Proper insight and understanding of data are helping businesses of all sizes navigate their way through digital transformation. It can be an overwhelming task to comb through tedious and copious amounts of data for proper business intelligence, but a better data management system puts companies on a better footing for the road ahead. That’s where business analytics and a grasp of data visualization are leading to game-changing procedures that are making for better business decisions.
What is business analytics?
Gathering and processing business data may be overwhelming, but it’s the analysis of data that can deliver the answer to many business problems. Business analytics apply statistical models that translate data into insights. This combines processes, skills, and technologies to collect, analyze, and present the historical performance of a business. The end goal: Driving business planning. Business analytics essentially use large amounts of historical data to evaluate company performance. This reveals previously unknown patterns and trends to identify unanticipated issues to generate new business value.
This brings information and expertise to help guide business decisions, and create an “information advantage.” With business analytics, you can turn big data into insight, building statistical models to make better projections about a business. This allows organizations to pitch ideas based on these new insights, and advise management on business decisions regarding current and future events. Organizations are able to leverage data to influence business outcomes, choosing opportunities to prepare companies for any level of risk that may be presented.
Types of Business Analytics
There are four types of business analytics: Descriptive, diagnostic, predictive, and prescriptive. Descriptive analytics offers a rearview look into the past through the data of the present. This is usually performed in the preliminary stage of data processing to create a summary of analysis through data mining and data aggregation. Most businesses perform descriptive analytics through things like inventory and workflow.
Diagnostic analytics enable machine learning, using it to find interesting patterns and correlations, even without a user asking specific questions. Diagnostic analytics uses techniques like probabilities and data mining to uncover root causes. When addressing real-world business problems, this form of analytics does offer context into how business operations can move forward.
Predictive analytics is focused on forecasting the likelihood of potential outcomes and events within a business, modeled on historical data. Predictive analytics uses statistical modeling and machine learning to find patterns that spot trends and detect risks. This offers a confidence level for organizations to look into the future to save and earn more revenue, helping to forecast inventory and maximize sales quotas. Inventory forecasting methods help businesses understand exactly how they can scale their business as they grow and reach a wider range of customers.
Prescriptive analytics is the most mature stage of the business analytics journey. It tells a business what they should do, allowing for confident decisions in recommending the next step in business processes. Prescriptive analytics is related to descriptive and predictive analytics focusing on actionable insights rather than just data monitoring through deep learning.
Benefits of Business Analytics
Organizations seek to find and sustain a competitive advantage by creating an information advantage over business rivals with business analytics. This advantage helps companies respond through proper business intelligence solutions for an advantage in today’s marketplace. It also helps to make analytics more business-friendly, giving business professionals the opportunity to effectively understand their company’s data, leading to higher returns from information and expertise investments.
Business analytics is a subset of business intelligence, the first step towards understanding the inner workings and status of companies of any size. Business analytics explain why your business is where it is, while BI concerns more with routine reporting and informing long-term business plans. With the right business analytics tools, organizations through a variety of sectors can better their supply chain, customer experience, and experience a competitive edge never experienced before.