A: There are a few different types of business analytics.
Descriptive analytics involves using historical data to identify trends within a company’s business processes. Some real-world examples of descriptive analytics would include a content marketing agency reporting on sales data, marketing campaigns, social media usage, and engagement data.
Diagnostic analytics, a deeper version of descriptive analytics, looks into the reasons behind certain outcomes. It means taking data and determining correlations. A real-world example of diagnostic analysis would be a cybersecurity team drawing correlations between employee email password strength and the number of security breaches in an organization.
Predictive analytics means using historical data to determine likely outcomes or events. With predictive analytics, you can employ machine learning and artificial intelligence for more accurate predictions. A real-world example of predictive analytics would be an e-commerce company using data to identify the customers who are most likely to abandon their carts.
Prescriptive analytics is a more advanced form of predictive analytics and is used to recommend actions that businesses can take to reach their goals. A real-world example of prescriptive analytics would be a jewelry company finding out that most of their customers who buy a certain bracelet also buy a particular necklace, and advertising that necklace to customers who only bought the bracelet.
Most business analysts primarily use descriptive and predictive analytics, but the other two types of analytics can also prove valuable for businesses.