4 Types of Business Analytics
1.Descriptive Analytics.
2.Diagnostic Analytics.
3.Predictive Analytics.
4.Prescriptive Analytics.
- Descriptive Analytics
- It summarizes an organization’s existing data to understand what has happened in the past or is happening currently.
- Descriptive Analytics is the simplest form of analytics as it employs data aggregation and mining techniques.
- It makes data more accessible to members of an organization such as the investors, shareholders, marketing executives, and sales managers.
- It can help identify strengths and weaknesses and provides an insight into customer behavior too.
- This helps in forming strategies that can be developed in the area of targeted marketing.
- Diagnostic Analytics
- This type of Analytics helps shift focus from past performance to the current events and determine which factors are influencing trends.
- To uncover the root cause of events, techniques such as data discovery, data mining and drill-down are employed.
- Diagnostic analytics makes use of probabilities, and likelihoods to understand why events may occur. Techniques such as sensitivity analysis, and training algorithms are employed for classification and regression.
- Predictive Analytics
- This type of Analytics is used to forecast the possibility of a future event with the help of statistical models and techniques.
- It builds on the result of descriptive analytics to devise models to extrapolate the likelihood of items.
- To run predictive analysis, Machine Learning experts are employed. They can achieve a higher level of accuracy than by business intelligence alone.
- One of the most common applications is sentiment analysis. Here, existing data collected from social media and is used to provide a comprehensive picture of an users opinion.
- This data is analysed to predict their sentiment (positive, neutral or negative).
- Prescriptive Analytics
- Going a step beyond predictive analytics, it provides recommendations for the next best action to be taken.
- It suggests all favorable outcomes according to a specific course of action and also recommends the specific actions needed to deliver the most desired result.
- It mainly relies on two things, a strong feedback system and a constant iterative analysis.
- It learns the relation between actions and their outcomes.
- One common use of this type of analytics is to create recommendation systems.
