How Do Statistics Help in Business?
There are a lot of wheels that need to be turning in order for a business to operate smoothly and enjoy a solid degree of success. And while it would be great if everything just flowed along without issues, there will be those times where adjustments, tweaks, and even a change in direction must be made in order to maintain that level of success that the business is used to. But how do you figure out when the time is right to make changes? And the bigger question is, what changes should be made?
This is exactly where statistics come into the picture. Although it’s not a very exciting thing to discuss, once you start to delve in a bit deeper, it becomes clear just how important statistics are in the business world, and it actually doesn’t have to be as confusing or as dull as you may have assumed. It’s time to explore how statistics can help in business.
Data is Used to Make Informed Decisions
The most obvious and common way in which statistics are used by businesses is to make informed decisions. Not only can you make informed decisions, but that information can be used to craft alternate scenarios or options. These scenarios can be laid out with the statistics to back them up, showing how the process will play out, the cost, the time required, employee resources necessary, and so forth.
These alternate scenarios can be used to make big and small decisions that affect the company, which is why it’s so important to always have those valuable and informative statistics on-hand and ready to be used.
Manage Employee Productivity
Another way in which businesses use statistics is to measure and then manage employee productivity. It’s hard to know if you’re getting the best from your employees if you aren’t tracking productivity. This is especially the case in the manufacturing and production industries where you need to be mindful of the number of units produced. The goal is to produce the highest quantity possible in the most cost-efficient manner – which includes how many employees are needed to produce those units, as well as the time needed.
Once you have the basic statistics to work with, you are now able to play around with the numbers, perhaps adding or taking away employees, adding more resources to a particular process or segment of production, or even making the process more streamlined for employees.
Statistics Are Used in Census Surveys that Shed Light
Census surveys are nothing new, and most people understand that they are a way to collect information on a town, city, state, or country’s population size. These can be sent by traditional mailer or even by email. And while you may not think much of it other than it being a way to count the population, those who work in statistics understand just how many layers of data these census surveys can offer.
You can actually read more in-depth information about what a census is, how it is conducted, what data it collects, and by who, by clicking here.
So, how exactly does this information about population matter to those who operate a business? There is actually a variety of ways it can help: the information collected can help you to figure out business applications; it helps to direct how tax dollars are spent which could benefit your company; it will influence your business planning for now and the future; and it even helps to make individual business decisions easier. It’s all about extracting the information that is relevant to the business.
Research and Development is Highly Dependent on Statistics
One element of a business that is highly dependent on the use of statistics is research and development. Keep in mind that research and development doesn’t just refer to product development, but also market research. Some of the best ways to collect statistics for product development and market research include randomized samples of customers and online or mailed surveys.
This type of information can be gathered by a manager, the marketing department, or the product development department, such as researchers. The data is then extracted to help make decisions regarding upcoming product launches.
Statistics Shed Light on Sales
Of course, statistics also help to shed light on sales. It’s one thing to simply report the sales total for any given time but having that data that digs deeper will help a company to make decisions for the future. For example, if sales seem low, why is that? Digging deeper can show where exactly sales dropped, when, what the projected levels were, and so forth. It may be that a company needs to change direction or focus in order to bring those sales levels back up.
Identify Important Trends
Trends are always happening no matter the industry. The key for businesses is to not only be aware of these trends, but ideally you want to anticipate them coming so you can react accordingly. The last thing a business wants is to find itself behind in trends, racing to catch up, and unfortunately probably missing out on sales and success because of the lag time.
So, how do statistics help with trends? By collecting and analyzing the correct kind of data, you will start to identify trends. You can even start to spot the emerging trends if you stay on top of the statistics. If a particular product is starting to become popular in the public, you want to be sure that the business can react to this trend in a timely manner.
These upcoming trends can also signal a change in gears for a company. Perhaps it is dedicating all resources to a particular product or service and not giving attention to the rest of its line-up. If trends show that your other products are starting to gain steam, then it’s time to re-direct resources.
When it comes to everyday real-life, businesses rely on statistics in a number of ways, and use the information to make decisions that affect them in that moment and in the future.