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CEOWORLD magazine - Latest - Education and Career - Why Statistics are So Important to Modern Business

Education and Career

Why Statistics are So Important to Modern Business

Most companies today will naturally collect a lot of data as they do business; in fact, in the internet age of today, you’d be hard-pressed to find an enterprise that doesn’t collect any form of data. It’s possible these days to gather detailed information about when consumers do anything from open a marketing email you sent them, to accessing particular items on your eCommerce website.

Because of this, statistics play a key role in business; evaluating all the information collected and analyzing it to determine what exactly it means for the company’s operations and strategy can help you get ahead.

How Statistics Affect Performance:

Statistics can be used to analyze and improve many different types of business performance. It may be used to track, measure, and evaluate the performance of:

  • Employees
  • Marketing campaigns
  • Websites
  • Landing pages
  • New products and services

For example, managers may collect data about employee productivity, such as the number of tasks that they have completed or the number of units they have produced. The manager then must analyze this data in order to figure out exactly how productive this employee is, and whether there are any areas that can be improved in order to achieve maximum productivity.

Companies may also compile aggregated statistics regarding employee performance in order to determine when employees are most and least motivated, and figure out what they can do to improve this. For example, if employees tend to be at their least productive on a Friday afternoon, managers know to implement different ways to keep them motivated just before the weekend.

Better Decision Making:

Beyond managing and improving employee performance, managers often need to participate in decision making, either individually or as a joint process with other managers. Statistics help managers to compare alternative scenarios and ensure that the best decision for the company is the one that is taken. For example, statistics can be used to make decisions regarding:

  • Which software programs to implement
  • How many employees to hire
  • Where to market products and services
  • The budget for marketing
  • Business growth and development
  • Whether or not to continue with a new product or service

By collecting and compiling data, and using statistics to better understand these numbers and what they mean, managers and business owners stand a better chance of making informed decisions for their company that produce the best outcome. Managers and small business owners may wish to consider getting an online masters statistics or similar to help them better understand the process and make better decisions on behalf of their business.

The Importance of Data Collection:

Collecting data to analyze and analyzing this data is only an advantage in business if a logical, ethical approach is used. For example, business owners and managers might use statistics in order to determine:

  • Whether or not the performance of a marketing campaign achieved or exceeded predictions
  • If the company achieved predicted sales numbers for the last few products launched
  • Whether a new marketing strategy or sales tactic is having the desired effect
  • If website design and navigation is affecting sales numbers

Using statistics, managers might decide on alternative courses of action, such as putting extra investment into an under-performing product or shifting resources onto a different product.

In some cases, anonymizing customer data, or removing unimportant, confidential pieces of data may be necessary in order to reduce the risk of abuse of data by data consultants or employees or reduce the risk of a data breach.

Privacy laws are becoming increasingly more important in how the storage and use of personal data on consumers or employees are stored and used; it’s important to ensure that the business follows the correct rules and regulations in jurisdictions where they apply.

Market Research:

Finally, companies may also use statistics in product development and market research, either to find out more about their target audience or plan the launch of a new product or service. This is often done using surveys of random consumer sample groups in order to gauge the market for a new proposed product or service. Surveys are conducted and analyzed to determine whether or not there is sufficient demand for the new product or service among the target customers. This could include:

  • Providing customers with a choice of different product ideas to determine which one is the best option to invest in.
  • Offering customers the chance to explore a product prototype in order to gauge interest in it and determine if going ahead with production is worthwhile.
  • Giving customers open questions to help determine where product production should go next.

As you can see, there’s a lot of use for statistics in today’s business world. Without analyzing data, it would be difficult for businesses to reach success.

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CEOWORLD magazine - Latest - Education and Career - Why Statistics are So Important to Modern Business
Sophie Ireland
Sophie is currently serving as a Senior Economist at CEOWORLD magazine's Global Unit. She started her career as a Young Professional at CEOWORLD magazine in 2010 and has since worked as an economist in three different regions, namely Latin America and the Caribbean, Africa, East Asia, and the Pacific. Her research interests primarily revolve around the topics of economic growth, labor policy, migration, inequality, and demographics. In her current role, she is responsible for monitoring macroeconomic conditions and working on subjects related to macroeconomics, fiscal policy, international trade, and finance. Prior to this, she worked with multiple local and global financial institutions, gaining extensive experience in the fields of economic research and financial analysis.

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