The use of data analytics and business intelligence in the financial industry has been rising consistently, especially when it comes to reporting.
While they were previously being used to improve application-based services, the scenario has changed now, and businesses now have a chance to refurbish their strategies and operations.
About 47% of the businesses have already begun implementing data analytics to improve their existing management system.
The ability to process significant volumes of data is one of the major benefits of business intelligence and big data analytics.
Here are a few other ways, big data analytics and business intelligence can improve business valuation.
Evaluating Sales by the Organisation:
For a business to work at its best, and keep doing so, in spite of the changes and challenges it faces, it needs external support.
This support is given by data analytics, increasing several opportunities by considering risk factors, quality enhancements, and internal efficiency of the business.
Let’s take the example of a retail business. A supermarket or a department store might generate a significant volume of sales transaction receipts, which gives the business a golden opportunity to analyse their sales.
It’s not just the volume that matters.
Integrating business intelligence solutions with the data can help the organisation to understand the number of products sold, the type of customers, the peak hours of sales, etc.
This information assists businesses to improve their decision-making process and also highlights the strengths and weaknesses of the company.
According to a research:
About 72% of businesses in 2020 will use data analytics to improve their products and services.
So, analysing big data isn’t about merely addressing questions; it means to converge data in multiple systems to gain more insight from the information.
As mentioned earlier, gathering this information will lead businesses to make smart decisions, which brings us to the next crucial aspect of the improvement we see in business valuation through data analytics.
Fair Valuation:
If you have kept track of what has been happening in the market, then you’d know this. Corporate filers are being targeted for some of the most astronomical financial reporting mistakes.
Why?
Because several large-scale enterprises are vulnerable to overlook the valuation process, especially when the company has valuation needs in different jurisdictions and business units.
How to combat this issue?
With the rise in inspection, corporates are examining the use of data analytics to enable transparency in valuation activities and financial reporting. Not just this, they should be able to make reporting more consistent internally, supportable, and efficient with their investment in data analytics.
It is through this process that businesses find themselves implementing a far more transparent and ethical culture.
Regulatory compliance can also be improved, along with investor relations, the company’s image in the market, and eventually enhancing the business value.
According to a research:
About 29% of the businesses are already planning to use data analytics for better governance, compliance and risk valuation, says industry experts.
With an increase in the business value from one aspect, let’s take a look at how one maintains its name in the market and satisfies the needs of its customers.
Staying Ahead with Satisfied Customers:
The complexity in the financial market is increasing globally in the last decade as compared to the scenario that prevailed before that.
In a situation such as this one, organisations were left with no other choice but to modify their recruitment methods, spike up their technology and bring about variations in other factors as well to keep up with the ever-changing demands of the marketplace.
Do these changes have the effect that organisations were expecting, or do several questions still remain hanging in the air?
They will need to ensure that their infrastructure is concrete enough to accommodate the increased demands and that the management is adaptive enough to look at the bigger picture.
Data analytics enables business owners and C-level executives to gain insights into how to react to risks and grab any of the upcoming opportunities.
Research says, 90% of businesses will hire Chief Data Officers by the end of next year, to enhance their performance.
They need to take the following into account: compliance risk, the efficiency of internal operations and enhanced quality.
Here’s what happens next.
Rising up to the Level of Fulfilling Objectives:
Considering you run a business, you would understand how every organisation has its own set of business goals and objectives.
Today, it has become imperative to leverage data to define purposes and customise it according to company objectives.
In order to transform a business, executives will be required to jot down the existing strategies being used, metrics and data shall be measured, apply data analytics, report the results to the concerned authority members, and finally make the desired changes.
The future shall be bright for organisations who can follow through on this relatively easy plan.
The changes that data analytics will bring about in the business valuation should be tremendous.
Everything Related to the Inventory:
As mentioned earlier, big data analytics and business intelligence help businesses to boost operational efficiency with higher profits.
They permit business managers and owners to have detailed information on operations to eliminate hold-ups. The lesser the people and projects are stuck in a bottleneck, the more business will be able to progress; that’s just plain logic.
Accessibility of real-time information allows finance managers to manage profit margins and ensure to gain maximum gains from the investment into inventory.
After understanding everything that data analytics adds to a business in terms of valuation, there is yet one more aspect where its benefits spread to.
A rise from $15.64 billion to $29.48 billion will be seen from 2016 to 2022 in the global business intelligence market, with a CAGR of 11.1%.
Understanding the Customer Base:
It is crucial to identify profitable consumers.
There is no way that businesses would be okay with letting them go.
This is where sales analysis comes into the picture. It lets organisations improve their profit margin by understanding their loyal customers and formulating strategies to not only have them stay right where they are but keep them coming back.
And then we also have real-time consumer demand pattern, which allows enterprises to keep track of the orders received, products supplied, and of what still remains in their hands.
With a systematised process as such, the result is customer satisfaction. When the said customer data is analysed, business executives would understand the spikes in sales, rates of buying, drop in sales, etc. and businesses can easily store just enough inventory to meet the rising or depleting demands.
It only makes sense for businesses to maintain existing customers, rather than letting them go and beginning the cycle of finding new ones again. Such procedures just add to the cost, depleting the business value.
Business intelligence and big data can be used effectively to ensure that the existing customers are happy and that new ones keep joining the group.
Well then. That’s about it for now.
37% of manufacturers in the Asia Pacific region rely on business intelligence.
For Everything that Comes Next:
With an upgrade in policies of how fair value must be measured, businesses will face challenges that they might never have imagined. Now it doesn’t really matter if the valuation is performed internally or by a specialist.
On the brighter side, businesses will be able to make amendments in terms of managing huge chunks of data related to their business activities and their approach to valuation.
Along with that, the data collection process will be refined. Artificial intelligence, machine learning, and predictive analytics should enable effective compliance and enhanced efficiency.
Of the various processes of valuation, some would be automated, saving time on detailed calculations which can be used to interpret results and finding ways to create shareholder value.
Business intelligence is the first step in adopting analytics, and its solutions are now in demand like never before.
According to research:
Business leaders believe that big data will change the face of how business is carried out; in fact, 85% of them agree to it.
It is a MUST for businesses who want to improve their work processes, decision making and with the insights, improve their business comprehensively.
