What is Business Analytics?
Business analytics focuses on the larger business implications of data and the actions that should result from them, such as whether a company should develop a new product line or prioritize one project over another. The term business analytics refers to a combination of skills, tools, and applications that allows businesses to measure and improve the effectiveness of core business functions such as marketing, customer service, sales, or IT. There are three main kinds of business analytics.
- Descriptive analytics answer the question, ‘What has happened?” This type of analytics evaluates historical data for insights on how to plan for the future. Thanks to the widespread availability of self-service data access and discovery tools and dashboards, executives and non-technical professionals can reap the benefit of insights generated by big data to improve business performance
- Predictive analytics is the next step on the path to insight. It uses machine learning and statistical techniques to help businesses anticipate the likelihood of future events. However, because predictive analytics is probabilistic in nature, it cannot actually predict the future; it can only suggest the most likely outcome based on what has happened in the past.
- Prescriptive analytics explores possible actions to take based on the results of descriptive and predictive analysis. This type of analytics combines, mathematical models, and business rules to optimize decision making by recommending multiple possible responses to different scenarios and tradeoffs.