Business analytics is the process through which businesses use statistics and technologies for analyzing historical data in order to gain crucial insights and improve strategies. Business analytics (BA) is a set of rules and regulations that use technologies for solving a business problem using data analysis, statistical models, and other methods. Business analytics involves exploring an organizations’ data to derive results and boost the decision-making process. There are several types of business analytics and all of them revolve around helping out businesses in making informed decisions.
Now that most businesses are going digital, data is like a gold mine for these businesses. Data-driven companies treat their data as a business asset and continuously look forward to utilizing the data to gain advantages over their competitors. How successful a business will be will depend on the type of data, quality of data, and more. Businesses should use skilled analysts that have a great knowledge of the latest technologies and businesses. Another thing that makes data analytics work in the favor of the company is their commitment to gain insights that inform business decisions.
Let’s dive deeper into what is data analytics and how it works.
Main Components of Business Analytics
Business analytics, a data management technique, refers to the use of business intelligence and analysis of data sets to plan the future of a business. Business analytics includes several components, here’s a breakdown:
Data Aggregation: Data aggregation is the first and foremost process of data analysis. To conduct business analytics, the data first be organized in an ideal manner, and filtered, either through volunteered data or transactional records.
Data Mining: Data mining for business analytics is the process of sorting through large datasets using databases, stats, and machine learning to identify trends and establish relationships.
Association and Sequence Identification: The identification of predictable actions are performed combined with other actions sequentially
Text Mining: Text mining explores and organizes large, unstructured text data sets for the goal of qualitative and quantitative analysis.
Forecasting: Data forecasting analyzes past performance data of a business in a specific period to make informed estimates that should determine future events or behaviors.
Predictive Analysis: predictive business analytics relies on a series of statistical techniques to create predictive models, that extract information from datasets, uncover patterns, and provide a prediction for the future.
Optimization: Once future trends have been analyzed after business analytics, businesses can easily engage in simulation techniques to get the best possible results.
The crucial elements of business analytics are generally categorized as descriptive analytics, which analyze historical data to understand how a unit will respond to a set of variables. Modern high-end business analytics technologies and solutions are perfect for handling large data sets and processing the enormous datasets that businesses encounter.
How Business Analytics Work?
Before you implement any type of business analytics, some basic foundation steps need to be followed. Here are the foundations of business data analytics:
Determine the goals of the business analytics
Select an analysis methodology
Get business data to support analysis, this includes data from various sources
Cleans and integrate data into a single source
Initial data analysis is often performed on a smaller data set, this can provide a footing for bigger data analysis sets. Analytics tools range from spreadsheets with statistical features too complicated data mining options and predictive modeling applications. Patterns and relationships in the raw data are revealed during business analytics. Then new questions are implemented to the data and the analytics process is repeated over and over again until the business goal is met.
Initializing predictive models involves a statistical process known as scoring and it uses records generally found in a database. These scores help businesses in making more educated decisions with applications and business processes.
Business analytics support tactical decision-making to counter unforeseen events. More than often the decision-making process is automated using AI and machine learning technologies that support real-time responses.
Types of Business Analytics
There are several types of business analytics, the most common types of business analytics include:
1. Descriptive Analysis
Descriptive analytics is a type of business analytics that keeps track of key performance indicators (KPIs) to understand the present state of your business. This is how businesses measure their current success and build strategies that can help in improving business revenue.
2. Predictive Analytics
As the name suggests, predictive business analytics is the process of uncovering future outcomes. This can include future sales trends, future product predictions, and more. Businesses use these predictive analytics to boost their revenues and increase profits.
3. Prescriptive Analytics
This type of business analytics uses previous business performance to generate future recommendations including handling similar situations in the future.
There may also be some other types of business analytics, there’s a fourth approach named diagnostic analytics which is similar to descriptive analytics. It also analyzes the state of business and diagnoses why specific outcomes happen.
Difference Between Business Analytics and Business Intelligence
The terms business intelligence (BI) and business analytics (BA) are used interchangeably, but there are major differences between them both. Companies often start their process with BI before finally implementing BA. Business intelligence is the process of analyzing business operations and understanding the strategies that work and those that don’t. BI also uncovers areas that need improvement. BI uses descriptive analytics.
Business analytics on the other hand focuses on predictive analytics and generating actionable insights for upper-level management. Instead of using data sets to summarize past profits, BA claims to predict future trends.
The data collected using BI acts as a footing for BA. From that data, companies can choose specific areas to analyze business analytics.
Difference Between Business Analytics and Data Analytics
Data analytics is the process of data analysis of data sets to draw conclusions about the information that they contain. Data analytics doesn’t have to be used for finding business goals and insights. Data analytics is a broader practice that includes business analytic methods.
BA involves using data analytics tools to gain crucial insights about the business and the industry it operates in. However, data analytics is more than often interchanged with business analytics.
Importance of Business Analytics in the Digital Era
Business analytics allow organizations to analyze their business operations, data sets and analyze the data to find room for growth. It helps businesses of all scales utilize the data so they can function better, reduce costs, and target new areas for better revenue streams. Most importantly, business analytics makes real-time decision-making a much easier and simpler process.
A business can do much with proper data analytics, such as determining staffing levels, predicting future sales and trends, and identifying potential business problems. Currently, several companies have been using this data to predict the demand for products and services, this way they can build a strategy that can increase their revenues.
There are several ways to use business analytics. Some major Benefits of Using Business Analytics:
Identify problem areas of business
Uncover new business opportunities based on future trends
Predict consumer behaviors to deal with upcoming changes
Figure out problem points to improve customer experience
Use data to understand the growth of the business and the need for additional resources for smooth scaling
Eliminate redundancies and inefficiencies from the business process
Make real-time business decisions based on data analysis
Build long-term business strategies based on predictive businesses analytics
Evaluate and streamline the existing data collection process
Advantages of Business Analytics for SMBs
Small to mid-sized businesses don’t pay much attention to the value of data. Although this doesn’t mean that business analytics can’t be beneficial for them. There are several advantages of business analytics for SMBs. By utilizing data, SMBs can make informed decisions that can be crucial for their growth. Business analytics can be the key to growth for some businesses.
Smaller businesses don’t utilize the resources at hand to leverage data available to them. Compared to small businesses, large enterprises spend a huge amount of their capital to invest in marketing, research, development, and data analysis. By accessing data, SMBs can pave the way towards growth. The advantages of business analytics are seemingly endless for small businesses.
Here are 6 ways to use business analytics for SMB growth:
Use market data to gain an advantage over competitors and target untapped/less targeted markets.
Predict potential business and product trends to seize business opportunities
Boost productivity by analyzing daily operation and utilizing resources more efficiently
Predict which products to offer to businesses and which price points to maximize revenues and profits.
Monitor and understand customer purchasing behavior to recommend products they might like
Increase business efficiency and productivity by automating data collection, organizing, and leveraging generally available customer data.
What Is Business Analytics Tools? Best Business Analytics Tools
There are many business analytics and business intelligence tools that a business can leverage to improve business operations. These business analytics tools can help businesses organize and utilize the huge data sets that IoT and cloud-based apps generate. Any app from supply chain management, enterprise resource planning, and CRM apps can be used for business analytics.
If you’re wondering what is business analytics tools, then you aren’t alone. A lot of customers don’t know how a business analytic tool works. These business analytics tools can provide organizations with a complete overview of valuable data that can boost efficiency, productivity, and productivity.
Business Analytics Tools vs Business Intelligence Tools
While business intelligence tools also do the same work as business analytics tools. The only key difference is the level of depth offered by both tools. Business intelligence tools compile and analyze data, business analytics tools on the other hand take things a step beyond. Business analytics provides a more thorough idea, helping in identifying weaknesses, alerting policymakers, fixing potential problems, and even predicting future industry trends.
High-end business analytics tools are used by skilled analysts to gather essential insights into the market, enhance customer experience, and achieve business-desired results.
The popularity and demand for expert-level business analytics tools are growing every second. And, there are so many ways to use business analytics tools for achieving desired results. According to some reports, more than 70% of large and medium-scale enterprises will start leveraging sophisticated business analytics tools by the end of 2022. This suggests that businesses understand the advantages of business analytics.
Using data to predict customer behaviors, understand current business patterns, and predict future outcomes is becoming a norm for business.
Here are some of the best business analytics tools available in the market:
1. SAS Business Analytics (SAS BA)
The high-end text analytics functionalities of SAS-based business analytics software allow users to organize, filter, and analyze data to gather deeper insights.
SAS BA is one of the top-rated business analytics tools and it comes loaded with a huge range of statistical tools. This makes the analysis of large data sets simple and seamless. The incredible business analytics tool helps skilled analysts predict future trends. Which can lead to improved revenues for businesses of all types.
Another great business analytics tool to try is QlikView. It’s one of the most preferred tools offered by business analysts because it offers unique features. These features include:
- Patented technology
- In-memory processing
- Facilitating the delivery of fast business analytics reports
QlikView allows users to visualize data relationships that include specific colors for related and unrelated data. Plus, the automation makes the process even easier.
Board is one of the top-rated business analytics tools because of its industry-leading business analytics model. This unique model allows users to create comprehensive, and intuitive data analysis reports.
Board is a highly scalable business analytics platform that combines the best-in-class analytical tools for business, this also includes a robust statistical suite. What makes the tool even great is that Board can manage a huge amount of data. It can also support accurate scenarios and future forecasts by analyzing the data supplied.
Splunk is a business analytics tool that’s used widely by business analyst providers all over the globe. Splunk came onto the scene as a tool that processes machine log files, and over time the tool has evolved into something better. Now it’s one of the top-rated business analytics tools in the market.
Another popular business analytics tool is Sisense and it combines dynamic and robust text analysis functionalities that allow users to transform unstructured text into crucial data insights.
The Sisense business analytics tool features their patented Sisense Crowd Accelerated BI, which relies on open-source language for analytics stats. It allows users to use thorough data analysis and visualization of complicated data, which promotes data-driven decisions and enhanced forecasting of future trends.
Business Analytics FAQs
1. How does business analytics work?
By relying on data aggregation, data mining, predictive data analysis, business analytics can provide essential insights for a business. These insights are crucial for increasing sales, reducing costs, and making informed real-time and long-term decisions.
2. What are the types of business analytics?
There are several types of business analytics, the most common ones being descriptive, diagnostic, predictive, and prescriptive. These types of business analytics can offer incredible insights for a business to make informed decisions.
3. How do business analytics support decision-making?
By leveraging data, business analytics can provide crucial data insights, business analytics can improve decision making. It can also provide information about past events, trends, and patterns that may be unavailable to businesses without crunching numbers.
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