Thalasar Ventures

Decision Analytics is a term that is relatively new to many people and most of you are probably encountering these words used in this way for the first time. Therefore, before looking at some of the areas in which the Decision Analytics tools can be applied to benefit from their use, it is important to begin the discussion by a brief explanation of what Decision Analytics is and how the concept is applied. By definition, Decision Analytics refers to a set of tools used for analysis that can be successfully used in analyzing customer based data. The tools analyze such data and try to identify any of the patterns that are to be found within such data. The results that are eventually obtained can be used by the firm’s management in any of the following important business processes.

a) Business forecasting- The results obtained from the business Decision Analytics tools indicate the trends that are present in the market over a given duration of time. The management staff of the firm can use such information to predict or forecast on what the future trends are likely to be based on the analysis of the trends that have been there in the past. Good forecasting is very essential in making any major business decisions. For instance, the firm may decide to cut down on the production of commodities that have shown little popularity with the customers when the analysis of customer data was conducted. On the other hand, they may be compelled to increase the production of the commodities whose demand they predict will rise in the future.
b) Risk management- The results obtained from the Decision Analytics tool can be used to analyze the kind of risks that the firm is getting into if it chooses a particular path.
c) Resource allocation- Since the management of the firm is better able to understand the needs of the customers; resources can be allocated more effectively. This is illustrated in the sense that the majority of the resources are directed to the areas where the analysis of the customer patterns has indicated there is greatest need or areas where the potential returns are high. The management is able to detect redundant resources which can then be re- allocated for constructive use.
d) Customer segmentation- the customers can be divided into different groups based on the patterns highlighted in the customer data analyzed.

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