual aids like tables, graphs, pie charts, etc., are used by data engineers to indicate the regions where the sales have happened and in what pattern. In the following stage, the Analysts analyze which areas have had maximum or minimum sales. Analytics also explores why a product was sold more in one place and not so much on other sites. The reasons and factors are identified. Then, the marketing team devises actions based on these factors to improve sales in all areas. Finally, adjustments are made to the marketing and sales to achieve better value for the product and get appreciated sales in the future.
It is clear from this example why reporting and analytics are essential to the success of a business. Every business wants to be successful. Therefore, placing such processes in the operation cycle would benefit the company. Below are some benefits of Reporting and Analytics on a business today.
Benefits of Reporting
Benefits of Analytics
Correlation of Reporting and Analytics
Reporting and analytics are incomplete without each other. The output of Reporting is the input for Analytics. A lot of processed data is useless if it is not analyzed correctly. Similarly, analysis is nearly impossible if a considerable amount of information is not classified and organized in an easily understandable way. These two processes have equal importance in the decision-making stage of business development.
Difference between Reporting and Analytics
Reporting aims at “What” is the situation of a business, whereas Analytics aims at finding out “Why” the business is in a specific condition.
While reporting involves advanced presentation of data, Analytics is the interpretation and deeper insights based on the data.
Reporting data is a more straightforward task as compared to Analytics. Although the amount of data that has to be reported may be humongous, the methods are mostly the same. However, the quality of Analytics would be much better with more innovative or experienced analysts. The quality of these analytics and the actions taken depending on them ultimately add value to the business.
Importance of Reporting and Analytics
Reporting and analytics help to better understand past performance so that you can make current decisions to achieve a better future. Reporting makes it easier to manage the vast amount of data available. The company and its clients could also benefit from the data in the form of reports. This can be used to give a clear picture to the clients of current trends and future possibilities. Reporting is also required as a rule by governments or accounting and auditing authorities. Banks and shareholders of the company also use it to ensure compliance. So, the information in the reports has to be accurate. Tax authorities also depend on these financial statements and reports.
Analytics helps create a picture of a business’s economic health. It helps understand the realities of the company. This is very important to instill confidence in its employees, attract customers and make decisions to improve the condition. It can also be used to compare the results of previous years and the consequences of competitors wherever necessary. Apart from this, Analytics can help understand the cash flow in a business. The investment, the output, and where the money is being spent more (or less) can be found. Similarly, which aspect of our product/service is more profitable can be inferred. Analysis helps to reduce mistakes, and thus more confident decisions can be taken.
Analytics is not mandatory and therefore ignored by several small companies primarily due to the expertise to be hired for this purpose. It is, however, better to pay Analysts so that the company’s returns can be multiplied rather than moving ahead based on unprocessed data and assumptions. Moreover, several tools and software are now available to anybody to analyze data without the assistance of professionals. Businesses often take risks to succeed in their endeavors. But only those who take a well-analyzed, calculated risk survive the challenges in the market.
It can be said without any doubt that reporting and analytics are inevitable for a business in today’s time. Even though reporting may be a mandatory process, it must be done with utmost care and due diligence. Accurate reporting is the leading stone toward refined analytics. The growth and success of a business lie in efficiently setting goals and smartly approaching them with a plan. Value for money invested by a business can be best achieved by engaging in responsible reporting and analytics. Successful business results from a vision for a future, and the calculated steps and risks are a pathway.