For the last few months, I’ve been looking at linear regression and trying to understand what it is and why it appears so much in business analytics courses. It has something to do with mathematics and statistics, but the only word that I really understood in it was linear.
I’m still not sure I understand it much better today than I did a few months ago, but at least I’m closer to being able to use it.
I’ve started this particular course and have successfully reproduced a linear regression model in Excel. So far it seems that a linear regression model is just a simple formula with special variables developed from a pre-existing data set.
For example, if you have a data set of historical sales along with some reasonably linked figures, such as marketing spend, you can use that data to create a variable that will predict in the future what your sales will be based on future marketing spend.
It seems to me that knowing about and using linear regression would be ideal for preparing budgets and forecasts, but I’ve only been exposed to it this year, despite having worked with budgets and forecasts way before now!
Just goes to show that when you are overloaded with low-level tasks, such as consistently churning out reports that should really be automated, you can miss out on better solutions and opportunities that are out there.
I’m not saying that I didn’t gain anything from my experience in reporting, far from it, my last job has been the best job in my career so far (besides this one, but I’m still evaluating it!). But there is a point when you need to get out of the mundane day-to-day stuff and branch out, otherwise you could be missing out on some big improvement opportunities.
Right now I can think of two cases when I could have used linear regression to get better results in my regular work, if only I had known!