How can businesses use big data analytics to reduce expenses?

For any businesses, expense reduction is as important as revenue increase. In the digital era when enterprises are more dependent on technologies in their business operations. Therefore, they should also rely on technologies to reduce their costs. Among those solutions, data analytics can be a great help to organizations who are utilizing them in their business processes.

Here is how that can happen:

Big data analytics help reduce employee turnover

Unless employees are working inefficiently, no organizations like high employee turnover rate. It is expensive to recruit new blood and not productive to replace experienced/trained employees with new recruits. Work Institute estimates that by 2020, businesses will spend $680 billion in turnover costs; however, companies can avoid 77 percent of their turnovers.

The solution is to use analytics in the recruitment process. HR can check for the candidate’s compatibility with the company’s culture and the requirements of the position with insights from big data analytics. The approach is also helpful in identifying the existing issues with current employees to resolves the problems as soon as possible.

Big data analytics can control indirect costs

No businesses can survive without indirect costs. Although these expenses are not directly related to the company’s products, they are necessary for the operations of the business. According to some studies, enterprises can save up to 25 percent of the overall expenses by effectively managing and reducing indirect costs.

The process starts with understanding the spending and big data analysis is one of the most powerful tools when it comes to getting to know the insights of anything. With big data analytics, businesses can identify their biggest indirect expenses, then work on a solution to cut down the costs.

If businesses can combine big data and IoT solutions, they can control indirect costs of small items likes a lightbulb. Big data analytics allow companies to control the smallest indirect expenses to maximize the efficiency of the spending reduction strategy.

Big data analytics decreases the risk of customer complaints

Many businesses spend a lot of money on resolving customers’ complaints. It can be a great loss to a company; however, if the company doesn’t give a suitable solution to the problem, they are risking losing at least one customer. That is also a serious issue for any business. According to Forbes, businesses could lose more than $75 billion a year from inferior customer services.

More analytics tools are developed to identify the mood switch of customers in order to give the customer service staff more clues to response to the caller. New solutions are also adopted to help the customer care team see the entire story of the customer when receiving the case from other staff. That avoids the instance of customers having to repeat their explanation every time they are redirected to other departments.

The less frustrated the customers are, the more likely they are to agree with the company’s solution. Hence, the faster the case is solved and the cheaper the solution is.

Source: https://insidebigdata.com/2019/02/24/6-ways-companies-are-using-data-analytics-to-reduce-expenses/

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