4 Types of Business Analytics

4 Types of Business Analytics

1.Descriptive Analytics.

2.Diagnostic Analytics.

3.Predictive Analytics.

4.Prescriptive Analytics.

1. 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.

2. 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.

3. 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).

4. 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.