Threre are three main specific types of business analytics, namely;
- Descriptive analytics- This type of business analytics uses key performance indicators (KPI) to understand the current position of the business
- Predictive analytics- it predicts the future outcomes by analysing the trends in data
- Prescriptive analytics- This type of business analytics uses historical performances to come up with recommendations on how to handle similar situations in the future.
Business analytics has two main techniques which are sometimes used interchangeably;
- Business intelligence- this method explores past data to determine how a department or employees performed over a particular period of time.
- Statistical analysis- this method applies statistical algorithms to past data to generate predictions about future performance of a service, product or any change.
Data is normally acquired from one or more business systems, cleansed and integrated into a data warehouse or data mart. The tools used in business analytics come in different varieties such as;
- Data visualization tools
- Statistical analysis tools
- Self-service analytics platform
- Business intelligence reporting software
- Big data platforms
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Business analytics is applied in various aspects of an organization such as sales, marketing, fraud detection and supply chain optimization. It is important because;
It breaks down large data into smaller form
It can draw a meaningful sense out of the information provided
It helps the management make an informed strategic decision
It verifies the information provided and eradicate any form of bias
Most firms and multinational companies use the following business analytics software to meet their organizational goals;
- Salford system
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