In all types of business, there is a fine line between success and failure. This is why, so often, having the right information is crucial. Now, more than at any other time in history, it is easy to feel that the key to growing your company and turning profits is right at your fingertips. After all, business people, merchants, and money-makers of the past largely had to rely on hearsay, hunches, and rudimentary calculations to support all of their major decisions.
Today, on the other hand, we have access to a vast wealth of information and data about everything from real-time sales and supply figures and the precise effect of each and every advert we make to customer satisfaction levels and even how various aspects of the global economy might be expected to impact our everyday operations.
Yet with great data comes great responsibility. In addition to the enormous challenge of sourcing, identifying, and interpreting the right information and using it to make the right business decisions, whenever you begin to collect any kind of data, there is also a vast range of ethical, legal, and moral issues to consider.
In this article, we look at how to find the right balance between pushing the limits of data collection in order to identify key business metrics and data that can help drive your company forward and respecting the rights and privacy of the individual.
We also examine how failing to secure your data or comply with privacy legislation can play serious havoc with a company’s reputation and have serious repercussions. In addition, we also see how many forward-looking people in the business world are looking to receive a formal education in the key area of business analytics, the types of courses available, and the importance of lifelong learning in this field.
Table of Contents
A clearer picture
Business analytics is primarily concerned with using data analysis, statistical models, and other forms of analysis to inform business decisions, usually in relation to quantitative data (though there is no rule against also employing qualitative data, where appropriate). Generally speaking, experts in this area use data to uncover patterns, trends, and correlations that can help us understand future events, make predictions, and inform decision-making. Many aspects of business analytics can also be used to track the success and efficiency of existing parts of the business and evaluate current performance.
For example, if a company has a popular product line that is not particularly profitable, they can ask a business analyst to analyze all the relevant data, such as sales figures, manufacturing data, and distribution patterns, to form a detailed, global picture of the current situation and identify any areas for improvement. In combination, the analyst can also use big data to collate information about the market in general, both in terms of its current state and the expected future outlook, taking into account competitor companies, future predictions, and consumer sentiment. This kind of detailed picture can help the leaders in the given company make truly informed decisions about how to move forward with the product line—whether, for example, to ramp up or scale back production, to increase prices, to try to make savings on manufacturing, or whether to completely reinvent the product line.
Business analytics are also crucial in marketing and advertising. If a company does decide to launch a new project or project line, for example, with the ability to identify a prospective market and reach it effectively with exactly the right kind of message, it is possible to increase the effectiveness of any given campaign to a very high degree.
Indeed, through funnel marketing, targeted advertising, and a sophisticated understanding of big data, for example, companies are able to directly reach a specific audience of a few thousand people who they know are likely to be interested in purchasing their product, whereas in the past they might have had to show the same message to hundreds of thousands or even millions of people to get the same results.
Two main fields
Collecting data, however, poses two major challenges. The first is ensuring good data security—making sure that the data you collect is stored in a safe manner and cannot be breached by malicious third parties. This is true even for internal data, where the information is solely linked to raw data from within or closely related to the company, such as units sold per week, cost of delivery, or additional staffing costs for a proposed new factory. Here, it is essential to have the right safeguards in place to ensure that all trade secrets and confidential business information are kept in the right hands.
Even more importantly, any company that stores the data of external partners or customers is also bound to provide safe and efficient storage for this information. Although business analysts need to be conscious of the importance of this area, data security is usually the responsibility of either internal or external cybersecurity experts.
For people involved in business analytics, however, the ethical and legal complications are really crucial when we are concerned with data privacy. Indeed, whenever companies begin more extensively mining the data of the general public in an effort to attain greater efficiency in their industry, there is the potential for misuse.
Ten or twenty years ago, many people were largely unaware of the ability of both businesses and governments to extract and utilize big data for their own ends. In recent times, however, there has been an increasing understanding that this is a sensitive area and that there is a need for the protection of one’s privacy in the face of the unprecedented data-gathering capabilities of modern technology.
The growing concern around privacy issues, particularly online, has led to a wide range of legislation, such as the General Data Protection Regulation (GDPR), applied in the EU, that seeks to limit both the type of information that can be collected by companies and, in particular, how it is stored. Although privacy laws in the US can differ from state to state, any companies that operate across either state or national borders must, in any case, have a global understanding of how to comply with the relevant laws in their areas of operation.
A rewarding but hazardous undertaking
When it comes to areas specifically related to business analytics, there are several challenging areas. Data warehousing, for example, where a data management system performs queries and analysis, typically on large amounts of historical data, must always be performed in an ethical and compliant manner. This is crucial even if the data appears at first glance to be anonymous or so aggregated that the individual contributions are irrelevant. This is because whenever dealing with large or even small amounts of data, it is essential to de-identify all the data contained within.
None of the data can be linked to any personally identifiable information (PII), such as name, address, phone number, social security number, or email address, that would enable someone to tell to whom the data belongs. In this case, even data that is assumed to be anonymous, such as birth date, gender, or zip code, could be used to identify somebody.
This issue is true for any kind of data mining, which involves sorting through large data sets to identify patterns and relationships that can help identify the right path for your business. In addition to ensuring that none of the data contains any visible PII, it is also essential to ensure that any information contained in these datasets has been obtained in a legal manner.
These kinds of issues are more than just moral issues; companies that transgress face the prospect of huge fines and even criminal charges. Though all companies are subject to legislation and privacy concerns, social media companies have tended to take the biggest hits.
Meta, the parent company of Facebook and Instagram, for example, was fined EUR1.2bn by the EU after transferring data collected from EU countries to the US. There is also a reputational risk to poor handling of data. Facebook has suffered a total of eight major breaches or scandals since its launch in 2004, including the Cambridge Analytica scandal, where it sold the data of more than 87 million users, causing both corporate and political harm to the company and helping to pave the way for stricter privacy legislation.
Even worse, in 2013, Yahoo suffered a data breach that compromised the data of an incredible three billion users, an event that saw the company drop in value by $350m USD, a blow from which it has arguably never recovered.
Finding the right balance
The initial wave of success using data garnered from internet sources must have felt to some like a kind of honeymoon period in the profession of business analytics. After all, analysts could source and utilize data at will, with little oversight from regulators and a general public that was still, to a large extent, naïve about the value of their data and the need for online privacy.
The present day, on the other hand, could be seen as a more mature period, where proper, ethical, and secure data collection is seen as a right and a clear expectation, and where companies that fail to carry out analysis in an ethical manner are exposed to serious legal and financial liabilities.
Of course, the best and most skilled analysts are today capable of extracting the most vital and valuable information without exploiting or unduly exposing the individuals whose personal details are contained in the data. For business leaders and analysts alike, balance is key. There is no question that data about, for example, the purchasing habits and interests of the target market for a particular project is extremely valuable.
At the same time, it is essential to learn how to extract and use this data without impinging on anyone’s personal rights. Arguably, legislation like GDPR actually helps analysts, as it removes the temptation to pry beyond what is acceptable and also prevents competitors from doing the same.
Given not only the wide range of laws in the area, the complicated nature of the relationship between data extraction and use and personal privacy, and the constant pressure to produce results that can help drive the company forward, it takes a special kind of mind to become a great business analyst.
Not only must you have a passion for numbers and be highly adept at understanding and interpreting quantitative data to help the company make informed decisions about the present and future, but it is also vital to have excellent presentation and communication skills. Then, given the abovementioned sensitivity of the use of personal data, you must also have an excellent understanding of the current legislative climate and what to expect in the future, so you can make sure that all information provided and utilized is both legal and ethically sourced.
Forming an educated understanding
Fortunately, there is an increasingly wide range of opportunities to receive formal training in the complex world of business analytics, particularly in the world of higher education. While many undergraduate degrees do cover the field of business analytics in some detail, to ensure a high degree of expertise in this complex field, many people who want to build a career in this area look to complete a specialist post-graduate course. A master of business analytics online, for instance, can provide prospective business analysts with the theoretical background and the practical skillset needed to succeed in this area.
With an online master of science in business analytics from St. Bonaventure University, for example, students are able to learn how to become problem solvers who use data to gain real insight into the workings of a company. The university places a conscious emphasis on the importance of ethical decision-making in business and ensures that students graduate with a clear understanding of how to meet new and future challenges in terms of privacy, security, and sustainability.
In addition, students also have the opportunity to experience powerful data analytic software and learn how to communicate effectively using theoretical knowledge of key business solutions, adopting best practices in terms of both analytical techniques and methods of visualization. The fact that these kinds of courses are available online also makes them more accessible for people who are unwilling or unable to relocate to a campus university, while the flexible nature of the course also means you can complete it even if you are in full or part-time employment.
Naturally, even after graduation, specialists in business analytics are well advised to work hard to stay ahead of the game. Indeed, lifelong learning is particularly vital in this profession, where the current legislation regarding privacy is constantly being updated and the technology used to obtain, interpret, and present information is evolving at a rapid rate.
In addition to experimenting with the latest technology and always staying up-to-date with news about their profession, many business analysts are also involved in mentoring schemes, formal training courses, or in-house sessions with their peers that can ensure the knowledge of their chosen profession always remains on the cutting edge.
Stay informed, stay ahead of the game
There is no question that the best business analysts must be extremely proficient at procuring and utilizing data while also bearing in mind the rights of individuals. As we have said, this is more than just an ethical issue; it is a legal necessity, and getting it wrong can have severe consequences for both the individuals and the companies involved.
At the same time, the fact that the industry is now subject to greater regulation and there is a growing awareness of the vital importance of maintaining good data privacy means that, in many ways, this issue is becoming easier to deal with. Indeed, all major companies have already implemented a range of measures to ensure that their data is more secure and compliant. Mistakes still happen, of course, but the positive trend is clear.
Overall, we can say that when it comes to business analytics, data privacy is like any other aspect of the job. After all, in this area of expertise, it always pays to be well-informed. In the end, if you want to succeed in business analytics, fast, short-term thinking is unlikely to get you anywhere.
With data privacy, just like with sales plans, strategy formulation, or marketing campaigns, effective and sustainable thinking is key. You need to have a firm grasp of all the major issues, a clear vision, and work hard to ensure a workable and implementable plan that will benefit the company for many years to come. There is no other path to long-term success.
