Today, in this blog we will learn some basics of business analytics. Furthermore, we will discuss the pros and cons of business analytics that you need to know.
From manual effort to machines, there has been no looking back for humans. In came the digital age and out went the last iota of doubt anyone had regarding the future of mankind.
Business Analytics, Machine Learning, AI, Deep Learning, Robotics, and Cloud. These areas have revolutionized the way we look, absorb, and process information. While there are still ongoing developments happening in several of these advanced fields. Business analytics has gained the status of being all-pervasive across functions and domains. There is no aspect of our lives untouched by Analytics.
Business analytics (BA) is a set of disciplines and technologies for solving business problems. It uses data analysis, statistical models, and other quantitative methods. It involves an iterative, methodical exploration of an organization’s data. It emphasizes statistical analysis, to drive decision-making.
Data-driven companies treat their data as a business asset. They actively look for ways to turn it into a competitive advantage. Success with business analytics depends on
- Data quality
- Skilled analysts who understand the technologies and the business
- A commitment to using data to gain insights that inform business decisions.
The main components of a typical business analytics dashboard include:
1. Data Collection:
Wherever data comes from, be it IoT devices, apps, spreadsheets, or social media. All of that data needs to get pooled and centralized for access. Using a cloud database makes the collection process significantly easier.
2. Data Aggregation:
Prior to analysis, data must first be gathered, organized, and filtered. Either through volunteered data or transactional records.
3. Data Mining:
Data mining for business analytics sorts through large datasets. It uses databases, statistics, and machine learning to identify trends and establish relationships
4. Association and Sequence Identification:
The identification of predictable actions. Those that are performed in association with other actions or sequentially
5. Text Mining:
Explores and organizes large, unstructured text datasets. It does so for the purpose of qualitative and quantitative analysis
Analyzes historical data from a specific period in order to make informed estimates. These are predictive in determining future events or behaviors
7. Descriptive analytics:
What is happening and why is it happening? Descriptive data analytics answers these questions. In this way, it builds a greater understanding of the story behind the data.
8. Predictive Analytics:
Predictive business analytics uses a variety of statistical techniques to create predictive models. They extract information from datasets and identify patterns. They also provide a predictive score for an array of organizational outcomes
Once trends have been identified and predictions have been made. Businesses can engage in simulation techniques to test out best-case scenarios
10. Data Visualization:
Provides visual representations such as charts and graphs. It makes the data analysis easy and quick.
4 Types Of Business Analytics
There are mainly four types of Business Analytics, each of these types are increasingly complex. They allow us to be closer to achieving real-time and future situation insight applications. Each of these types of business analytics has been discussed below.
- Descriptive Analytics
- Diagnostic Analytics
- Predictive Analytics
- Prescriptive Analytics
1. Descriptive Analytics
It summarizes an organization’s existing data. In this way, it helps to understand what has happened in the past or is happening currently. Descriptive Analytics is the simplest form of analytics. This is because it employs data aggregation and mining techniques. It makes data more accessible to members of an organization. Such as investors, shareholders, marketing executives, and sales managers.
It can help identify strengths and weaknesses. It 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 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 ML 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 business intelligence alone.
One of the most common applications is sentiment analysis. Here, existing data collected from social media is used to provide a comprehensive picture of a user’s opinion. This data is analyzed 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. It 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.
5 Pros Of Business Analytics
In just a few years, the implementation of data analytics has skyrocketed. Big data adoption jumped from 17% in 2015 to 59% in 2018, a whopping 42% increase. Nevertheless, a recent survey also found that many businesses are not tapping into the data they already have at their disposal.
Between 60% and 73% of all data within an enterprise goes unused for analytics. It’s a startling number when you think about the potential benefits to small businesses.
Here are just a few:
1. Keeping You On Budget
If you’re like most small companies, your marketing budget is tight. Using business analytics helps you maximize every dollar. It helps you to:
- Get to know your customers better.
- Anticipate their ever-changing needs.
- Get an edge on the competition.
- Bring innovative ideas and products to the marketplace.
2. Better Decision Making
Not sure how to use your marketing budget? Or which keywords are most effective? What about predicting your biggest sellers over the holiday season? Business analytics uses data to inform decisions and improve accuracy, efficiency, and response time.
3. Measuring Accomplishments Against Overall Goals
Business analytics gives you a clearer image of goals and objectives. By using data visualization, businesses can track their current and past performance against key performance indicators (KPIs), goals and objectives.
4. Staying In The Know
Business owners and marketers can use analytics to track trends, customer behavior and market shifts. This data will allow you to keep on top of things and make changes dynamically when and if supporting data indicates it’s time.
5. Building Efficiency
Nowadays, the speed at which businesses can garner data is lightning fast. Thanks to business analytics, you can identify any breakdown in processor performance in almost real-time, saving time, money and resources.
5 Cons Of Business Analytics
Despite its many benefits, BA comes with its fair share of disadvantages. You’d expect as much with any developing technology, but there are only so many issues you can deal with before something isn’t worth the investment. If you’re to use BA successfully, you’ll have to know what obstacles to expect.
Here are five common cons of business analytics that may disappoint you:
1. Data Breaches
One of the most pressing concerns with any data analysis system is the risk of leaks. If you use BA applications to handle sensitive information, an error in the process could expose it, harming your business, customers or employees.
2. High Prices
Business analytics software can be expensive. While the potential for a high ROI can justify this, the initial price can be a barrier to smaller companies. You also have to consider the costs of the hardware and IT staff needed to implement the software effectively.
3. Difficulty Analyzing Different Data Sources
The more encompassing your BI, the more data sources you’ll use. A variety of different sources can be beneficial in giving you well-rounded analytics, but systems may have trouble working across varied platforms.
4. Poor Data Quality
In this digital age, you have more information at your disposal than ever, but this can prove to be problematic. A surplus of data can mean that a lot of what your BA tools analyze is irrelevant or unhelpful, muddying results and slowing down processes.
5. Resistance To Adoption
Not all disadvantages of BAdeal with the software itself. One of the most substantial obstacles facing BAis employees or departments not wanting to integrate it into their operations. If your company doesn’t adopt these systems across all areas, they won’t be as effective.
Best Course To Pursue A Career In Business Analytics
Wolf Careers Inc. is one of the best BA training and placement consulting firms. Wolf Careers Inc. offers its services to many interested candidates. Our sessions are very interactive. Our team of industry-experienced experts and instructors provides exceptional training. You will learn the best practices of the industry along with advanced topics.
We love to share knowledge with you. Through our training, we will guide you about tools access, and technology. It will help in improving your technical standards. You will also engage in workshops, group discussions, and practice lessons.
Business Analyst Training
Wolf Careers Inc. will provide expertise in the Business Analysis world. It will help you gain confidence in BA concepts. Our Business Analyst Training is designed to deliver extensive knowledge to our candidates. Our step-by-step learning approach specifically focuses on:
- Gathering the Business Requirements,
- Business Modeling,
- Making a Business and Financial use Case, and
- Implementing Business Change.
What You Will Learn
This course will enable our candidates to:
- Identify the role, responsibilities, and competencies of a senior business analyst.
- Identify the benefits and disadvantages of different requirements elicitation techniques.
- Identify the external and internal influences which affect a business.
- Understand the components of and evaluate improvements using a business case.
- Understand what strategy is and why strategic analysis is important.
- Practice a range of business and system investigation, requirement analysis, and modeling techniques.
- Take account of the perspectives of different stakeholders.
- Learn the required stages for effective management of business change.
- Introduction to business analysis
- The Business Analysis Process Model
- Investigation techniques
- Competencies of the business analyst
- Business strategy analysis
- Stakeholder analysis and management
- Gathering the needs
- Documenting and managing needs
- Modeling needs
- Delivering the needs
- Modeling the business system
- Modeling business processes
- Making a business and financial case
- Implementing business change