What business analytics offers
The definition of business analytics is exactly what it sounds like: Any software or solution that discovers and evaluates business data with a combination of skills, technologies, and practices to conduct a statistical analysis.
IT analysts and business intelligence (BI) managers use business analytics with tools that review complex processes, algorithms, and broader data sets. Business analytics tools serve as any applications or software solutions that inspect and analyze business data while presenting any possible solutions.
Having the right business analytics tools helps your company gather the right information needed to understand past developments, predict future events and its subsequent possible challenges, and find a way to turn those hurdles into actionable items that result in positive business accomplishments. Some elements of business analytics include:
- Data aggregation
- Data mining
- Text mining
Using digital tools helps take your data analysis to the next level so your company can better define its future.
Why your team needs business analytics software
As business analytics software is used to retrieve, review, and analyze data, you want to be able to plan for the unexpected—not an easy task with just a few numbers handy. As such, most BI managers and IT analysts utilize more than one business analytic tool for their metrics’ analyses as very few solutions can do everything you need.
Predictive data modeling tools, statistical software and data mining tools, and others can be used together to give a holistic view of your business’s data to uncover key insights and make resourceful decisions.
Reasons why managers and analysts use business analytics tools are to:
- Understand business performance.
- Explain the results from your data and why they happened.
- Identify weaknesses.
- Fix potential problems before they arise.
- Alert decision makers to potential events that may affect the organization.
- Forecast results based on possible business decisions.
As a result, business analytics tools provide insights into how you can achieve your business goals, stay competitive, stay compliant, and satisfy managers and analysts.
Types of business analytics to help achieve your business goals
When evaluating the data from your business analytics software, you have four types of analytics available to help decide your business goals and decisions. Each type of analytics is used to achieve a different business objective.
- Descriptive analytics: These analytics interpret past data and KPIs to identify trends and patterns.
- Predictive analytics: By using statistics to forecast future outcomes with statistical models and machine learning techniques, these analytics provide context and clarity for future decisions.
- Diagnostic analytics: By focusing on past performance data, these analytics decide which data element will influence specific trends and the possibility of any future events—created from techniques like data mining and correlation.
- Prescriptive analytics: These analytics build on descriptive and prescriptive analytics to recommend specific actions that ensure the best or most profitable customer reactions and business outcomes possible.
Business analytics vs. business intelligence
It’s not uncommon for business analytics and business intelligence to be confused with one another as both focus on the collection and dissection of historical data. They both accomplish different objectives, so you’ll need to first decide your goals before committing to a tool. The difference between the two is business intelligence uses reporting techniques to find past and current information while introducing this data to users in a visually appealing format, and business analytics focuses more on the future of a business and how that data can help.
Choosing tools geared towards business analytics instead of business intelligence will work for you if you’d like to:
- Visualize the future performance of your organization.
- Explore and manipulate raw data with the help of data analysts.
- Forecast the possible results of opportunities.
- Use more predictive measures for creating successful business events.
If you’re looking to simply aggregate past and present statistics to easily display results with a data visualization tool while creating your own narrative around the data, choose a business intelligence tool rather than business analytics to make sure you’re getting the right information you’ll need for your team.
Business analytics is a more advanced method of providing context to raw data—which could also be lifted from BI software—and offer readers a glimpse of possible events and their outcomes, as well as set future expectations. Establishing a set of business analytics best practices will help set these expectations and ensure your business works efficiently.
Building a strategy for your business analytics best practices
Creating a successful business analytics strategy works once you’ve determined your best practices and put them into action. Here, you’ll be able to gather the information you need to ensure you’ll make better decisions. Below are four steps to help build your best practices.
- Define every intended business goal.
- Benchmark what success means for your business, as well as identify opportunities for improvement.
- Validate necessary models used for your success and failure criteria.
- Designate a methodology of how you’ll choose the fundamental data, and figure out the external and internal factors you’ll need to make an accurate prediction.