What is Business Analytics?
WHAT IS BUSINESS ANALYTICS?
“Analytics alone has made wonders in all fields and is an asset to the organizations who have managed to access it completely”
You are driving to a movie hall and want to make it on time .You access google maps on your smart phone and it tracks the traffic, informs you about the time you will take to reach your destination and suggests you better routes that will make you reach as fast as possible making your life easy.
We usually find toys being placed beside the billing counter in a shopping mall and do not infer much from the setting of a shopping mall but these setups are done purposely to persuade buyers to purchase.
You would like to predict the election results. Results of the exit poll are so accurate with their probability and give you a glimpse of the party that would come on authority before the final results being declared. We mentally predict according to past data and through observation.
WHAT DOES ALL THE ABOVE INSTANCES IMPLY?
-Huge amount of data being processed by advance technologies. It is a simple process, a purchase by Mr. X on Amazon or a blog written by Ms. Y generates a lot of data talking about your preference, about the time consumed to take a decision, information related to price which if utilized properly can generate insights and those insights help tremendously to make strategically decisions.
To generate such insights is where we need BUSINESS ANALYTICS.
Business Analytics is a combination of three parts:
1. Business Analytics is a study of statistical methods such as central tendency, median etc.
2. Business analytics methods once studied are used to analyze data that has been generated.
3. Application of business analytics methods on the data will give rise to insights that will be useful for making strategic decisions.
Business Analytics are of three types i.e. Descriptive, Predictive and Prescriptive.
Research says that in 60 seconds 1 million people log in Facebook, 3.8 million search queries 2.1 million snaps created and so on. This is the amount of data that has been generated and such big data is stored in technologies like data warehousing. Business Analytics is dealing of such big data. Such big data in business has various properties such as: –
1. VOLUME-Huge amount of data or big data is getting generated in business analytics processing
2. VARIETY-there are emails, there are Skype calls which are user interactions and videos so a huge amount of variety is discussed in business analytics processing
3. VELOCITY-It is not just that there is static large amount of data but per minute data is getting generated massively.
4. VERACITY AND VALUE-they are challenges to the organization where the former talks about the genuineness of the data and ensures that the data processed is not fake in business analytics; the later segregates which data is more valuable.
As discussed, Business Analytics explore visualize and communicate patterns or trends in data. Business Analytics is an older term commonly applied to all disciplines, not just business. A typical example of the use of business analytics is the weather measurements collected and converted into statistics, which in turn predict weather patterns. The purposes and methodologies used for each of the three types of business analytics differ. It is these differences that distinguish analytics from business analytics. Whereas analytics is focused on generating insightful information from data sources, business analytics goes the extra step to leverage analytics to create an improvement in measurable business performance. Whereas the process of analytics can involve any one of the three types of analytics, the major components of business analytics include all three used in combination to generate new, unique, and valuable information that can aid business organization decision-making. In addition, the three types of business analytics are applied sequentially (descriptive, then predictive, then prescriptive). Therefore, business analytics (BA) can be defined as a process beginning with business-related data collection and consisting of sequential application of descriptive, predictive, and prescriptive major analytic components, the outcome of which supports and demonstrates business decision-making and organizational performance.
DESCRIPTIVE ANALYTICS-It is the detailed information about the data generated. Example-A grocery market continuously have transactions and the transaction has huge amount of information related to customer, purchases, price etc. and the overall profit the shop made. A common example of Descriptive Analytics are company reports that simply provide a historic review of an organization’s operations, sales, financials, customers, and stakeholders. It is relevant to note that in the Big Data world, the “simple nuggets of information” provided by Descriptive Analytics become prepared inputs for more advanced Predictive or Prescriptive Analytics that deliver real-time insights for business decision making.
PREDICTIVE ANALYTICS-To build predictive models designed to identify and predict future trends. Business analytics is about predicting on historical data. It helps in uncovering oppurtunities.some of the issues faced in business analytics are detecting fraud, optimizing marketing opportunities, improving operations, reducing risk etc. Predictive analytics is often discussed in the context of big data, engineering data, for example, comes from sensors, instruments, and connected systems out in the world. Business system data at a company might include transaction data, sales results, customer complaints, and marketing information. Increasingly, businesses make data-driven decisions based on this valuable trove of information.
PRESCRIPTIVE ANALYTICS-it is a type of business analytics To allocate resources optimally to take advantage of predicted trends or future opportunities. It is a summation of both descriptive and predictive analytics. It ensures that decisions taken on future can give additional advantage. It ensures than future goals are of well standards. It is a type of business analytics.
Having optimal knowledge on domains such as fashion, health care, finance etc. business analytics can be used because technologies and advancement in all domains is required, handling data and making use out of the data is required which is why it was published in an article in 2016 that by 2020 Business Analysts will be the trendiest course available. Business analytics is extremely helpful and a major necessity in all fields.