What Is Business Analytics? | Business: Explained

Data is a valuable resource in today's ever-changing market. Across industries, professionals collect, analyze, and interpret data to inform decisions and drive organizational performance. This process is known as business analytics. There are four types of business analytics. Descriptive, diagnostic, predictive, and prescriptive. Descriptive analytics serves as the foundation and answers the question, what happened? It does so using current and historical data to describe trends and relationships. Descriptive analytics is especially effective for communicating change over time, such as tracking and reporting a business's website traffic. Diagnostic analytics addresses the next logical question, It helps determine the root cause of trends and correlations between variables. For example, a meal kit delivery company can gather data on why people cancel subscriptions to improve its products and services and retain customers. Predictive analytics answers what might happen in the future. It utilizes past data to forecast scenarios, trends, and events to inform business strategies. For instance, marketers can use prior years data to forecast sales trends and plan campaigns accordingly. Prescriptive analytics answers, what should we do next? It involves considering all relevant data to chart an optimal path forward. Product managers for a new mobile app can employ beta testing to determine which features to include or exclude to optimize the user experience. Leveraging these business analytics types in tandem can provide a full picture of the story data tells and lead to more informed decision making. Do you want to learn more about how data analysis can enable you and your organization to succeed? Use the links in the video description to visit our Business Insights blog and explore our online course, Business Analytics.