Question

In business management, how important is it to learn and use statistics and data analysis to analyze trends, patterns, and relationships for making data-driven managerial decisions?

Answer 1

Statistics and data science is becoming an integral part of the managerial decisions globally. The importance of the same can be derived from a lot of instances.

In any business, the most important part of the business is the Customer - Customer is the King. All the decisions that the management takes are keeping in mind the customer. The business which does not do so is deemed for downfall. Thus all the statistics and data analysis is being focused on understanding the customer and hence the buying patterns of the customer.

E-commerce companies are relying heavily on data analytics because it gives them a trend and shows as to how customers are purchasing, which products should be suggested to them so as to maximize the sale and also cross sell other products. Purchase patterns, relationships among different product purchases gives the company a trend in terms of the geographical and demographic importance and helps them to understand where a particular product is being purchased more so as to adjust the supply accordingly.Thus the impact of all the data analytics is down to the managerial decision in terms of supply, logistical costing, purchase and hence the final order. Thus this was an example of only e-commerce because they as an industry are very heavily deploying statistics and data analytics to understand their customer very well. The business which does this is truly the one which wins, because at the end of the day it is all about customer experience.

Business management professionals need to understand how different analysis from the random needs to be interpreted in the right sense to deploy proper strategies. While data analytics coding in full detail is not essential to be known, because there are professionals for that, but some knowledge would definitely be helpful as the management professional can understand the input, the processing, the output and hence the decision to be taken.