Types Of Business Analytics – Definition, Examples, And More

The optimal use of data with analytics is assisting firms in scaling their business to the next level. With data becoming the new currency, an increasing number of businesses are becoming data-driven. Organizations can use data analytics to better understand their customers, optimize their advertising campaigns, tailor their content, and improve their goods. While raw data has enormous potential, it cannot be used to its full potential without the right data analytics tools and analytics methods. You require data analytics as a Business or Data Analyst to maximize your efforts to grow a business and achieve its goals. We’ll break down the types of business analytics in this article. Before we go into the specifics of the various types of business analytics, let us first define data analytics.

Many well-known corporations utilize business analytics to personalize product suggestions, make critical business decisions, and gain a better understanding of markets, customers, and business processes. Not only do large corporations spend high amounts on various types of business analytics, but most small firms do as well.

What is Business Analytics?

Humans have gone from manual labor to machines without looking back. The digital age arrived, and every shred of doubt about humanity’s destiny vanished. Business analytics, machine learning, artificial intelligence, deep learning, robotics, and cloud computing have transformed the way we look at, consume, and process information. While several of these advanced topics are still evolving, business analytics has achieved the status of being all-encompassing across functions and domains. Analytics has infiltrated every part of our life. Analytics’ massive wings are impacting everything from how we buy toothpaste to how we live our lives. 

Business analytics encompasses data mining, predictive analytics, applied analytics, and statistics and is offered as a business-ready solution. These analytics systems frequently include prebuilt industry content aimed at a certain industry business process.

Business analytics and data analytics are terms that are used interchangeably. The key distinction is that, whereas data analytics is the offspring of the data boom, business analytics represents a maturation that places data insights at the core of business activities. Over the last five years, nearly 90% of all small, medium, and big firms have established analytical skills to stay relevant in the market and derive value from the insights that vast volumes of data gathered in the digital age can bring.

Business analytics is the process of analyzing historical data and gaining new insights to improve strategic decision-making utilizing statistical methodologies, skills, tools, and practices. This subset of data management systems makes use of business intelligence as well as a variety of approaches such as data mining, statistical analysis, and predictive analytics.

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Various types of business analytics aid in the analysis and transformation of data into meaningful information, recognizing and anticipating current trends and consequences for smarter, data-driven business decisions.

Types of Business Analytics

Business analytics is classified into four types: descriptive, diagnostic, predictive, and prescriptive. The fifth category is cognitive analytics, which uses AI, machine learning, and deep learning. While each of these business analytics categories is valuable on its own, when applied together, they become incredibly powerful.

1. Descriptive Analytics

It analyzes historical data to determine a unit’s response to a set of provided variables. It monitors key performance indicators (KPIs) to have a better knowledge of a company’s current situation.

It Entails the Following Five Steps:

• Choosing which business measurements will properly assess performance against goals
• Identifying required data based on the present situation of the business
• Data collection and preparation employ various methods such as depublication, transformation, and cleansing.
• Analyzing data for patterns to assess the performance
• Using charts and graphs to make data more understandable to non-analytics experts

Descriptive Analytics Examples:

• Summarizing previous events, data sharing, and social media usage
• Reporting on broad trends

2. Diagnostic Analytics

Diagnostic analytics is a sort of business analytics that assists in understanding why things happened in the past. You may understand the driving causes by using drill-downs, data mining, data discovery, and correlations.

This advanced analytics strategy is typically used as a step before Descriptive Analytics to determine the reasons behind certain outcomes in finance, marketing, cybersecurity, and other fields.

Diagnostic Analytics Examples

• Analyzing market demand
• Recognizing technological difficulties
• Customer behavior explanation
• Enhancing the organizational culture

3. Predictive Analytics

It examines historical data trends to determine the likelihood of specific future outcomes. It forecasts the likelihood of events using a variety of techniques such as data mining, machine learning algorithms, and statistical modeling.

Predictive analytics may help businesses improve areas such as customer service, efficiency, fraud detection and prevention, and risk management. It enables you to expand your most profitable customers, improve business processes, and identify customer responses and cross-sell prospects.

Predictive Analytics Examples:

• Customer preference prediction
• Employee Intention Detection
• Product recommendations
• Forecasting personnel and resources

4. Prescriptive Analytics

Prescriptive analytics generates recommendations for dealing with comparable future scenarios based on prior results. For the available internal and external data, it employs a variety of tools, statistics, and ML algorithms.

It tells you what might happen when it might happen, and why.

Prescriptive Analytics Examples:

• Monitoring changes in manufacturing pricing
• Improving Asset Management
• Price forecasting
• Evaluating readmission rates
• Testing Identification

5. Cognitive Analytics

Cognitive Analytics, which combines Artificial Intelligence and Data Analytics, is one of the most recent types of business analytics. It examines the available facts in the knowledge base to get the best answers to the queries given.

Cognitive analytics encompasses a wide range of analytical tools for analyzing massive data sets and tracking customer behavior patterns and developing trends.

Cognitive Analytics Examples:

Using photos, written documents, emails, and social media posts as unstructured data sources.

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Tools for Business Analytics

Business analytics tools enable analysts to complete activities and provide reports that are simple enough for a layperson to grasp. These technologies, which are available through open-source platforms, allow business analysts to handle their insights completely. They are usually adaptable and user-friendly. To be able to apply for business analytics roles, you must be familiar with a variety of business analytics tools and techniques such as Python, R, SAS, Tableau, statistical concepts, and the creation of analytical models.

Professionals competing for business analytics employment should have a solid grasp of business analytics and business intelligence tools. The project and client need to determine the usefulness of data analysis tools. Python, R, SAS, Excel, and Tableau each have their niches in terms of utilization. SQL is one of the most important qualifications for success in data science, followed closely by Python and Java.

Let’s Look More Closely at Some of These Business Analytics Tools:

Python

Because of its general-purpose nature, Python has a relatively regular syntax. Because it emphasizes simplicity and readability, it has a reasonably gradual and low learning curve. Python is extremely adaptable and may also be used for web scripting. It is primarily employed when combining analytical data with a web application or when statistics are to be used in database production. The IPython Notebook simplifies and simplifies working with Python and data. One can share notebooks with others without having to tell them to install anything, which saves code organization overhead and allows one to focus on other important tasks. Python has various visualization libraries, such as Boken, Pygal, and Seaborn, which may be too many to choose from. And, unlike R, its visualizations are complicated and unappealing to the eye.

SAS:

SAS is commonly utilized in most private enterprises because it is commercial software with many online resources. Those who are already familiar with SQL may find it easier to adjust to SAS because it has the PROC SQL option. The program features an easy-to-use interface and can easily process terabytes of data. It comes with rich documentation and tutorials to assist new users to get started quickly. SAS has two drawbacks: Base SAS is working hard to keep up with advances in data analytics graphics and visualization. Even SAS’s graphics packages are inadequately described, making them difficult to use. Furthermore, SAS has just recently begun work on integrating deep learning capabilities, while its competitors are far ahead in the race.

R:

R is open-source software that is fully free to use, making learning easier for individual professionals or students just starting. While various forums and online communities often discuss its use, R can have a very steep learning curve because you must learn to write from the ground up. R’s biggest suit is its graphical skills or data visualization, with access to packages such as GGPlot, RGIS, Lattice, and GGVIS, among others, that enable excellent graphical proficiency. R is gaining popularity because of the addition of a few deep-learning capabilities. 

Tableau:

Tableau is the market’s most popular and advanced data visualization tool. A skilled business analyst’s ability to tell a story and thoroughly provide data insights has become one of his or her distinguishing characteristics. It provides a free public version but requires a paid version for individuals who want to keep their reports and data private. Tableau is an excellent platform for quickly creating bespoke visuals using the drop and drag features. Tableau integrates effortlessly with most analytical languages and data sources, and the visualizations created are platform and screen-size-independent. The disadvantage of Tableau is that it is expensive, particularly for large businesses, and there are currently no version-control solutions.

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Business Analytics Jobs and Their Description

You can compete for the following employment jobs if you have an extensive understanding of business analytics:

• Business Analyst
• Business Analyst Manager
• Data Analysis Scientist
• Data Business Analyst
• Information Security Analyst
• Quantitative Analyst
• IT Business Analyst

Skilled Business Analysts work with many departments to implement and support business information systems. They analyze challenges and possibilities within a company and then give solutions that assist the organization reach its goals.

Collaboration with financial reporting and IT teams to develop initiatives and strategies that save costs and improve internal and external reporting should be covered in a Business Analyst job description.

Business analysts do market analyses, examining both product lines and the company’s total profitability. In addition, they develop and monitor data quality indicators and ensure that business data and reporting requirements are met. It is necessary to have strong technological, analytical, and communication skills.

A typical Business Analyst Job Description Includes:

• Creating a detailed business analysis highlighting a company’s problems, prospects, and solutions
• Budgeting and planning
• Monitoring and planning
• Financial simulation
• Analysis of Variance
• Pricing & Reporting

A Business Analyst is expected to generate new models that support solid business decisions in addition to providing financial and operational modeling. Internal and external reporting should be streamlined and improved, according to a Business Analyst job description. A solid awareness of regulatory and reporting standards, as well as experience in forecasting, budgeting, and financial analysis, as well as a full understanding of key performance metrics, should be required for the post.

The goal is to give financial insights that aid decision-making and align capital and resource allocation within the business budget. In addition, the Business Analyst should spearhead new projects for financial planning and business intelligence technologies.

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Skills Required as a Business Analyst

To become a business analyst, you must have a specific set of skills required for various types of business analytics, just like any other career. Both technical and business abilities are essential, and they are provided below for your convenience. Business analysts are not restricted to a single department, but rather collaborate with many departments. IT, operations, and executives are all served by business analysts. These business analysts have several duties when their job spans across departments, and this necessitates a wide set of talents.

Some of the Top Business Analyst Abilities Required Are:

• Capabilities for Analytical Problem Solving
• Interpersonal and consulting abilities
• Perspective on Creativity
• Fundamental software knowledge and abilities
• Basic programming language understanding
• Database and network comprehension
• Understanding of business structures in the industry
• Knowledge of Relevant Tools, for example:
• Stakeholder Analysis for BluePrint
• Analysis of Cost-Benefit
• Requirements Modeling of Engineering Processes

Candidates for Business Analysts Jobs Should Have These Technical Skills:

Before we begin with technical skills, we first understand why technical skills are important for any type of business analytics. The primary reason for the relevance of business analysts’ technical talents is that they give the organization tools that help detect and address all difficulties, as well as develop solutions to these challenges.

These business analysts aid in the improvement of processes for departments and organizations by examining existing policies and systems and making essential recommendations for the benefit of organizations. They contribute to increased efficiency and lower costs. If business analysts have the technical knowledge and are strong in these skills, they can complete these responsibilities more rapidly and accurately.

Basic Business Analyst Skills

The most fundamental technical capability that every business analyst should have. The business analyst should be well-versed in various office software like:

• Microsoft word 
• Spreadsheets
• Powerpoint presentations
• Charts
• Diagrams
• Email

Understanding of Common Operating Systems:

When you work as a business analyst, you should have a thorough awareness of the many functions and capabilities of the most often-used operating systems.

Understanding of Software Testing Techniques:

A business analyst’s employment may include some software testing. As a result, business analysts must grasp various software testing approaches. They should also be aware of the advantages and disadvantages of various testing procedures. Apart from that, they should be aware of the ideal type of software testing.

The Business Analyst Should Have the Following Basic Knowledge When Testing Software:

• Test cases
• Manual testing
• Test scripts
• Automated tests

Programming Language Knowledge:

Business analysts’ duty is not to sit and create code, and they are not compelled to do so. However, they must have a fundamental understanding of programming languages such as Java, C++, PHP, Python, and Visual Basic. Programming knowledge is required just at the primary level for business analysts because it allows them to assist the organization in identifying problems and determining the best solution or developing the solution for the recognized problem. If the business analysts are proficient in programming languages, they might be valuable assets to the organization.

Database Understanding:

The database should be kept clean for the business analyst. They should be able to compile and manipulate data, and to do so, they should have a thorough understanding of databases and the many types of databases. The following are the database skills that a business analyst should have:

• They should be familiar with relational databases like SQL Server, Oracle, and MySQL.
• They should also be familiar with non-relational databases such as key volume stores, document stores, and broad column stores.
• They should be familiar with cloud databases.
• They should be familiar with real-time databases.

Should Be Able to Solve Problems

Problem-solving abilities are one of the most crucial characteristics of various types of business analytics roles. One of the most important tasks that business analysts conduct is problem-solving. Problem-solving consists of various steps. The first step is to assess the issues from every possible angle. The second stage is to weigh the advantages and disadvantages of the various alternatives presented. The final and most important phase is to forecast the outcomes.

Should Be Able to Communicate Effectively

Business analysts are responsible for working in several departments for various types of business analytics roles. They must collaborate with many professionals from those departments to produce or discover the finest solution for the firm. They frequently serve as a link between technical professionals and uninformed laypeople. Business analysts are expected to express difficult concepts and solutions in simple language or an easy-to-understand manner. During a business analyst interview, recruiters typically watch employees and submit their recommendations to management based on a business analyst’s communication abilities.

Should Be Able to Conduct Thorough Research

Business analysts should also be able to do research for different types of business analytics roles. With the use of research skills, one may investigate issues and determine the root cause of any problem. If a business analyst has research capabilities, he or she can execute the following tasks:

• They’ll be able to ask the appropriate inquiries.
• They will be able to obtain all pertinent information from the necessary sources.
• They will be able to construct a hypothesis.
• They will be able to create detailed reports.
• Should Be Familiar with Software Development Methods.

Frequently Asked Questions

Q1. What are the types of Business Analytics that Companies prefer?

Different types of business analytics are chosen by top companies. They frequently employ many types of business analytics in a step-by-step procedure, beginning with Descriptive Analytics and ending with Prescriptive Analytics.

• Amazon employs descriptive and predictive analytics on historical shopping data from customers to predict the likelihood of a customer purchasing a product. It also uses these techniques to tailor product suggestions.
• Microsoft improves productivity and teamwork using prescriptive and predictive analytics.
• Uber has improved its customer service and employs predictive modeling to forecast demand in real-time.
• Starbucks uses predictive analytics to forecast sales and make attractive offers.
• e cognitive analysis is used by Apple’s Siri, Microsoft’s Cortana, and IBM’s Watson.

Q2. Which Business Analytics is Best for You?

Depending on the requirements, each sort of business analytics plays an important role. However, prescriptive analytics is one of the most significant sorts and is hence preferred by most businesses.

If you want to analyze your company’s daily reporting, descriptive analysis is the way to go.

Predictive analytics is a more advanced way of creating judgments for future situations utilizing ML and deep learning. Instead of data monitoring, use prescriptive analytics to acquire actionable insights and predict the best available solutions. It best meets the needs of healthcare decision-makers in terms of optimizing and lowering manufacturing costs.

Diagnostic analytics can assist you to see what works and what doesn’t for your campaigns when it comes to social media campaign analytics and other digital marketing analytics.

You can apply these four strategies sequentially or straight to prescriptive analytics if you’ve identified the primary area that needs to be optimized to achieve the desired result.

Looking at major firms’ business strategies suggests that prescriptive and cognitive analytics are the front-runners in this spectrum.

Q3. Is business analytics a viable career path?

Yes, business analytics is a rewarding profession. Businesses rely on Business Analysts to deliver crucial insights that can aid in decision-making. Professionals in business analytics are needed in various businesses, including financial institutions and e-commerce companies. Upskilling in business analytics can help you advance in your job.

Conclusion

Corporate Analysts employ various types of business analytics to unlock the potential of raw data to improve business performance: descriptive analytics, diagnostic analytics, predictive analytics, and prescriptive analytics.