Business Analytics Benefits

In the commercial sector, business analytics is a crucial procedure. According to studies, business analytics is utilized to gather information that guides actual business decisions. They are also used to speed up business procedures. It is a procedure whereby a corporate organization examines the information and makes a rational choice (Shanks & Bekmamedova, 2012). Businesses view data as an asset. Business analytics is specifically utilized for data mining. In this method, the idea aids in revealing crucial information that is used to make decisions. Business analytics can be used to explain results in a company, to take a different angle. Business analytics is often utilized in a company to evaluate earlier choices. In addition, the analytics plays a role in forecasting future results. By employing the latest tools, models and techniques, business analytics can help evaluate complex situations, consider all available options, predict outcomes and present critical risks for business decision-makers.

The Exxon Mobil Corporation and Chevron Corporation

The Exxon Mobil Corporation is an American oil and gas entity which is headquartered in Irving. History unveils that the company was formed in 1999. Significantly, it is the seventh largest revenue generating entity across the world. Further, it is the seventh largest publicly traded entity across the world. On the other hand, Chevron Corporation is an American energy entity headquartered in San Roman, California. Notably, the companies use business analytics as the decision making tool. They rely on the entities’ financial data and ratios to measure its performance. Clearly, the firms are driven by their mission statements. They intend to capture an intrinsic portion of the market in the global arena. Based on research, the Exxon Mobil Corporation has captured an approximation of 30% of the global market. Comparatively, Chevron Corporation has an approximation of 25% of the global market. It is an insinuation that Exxon Mobil Corporation has a strong marketing strategy than Chevron Corporation.

Financial Performance and Analytics

Despite the fact that Exxon Mobil Corporation is ahead of Chevron, there is the need for a more competitive approach to maximize its market size. Conversely, the entities’ financial data depicts that Chevron’s revenues increased by 6% while Exxon’s revenues declined by an approximate of 4% as at 2016. However, Exxon’s net profits amounted to $8000 while Chevron had a deficit of $500. The analysis unveils that Exxon’s financial performance is great since relevant profits are recognized. Comparatively, Chevron’s analytics depict that the company incurred high expenses which played a role in minimizing the level of profitability. Further, the companies’ net margin, asset turnover ratio and return on assets ratio depict that they declined in 2016.

Optimizing Asset Management and Decision Making

The analysis depicts that they should adopt new mechanisms of managing the assets so that they can reap relevant returns. The analytics will optimally help the companies to reach their goals (Schläfke et al., 2012). In the first case, they will help them to realize the level that they have reached their goals. The analytics will support the entities’ to evaluate their performance. Conversely, the analytics will encourage the companies to make smart decisions which will influence their return on asset and the asset turnover ratios. However, the companies’ staff faces certain challenges in data analytics. For instance, they may lack enough data to make concrete decisions. Further, the data may be too complex for the staff to understand; thus, undermining the process’s objective. Finally, the staff may not find the data quickly.

References

Schläfke, M., Silvi, R., & Möller, K. (2012). A framework for business analytics in performance management. International Journal of Productivity and Performance Management, 62(1), 110-122.

Shanks, G., & Bekmamedova, N. (2012). Achieving benefits with business analytics systems: an evolutionary process perspective. Journal of Decision Systems, 21(3), 231-244.