Business analytics is a great way to help your organisation make better decisions, but it can be a complex process — and it’s often confused with similar concepts. In this article, we’ll go over everything you need to know about business analytics, how it’s performed and the tools you can use. Plus, we’ll explore the differences between business analytics and related concepts.
Here are the main points we’ll cover:
- What business analytics is
- Types of business analytics
- Business analytics vs. data analytics
- Business analytics vs. business intelligence
- Business analytics vs. data science
- Using business analytics in decision making
- Benefits of business analytics
- Performing business analytics
- Business analytics tools
- Skills and careers in business analytics
Business analytics defined
Business analytics involves examining specific datasets designed to help businesses make accurate decisions that usually result in improved efficiency and higher profits. It uses data science to build models that help inform decision-making to improve organisational processes through a variety of methods.
There are four primary types of business analytics to be aware of, which we’ll go over in more detail:
There are four primary types of business analytics to be aware of, which we’ll go over in more detail:
- Descriptive
- Diagnostic
- Predictive
- Prescriptive
Within those types of business analytics, there are several different tools and methods you can use, including data management, data visualisation, predictive modelling, data mining, forecasting simulation and optimisation.
A closer look at types of business analytics
Let’s dig into the details of each type of business analytics a little more.
Descriptive analytics
This involves using historical data to track KPIs to identify current trends within a company’s business processes.
Diagnostic analytics
This is a deeper form of descriptive analytics that investigates the reasons behind certain outcomes by determining correlations between datasets
Predictive analytics
This 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.
Prescriptive analytics
This is a more advanced form of predictive analytics that’s used to recommend actions businesses can take to reach their goals. Most business analysts primarily use descriptive and predictive analytics, but the other two types of analytics can also prove valuable for businesses.
Business analytics vs. data analytics
With business analytics, to a large extent, you’re using the same technologies as data analytics.
But though both types of analytics employ the same types of tools, business analytics is more focused on existing workflows and processes that pertain to business-informed decisions.
When reviewing data, a business analyst looks at things like purchase processes, revenue optimisation and other ways to improve business processes.
On the other hand, data analysis is performed by data scientists and is the broader, more technical part of the process.
Business analysts aren’t as technical as data scientists. Data scientists transform data, then business analysts take the transformed datasets and communicate information to other parts of the organisation about how to optimise existing processes and metrics.
Data scientists take deep dives into data, determining trends and connections. Business analysts translate that work into useful insights about organisational processes.
Business analytics vs. business intelligence
Most of the time, business intelligence (BI) is just data visualisation. But this data is historical data — it doesn’t determine future outcomes but informs them of past occurrences. BI is primarily used to analyse practices and processes to find opportunities for improvement.
This is where business analytics is different from business intelligence — because BI is only for descriptive reporting, not making predictions.
Business analytics can be used for diagnostic and predictive insights, while business intelligence cannot. It could be said that business intelligence is just an aspect of business analytics.
Business analytics vs. data science
Data science is the high-level discipline of studying and interpreting data using statistics, algorithms and technology. It’s focused on using data analysis, data visualisation, artificial intelligence and machine learning to accomplish certain goals. In other words, it’s the category under which business analytics sits.
Where data science is a general discipline that can be applied to any situation beyond business, business analytics is focused on using data to identify business needs and solutions.
Using business analytics in decision making
Business analytics is a huge help to people who make decisions across organisations. Rather than going off of feeling or instinct, leaders and practitioners alike can base decisions on data and past performance.
Here are a few examples of how you can use business analytics to improve your decision making.
1. Personalise customer experiences
Possibly the top thing business analytics helps people do is improve customer experiences and make them more personal. By tapping into business analytics, you can uncover the habits, behaviours and thoughts that drive consumers to purchase. With those insights, you can then tailor journeys based on those behaviours to predict future actions. Plus, it’s then easy to change plans to always drive toward success.
2. Boost performance
Equipped with insights from business analytics, you can start tracking progress and performance, which in turn can help you to increase your metrics’ performance. You can also use it to measure internal metrics to help you to allocate the correct resources, improve employee satisfaction and increase overall performance.
3. Improve market intelligence
Business analytics also provides you with valuable market insights, such as competitor analysis, market segmentation and demand forecasting. With this information, you can start to identify market opportunities that will help you stay ahead of competitors and make informed strategic decisions.
4. Innovate products and services
As you uncover valuable insights with business analytics, you’ll start to get a better view of customer needs, market trends and product performance. You can use these insights to plan out the next steps for your product development, so you can innovate and customise what you sell to meet customer needs more effectively.
5. Build and evaluate strategies
Finally, with business analytics, you can evaluate different scenarios, assess the potential impact of your strategic initiatives and make informed choices that are aligned with your organisational goals.
The benefits of using business analytics
Beyond great decision-making, business analytics offers plenty of other benefits.
By using it to identify opportunities for improvement in your processes, you can tackle issues before they become bigger problems. Things like bottlenecks or other inefficient points in your workflows can be a thing of the past.
You can also use it to improve your overall campaign performance, by tapping into performance metrics. As a result, you’ll see increased profit and employee productivity.
Plus, business analytics and help you to identify emerging market trends and customer demands to develop new, leading-edge products or services. This will help you to capitalise on new revenue opportunities and stay at the forefront of your industry.
How to perform business analytics
To get started, you’ll want to determine the goal of your data analysis. It could be improving operational efficiency, optimising marketing strategies or enhancing customer satisfaction.
Next, choose the right methodology to analyse the data, whether that’s predictive modelling, data mining or something else.
Once you’ve built your plan, start collecting your data. From there, you can import your data into your data warehouse. You should also have proper data management tactics to keep things organised.
After you have your datasets, a team of data scientists explores the data and prepares it for visualisation with a data visualisation tool.
Once the data has been visualised, a team of business analysts can use methods like descriptive and predictive analytics with analytics tools to gain business insights.
Then they can present their findings to the appropriate stakeholders, who can make business decisions based on those data insights.
Tools you can use for business analytics
There are plenty of tools available to help you to get started with business analytics. Here are a few examples of what these tools can help you to do:
- Automate trend forecasting. Take the guesswork out of your processes and predict future trends and changes in consumer behaviour, market dynamics and more.
- Use machine learning to analyse data. Free up your teams’ time by letting machine learning take over the sifting, automatically surfacing the insights you need.
- Create data visualisations. Turn insights into compelling visuals that you can use to sell ideas or pitch new decisions.
- Perform statistical analysis. Collect, organise and interpret swaths of data to find the patterns, relationships and insights you need to build your future.
One tool that you can use is Adobe Analytics, which allows all your teams to visualise data in real time, quickly understand what your data is saying and share analytics across the entire organisation.
Skills and careers in business analytics
As business analytics becomes increasingly prevalent in companies around the world, the demand for related roles is also increasing.
If you’re interested in a career in business analytics, you’ll need to balance both technical and communication skills. Specifically, you’ll want to focus on critical thinking, communication and problem solving, bolstered by a strong knowledge of analytics tools, software and databases.
With those skills, there are several roles you can pursue, including management analyst, operations research analyst, market research analyst or financial analyst.
Get started with business analytics
Business analytics uses data to empower you to make more informed decisions about your organisation’s operations. Whether you’re building amazing customer experiences or improving internal workflows, business analytics can help.
When you’re ready to get started, decide which type of business analytics you think your business could benefit, whether that’s descriptive, diagnostic, prescriptive or predictive.
Adobe Analytics gives you real-time, actionable insights so you can make decisions using the best data available. With Analytics, you can gather data from multiple channels, perform complex analysis and visualise information to give you the knowledge you need to improve your organisation’s processes and productivity.
Request a demo to learn more about how Adobe Analytics can help you to make smarter decisions for your organisation.
