Importance of Statistics in the Business World

Importance of Statistics in the Business World

Although it may not always seem like it, statistics is a very relevant and essential part of any business. Statistics is the backbone and has been for many organizations for as long as they have had to make decisions that could have uncertain outcomes. Business for years have made informed decisions thanks to data, but at the same time, it’s not just the data but the relevance and analysis of this data that can truly help an organization. The best decisions are made when leaders have the right information at the right time. The fact is that this data can be useful for many different actions taken in businesses like marketing a product or service effectively, understanding the competition, or predicting market activities to make decisions that may affect the future of the company. Many departments may be involved in collecting, analyzing and presenting data to the leaders of a company so that decisions can be made, but in many circumstances, the effectiveness of the data will depend on how it’s presented, which you can read more about on the David Kiger Blog.

If we know that it really is an essential part of doing business, then it’ll be just as important to analyze and recognize why that is. Here are some of the reasons behind the importance of using data in a company.

Interconnect information

We may notice different occurrences in a company but never thread the information together to realize the relationships that they may have. By analyzing the data in depth you’ll be able to reveal how what may initially seem like isolated events, may, in fact, be completely related. Recognizing this and understanding the relationship between different events within the company can go a long way to making money-saving decisions. The ability to identify the data and analyze it correctly will make the difference in some instances between a successful and unsuccessful commercial endeavor.

Focus on the right things

An effective snapshot is worth a thousand words, and that is true especially when it can also be worth a thousand dollars. Data that provides an up-to-date snapshot of the company can allow the leader to get the big picture of the organization, and rather than hone in on the most successful product or, on the contrary, the ones with the biggest sales. By understanding the big picture, leaders can make informed decisions that will benefit the company, without wasting valuable time on all of the details. Statistics can offer an unbiased outlook of the current situation of the company and the market to ensure that leaders make the best possible decisions.

Offer solid arguments

Many times corporate leaders need to convince others of their decisions and to do so statistics will definitely go a long way. When leaders present information data, they can not only give their professional opinion but back it up with evidence that can demonstrate why they are taking that particular position. This objective reasoning to taking a risk or moving in a specific direction will pay off when offering others a certain level of assurance when making those big decisions.

Image courtesy of Dvortygirl at Flickr.com

Guarantee quality

The necessity of always improving customer satisfaction through constant statistics is evident to anyone, especially those who have taken part in Six Sigma or Lean Manufacturing organizations. Through statistics, organizations can constantly keep track of their clients’ satisfaction, the number of errors in their manufacturing process, and need to recall products or adjust services. If a company has access to this information opportunely it will most likely be able to save money. Through a reduction in materials used and expenses in warranties, companies can be able to increase customer satisfaction.

Besides all of the reasons already mentioned that demonstrate the importance of statistics in organizations, it is also good to remember that I generate value in different stages of the product. Managers may make decisions in the operations stage, creating an operational value for the organization. This will allow leaders to make decisions or predict possible bottlenecks, or issues that may arise during the operational stage. It also has a strategic value, when data helps managers make tough decisions that will steer the company towards a long-term plan. The research value data holds for managers and leaders, is more ongoing than the previously mentioned. In this case, the constant data presented can help leaders predict customer behavior and create more assertive and effective business and marketing plans for their products. So, at the end of the day when analyzing data and its relationship with businesses in every industry, it’s evident of the effect it can have in everyday decisions, as well as long-term plans, but it will be just as important how the data is presented. The tools used to visually analyze and present the data collected in the different stages will help in many times identify many of the things mentioned in this article. The data on its own is not enough.

* Featured Image courtesy of David Mulder at Flickr.com

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