What is business analytics and how many types of business analytics are there. When some new people jump into a new business then they get stuck on to this pre mentioned question. If you have any such question in your mind, then you are going to get all your answers in this article. One of the most important thing is that a new businessman must know how business analytics works. Most people know the meaning of analytics. But still, for those who do not know, let us tell you that analytics means analyzing something and then working according to that. Analytics means reading any kind of data, capturing information about it, then working accordingly.
In business too, analytics plays a very important role. In fact, there are mainly four types of analytics in business. If any company works according to these four types of analytics together, then the chances of its success increase to a great extent. These four can provide solutions to every problem of any business. From what is going on in the business to what the business needs to do in future, you can find out all these things with the help of these four types of analytics.
The four types of business analytics are-
- Descriptive analytics
- Diagnostic analytics
- Predictive analytics
- Prescriptive analytics
All these four types of analytics are equally important for any business. No one can point out the better type from the four of them. And also no one can ignore any of them. Actually these four are somewhere interrelated to each other. But they offer different insights. Let’s have a discussion about them individually.
Descriptive analytics- First Types of Business Analytics
Descriptive analytics is quite simple to operate. We all know there is huge amount of data available in every sector. Using these data we can get the information and also an idea of the sector we are going to work in. Studying existing data is very important when you are new in the business. Describing or summarising the existing data using business intelligence tool is what we call Descriptive analytics. Somewhere, data mining is also part of descriptive analytics.
Most people in business use this type of analytics. This is because in every type of business it is necessary to anslyze the previous data and understand it and do the work accordingly. Success is achieved only after understanding the research and data available and working accordingly. By using the previous data, the company can get a lot of information about its customer. Here the company can find out what type of product their customers are liking and which type of product customers are not liking.
Diagnostic analytics is also an important thing to succeed in business. Through this analytics, any company analyses and works on the basis of its past performance. This analytics comes to us as an important analytics because through this the company can learn from the mistakes made by it in the past. This analytics characterized by techniques such as drill-down, data aggregation, data discovery, data mining and correlations.
If any company does not analyze its past performance, it will not be able to know where they have made mistakes. Therefore diagnostic analytics is an important type of business analytics. This analytics helps us in knowing what was the reason behind all the things that have happened in the past. Through this analytics, we can understand the data even more deeply. As an example, we have seen that sometimes the company produces a data on its last year’s sales or earlier, then prepare a strategy and work according to thay. This is called diagnostic analytics. With the help of this, we can get information about what is the reason for profit in any business and what is the reason for loss.
Predictive analytics- Third Types of Business Analytics
It is the type of analytics that predict the future outcome of any business through some machine learning techniques. If you guys thinking that using this analytics you can get to know the event which will happen in the future, then you are wrong. Actually this analytics predict the possibility of occurrence of any event.
This analytics uses the existing data to predict the future outcome. According to predictive analytics, we process the existing data and then predict the possibilities of any event in the future. The predictive analytics technique is based on the existing data. There is no other method through which we can perform this analytics.
This business analytics is also a kind of predictive analytics. Prescriptive analytics, as we know from the name itself, provides us with suggestions to do the following events in the future in one or more ways. If seen, it can prove to be most effective in all four types of business analytics.
Through this analytics we get to know what can be the outcome of the work we are going to do. This will enable us to know whether the action taken by us is going to benefit our business or harm our business. So if we want profit in our business, then we must use prescriptive analytics.
So if there were any of you who did not know anything about business analytics, then today you probably would have got the right information about all these things. Business analytics is the only way through which you can transform your small business into a big business in a short time. The only meaning of analytics is that by properly analyzing all the previous data, improve your performance and improve it in the coming time.
Appropriate all four types of business analytics are considered very important for any business. If you want to achieve success in a short time, then you must know how to use all four types of analytics at the right time. Only with the help of business analytics can any business be made big.
It has been seen many times that hastily many businessmen use prescriptive business analytics first. But one who has less knowledge about this analytics should not do so. Taking any step without knowledge can prove harmful to your business.