Business manager in the 21st century have access to large amounts of information in the form of data . The main goal is bow to use the available data to make big decision .It is from this perspective of informed decision making that we consider why a manager needs to know about statistics . I am listing down key reasons why manager need an understanding of statistics
- To know how to properly present and describe information
- To know how to draw conclusion from large population from the available samples data
- To know how to improve decision making process
- To know how to predict the future outcome
- To know how to prepare , present and explain statistical reports in Layman terms to highest authority and or Clients.
Modern business management is more of understanding the Science of data than an Art. Rising global competition mandates business managers to address uncertainty by using statistical method can improve decision making Process. Understanding data, apply right statistical method and draw meaningful insights are the main activity of today's business manager.
Practical knowledge of statistical concepts helps a manager to solve big problem Based on big data, identify and evaluate alternative courses of action, Predicting error, Observe processes and take right decision to achieve optimum results.
Statistical method are commonly used in the functional area of business : accounting, finance, management, and marketing. Lets understand application of statistical techniques in few domains,
Accounts use statistical techniques to select the sample for auditing purposes and to understand the cost drivers in cost of accounting.
- Banks use statistical techniques to predict the probability of defaulter on loan before offering it based on transactions history and many more parameters .
- By using statistical techniques you can easily identify which Mutual fund category is best to invest.
- By using statistical techniques one can track the trends in financial measures over time
Management uses statistical techniques to improve the quality of products manufactured by company and services delivered by organization.
Statistical Technique for demand forecasting
- Marketing uses statistical techniques to estimates the proportions of customer who prefer one product over another and why they do and to draw the conclusions about advertising strategy might be useful in increase the sales of product.
What's The Path Going Forward?
Most of the managers are having business knowledge or domain expertise they are not from technical , statistical background . Hence managers need to know the right path so they can upgrade them self on trending statistical concept . Theoretical knowledge of statistical concepts is good to have but mangers should be well versed with Practical concept . Right interpretation of statistical results can improve your decision making process and also you can guide your customer in right direction . Domain expertise should choose right course or Right analytical training program . Deriving the report form data one should have knowledge of statistical tools Like R and Python OR SAS. As per our research we always recommend two program for Business managers 1) Data Science with R and Python, SAS 2) Business Analytics course .