Analytics

Analytics is a field of computer science that uses math, statistics, and machine learning to find meaningful patterns in data. Analytics – or data analytics – involves sifting through massive data sets to discover, interpret, and share new insights and knowledge.

What is business analytics?

Very simply put, business analytics is analytics applied to business data. It focuses on the business implications of data – and the decisions and actions that should be taken as a result.

Four types of analytics

There are four different types of analytics: descriptive, diagnostic, predictive, and prescriptive. When used together, this super tool kit can give decision-makers a complete understanding of what is happening, why it’s happening, what will happen next, and what to do about it – in any scenario.

1. Descriptive analytics

Descriptive analytics answers the question “What happened?”. This simple form of analytics uses basic math, such as averages and percent changes, to show what has already happened in a business. Descriptive analytics, also called traditional business intelligence (BI), is the first step in the analytics process, creating a jumping-off point for further investigation.

2. Diagnostic analytics

Diagnostic analytics answers the question “Why did something happen?”. It takes descriptive analytics a step further, using techniques such as data discovery, drill-down, and correlations to dive deeper into data and identify the root causes of events and behaviours.

3. Predictive analytics

Predictive Analytics answers the question “What is likely to happen in the future?”. This branch of advanced analytics uses findings from descriptive and diagnostic analytics – along with sophisticated predictive modeling, machine learning, and deep learning techniques – to predict what will happen next.

4. Prescriptive analytics

Prescriptive analytics answers the question “What action should we take?”. This state-of-the-art type of analytics builds on findings from descriptive, diagnostic, and predictive analytics and uses highly advanced tools and techniques to assess the consequences of possible decisions and determine the best course of action in a scenario.