What is business analytics, and what are its benefits and applications?
Business analytics is the practice of combining key data about organizational performance to improve planning and performance. Business analytics can be used to evaluate an organization’s overall performance, or specific KPIs that are critical to a business unit, process, project or product.
According to Gartner, business analytics “includes data mining, predictive analytics, applied analytics and statistics, and is delivered as an application suitable for a business user. These analytics solutions often come with prebuilt industry content that is targeted at an industry business process (for example, claims, underwriting or a specific regulatory requirement).”
Business analytics makes extensive use of statistical and quantitative analysis (and, to a lesser degree, qualitative analysis). Statistical analysis identifies trends, with the ultimate goal of employing predictive analytics to determine next moves. Quantitative analysis uses statistical and mathematical modeling, measurement and research to analyze data to determine the effects of a past decision on the business. Quantitative analysis provides hard numbers to help determine how things can be done better in the future.
What Is Business Analytics: Contents
The purpose of business analytics is to gain a complete understanding of the “how” and “why” of past events by identifying, collecting and analyzing key performance data, which can improve the decision making process going forward.
Business analytics solutions make it possible to synthesize historical data across an entire business. Applying business analytics can guide — and accelerate — business decisions and improve performance, helping organizations deliver better customer experiences, improve products, optimize marketing and enhance business processes.
Business analytics turns data into actionable insights that can inform strategic and tactical decisions, such as improving business planning, understanding and enhancing customer loyalty, and improving the performance of a contact center or help desk.
For example, Gatwick Airport uses business data to build a stronger customer experience. By monitoring data from its own systems and social media activity, the airport can more accurately predict passenger flow ahead of time.
Business analysis software tools, from data platforms (such as relational databases) to data visualization (like dashboards), collectively help business stakeholders manage their business operations more effectively.
What is the importance of business analytics?
Business analytics is an important tool for organization seeking a competitive edge in fast-moving industries. Active data analysis for faster, better decision making is seen as crucial to business success. Business analytics software makes it easier for nontechnical users to glean insights from performance data.
Analytics and business expert Tom Davenport has said that business analytics tools “are increasingly making it possible for those without analytical skills to find data and specify the analytics they need. This opens up the possibility of data-driven decision making to many more parts of organizations. This trend started several years ago and will, we believe, continue for many more.”
What are the benefits and applications of business analytics?
The benefits of business analytics include cost savings, resource allocation, process improvement, products and customer experience, and the ability to better meet future needs.
Business analytics solutions make it possible to synthesize key data collected across an entire business, regardless of the source. This lets organizations find the answers they need so that they can make smart decisions quickly. Looking at various industries, business analytics provides significant benefits, including:
Breaking Down Business Analytics
What is the difference between business analytics and big data analytics?
Big data analytics is often used in business analytics and refers specifically to the process of collecting and examining large amounts of disparate electronic data that’s not perfectly structured in a table to find patterns, correlations, trends and other insights. Big data analytics often requires advanced techniques such as predictive modeling, statistical algorithms and predictive, what-if analysis.
What is the difference between business analytics and business intelligence?
Business analytics is the broad umbrella term for the disciplines that support business decision making. Business intelligence (BI) and big data analytics are subsets of business analytics. BI focuses on pure summary rollups; for example, finance might want to know the sum of all customer bookings to see how much money was made in a quarter.
Additionally, operational intelligence (OI), is a collection of business analytics systems designed to exploit data that is generated in real time to aid decision making.
What are the different types of business analytics?
The four categories of business analytics are descriptive, diagnostic, predictive and prescriptive:
How do you get started with business analytics?
Getting started with business analytics requires a strategy. Here are eight key steps, from setting initial goals to developing a culture that values data-driven decisions.
How do you get the most value out of business analytics?
Getting the most out of business analytics may require a cultural shift. When organizations merely buy a tool to “do analytics,” they can be handicapped by cultural obstacles. Improve your business analytics initiative with the following steps.
Analytics tools are essential to a digital world
An ever-increasing amount of data creates an irresistible arena in which to tackle business problems with analytical tools. Leveraging your organization’s data or customer data for a competitive edge will lead to smarter decisions and help your business adapt to an evolving landscape. From improving customer experience and service quality, to optimizing marketing and sales operations, business analytics will help organizations survive — and thrive — in an increasingly competitive environment.