Do you know the three basic types of law firm analytics?
If not, business experts say you’ll have difficulty reaching your law firm goals.
“Business analytics, also known as data analytics, focuses primarily on future growth and events,” according to business writer Kayla Harrison. “It is the study of skills, technologies, and practices of business operations in the past to optimize future progress and evolution.”
Wade through that dense definition, and you arrive at this insight: business analytics help you make better decisions.
Below are takeaways from the article, “How Analytics Affect Business” in the U.S. Chamber of Commerce online publication CO.
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- What are the three types of commonly used analytics: (a) Descriptive analytics, which tracks KPIs; (b) predictive analytics, which analyzes the possibilities of certain outcomes in the future; (c) prescriptive analytics, which provides recommendations on how to solve problems based on past data.
- Where does the data come from? From your law firm’s real-time activities and operations, primarily. Other sources: customer information, product outcomes, and sales.
- Business analytics improve decision-making. “The process of analyzing data enables businesses to identify potential situations they may encounter in the future, which helps them make better-informed decisions and set reasonable goals,” writes Harrison.
- Business analytics increase efficiency. “With the help of automated processes and software, the process of data mining and analytics is much faster. Users are able to view visual reports, monitor progress, and streamline operations.”
- Business analytics reduce costs and increase revenue. “Business analytics help identify unnecessary expenses, as well as areas that may require more financial support,” according to Harrison and CO. “Businesses can also view areas to improve so they can gain customers, refine products, or make other changes.”
- Analytics are subject to human error. “In addition, there may not be enough data to collect, or the data may be complex.”
- Watch out for security issues. “There are potential security risks in using business analytics due to the sharing of data collections or analyses,” per CO. “Anyone in the business can access customer information, such as transactions or purchases.”
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