Exotech | In running a business, knowledge of business analysis is one thing that should not be missed. With business analysis, will the business develop well? What is business analysis? What are the benefits for business? Check out the information in the following review.
Understanding Business Analysis
Business analysis is the process of analyzing and evaluating an ongoing business, to determine business developments, risks faced, and future business prospects. Apart from that, business analysis can also be referred to as a way or technique to connect business people so they can understand the structure, policies, operations and recommendations for possible solutions for the company to achieve its goals.
Also Read : What is Meant by SWOT Analysis and Factors and Examples
Analysis in business can be in the form of company data which is used as a reference in making decisions. Through this data, companies can identify what is happening within the company. This includes the reasons why an event occurs, identifying the business, and determining solutions to deal with various problems in the business.
Several important points that need to be underlined when conducting business analysis include the business environment, strategy, finances, resources and how it works. These points will be useful when making decisions about something related to debt, investment, loan extension, and business restructuring.
Types of Business Analysis
Based on the stages, here are several types of business analysis:
1. Descriptive Analysis
A business analysis process that uses KPIs and involves extracting data to find out the current business situation. Apart from describing cause and effect relationships, this descriptive analysis takes the form of exact numbers, such as sales figures or financial conditions, social media metrics, and others.
Information about customer demographics, behavior and interests obtained from social media metrics is an example of descriptive analysis.
2. Predictive Analytics
Predictive analysis is a way of predicting what a company should do in the future. These predictions are taken based on trends. Examples of the use of predictive analysis include:
To find out what types of products consumers are interested in and the possibility of them buying that product again. Predict a consumer's tendency to buy a product using previous data.
3. Perspective Analysis
Perspective analysis is a combination of data from perspective analysis and descriptive analysis. In certain situations, this analysis can help companies make the best decisions and actions. Perspective analysis will predict future events and their solutions.
Example of using perspective analysis: Reduced public interest or purchasing power in product A which is considered outdated. Based on this data, perspective analysis recommends creating new products according to people's interests and providing special prices.
Benefits of Business Analysis
The following are the benefits that make business analysis necessary for companies:
1. Save budget
Not all companies have large operational and marketing budgets, especially small companies. Generally, the marketing budget in these small companies is limited. With business analysis, companies can understand customer desires.
Companies know customer needs, so they can produce creative and innovative product ideas. In this way, companies can compete with competitors and optimize expenses.
2. Accurate in making decisions
Often companies lose money or don't grow because they don't know how to use their marketing budget well. For example, companies that have gone online. Companies cannot choose the best keywords to market their sites online, so marketing is not optimal and does not reach the audience.
With business analysis, companies can predict product trends and appropriate marketing methods according to the moment. So, the company can make the right and accurate decisions for the next steps.
3. Measuring Achievements
The goals and objectives that the company wants to achieve will be clearly depicted in the business analysis. From this analysis, the company can measure the achievement of these goals.
To track company performance against targets, objectives and KPIs (key performance indicators), analytical data can be presented in a visualization manner.
4. Understand the Situation
Business will always move and experience change. Therefore, companies must understand the situation and changes that occur. This is the benefit of business analysis, because companies can track changes in consumer behavior, trends and market shifts through recorded data. Referring to this data, companies can adapt and make changes dynamically.
5. Efficient
In the past, companies had to conduct manual surveys to collect customer data, trends and market interests. Now, this data can be obtained easily and quickly through business analysis data. By using this data, companies can respond in real-time. So, business analysis is the right choice for time and cost efficiency.
Business Analysis Components
The components in business analysis are as follows:
1. Business Environment Analysis and Strategy
Companies can use industry and trade journals, financial news, corporate promotional media, government publications, and websites for industry analysis and strategy.
2. Accounting Analysis
With business analysis, companies can study transactions, accounting policies, and adjustments in the evaluation process. From here the company will know to what extent accounting reflects economic reality.
3. Financial Analysis
Financial analysis presents analysis of the company's financial reports. With this report, the company can assess the company's performance in the future. Companies can also analyze potential profits, risk factors, analyze sources and use of funds.
4. Prospective Analysis
Predict future profits and cash flows based on analysis drawn from financial, accounting, and strategic business environmental analysis.
5. Assessment
From the results of the prospective analysis, an estimate of the company's value can then be made. Companies need to choose a valuation model and calculate the estimated company capital.
Examples of Application of Business Analysis
An example of applying business analysis is the SWOT method. This method is used to evaluate the feasibility of a business or venture. As the name suggests, SWOT (Strength, Weakness, Opportunity and Threats) evaluation in this method includes strengths, weaknesses, opportunities, threats or risks, and speculation.
- Strength is an analysis of strengths in a business, organization or project concept.
- Weakness is a weakness in projects, business concepts, and organizations.
- Opportunities are opportunities for development in the future, which are owned by the organization. SWOT analysis highlights market conditions, competitors, and government policies.
- Challenges or threats that disrupt business effectiveness. This threat or challenge comes from outside the organization.
Conclusion
Without the right strategy, many businesses will experience losses. This is because, they do not apply business analysis. They don't know the weaknesses, threats, opportunities and strengths of the business to achieve their goals. This condition makes the strategy implemented not on target.
Indeed, implementing this analysis is not easy. Therefore, someone who is an expert in the field or a Business Analyst is needed to solve this problem.
Also Read : Differences between Macro and Micro Economics
To become a reliable Business Analyst, you can take courses. This online digital platform provides various online courses that you can choose according to your needs. Each course class will be guided by professional mentors who are experts in their field. So, the quality is beyond doubt!