Business analytics

More cutting-edge than business intelligence (BI), business analytics (BA) allows advanced statistical analysis of data, which is used to help make future business decisions.

How it works

BA takes a scientific approach to interpreting information. Businesses use BA’s advanced software tools to analyze information about past or current trends and behavior to predict a future scenario. Unlike business intelligence or predictive analytics that analyze current and past data, BA allows businesses to forecast with a high degree of confidence. BA can be applied on a macro level to get a broad view of future business performance and on a micro level to assess, for example, the likelihood of individuals in niche markets making purchases.

Business analytics process

A skilled analyst interprets the raw data using BA tools. The results influence the business actions that will be taken in the future.

Raw data (in)This includes company records (past and current customer data and transaction histories) and external data (economic, trade, and industry reports).

Predictive modeling Software program that predicts patterns of behavior and the likelihood of specific sets of customers, or even individuals, making a purchase.

Pattern matching Process of trawling through large quantities of data to find patterns between variables, which can be applied to other sets of data.

Data visualization Formulation of graphs depicting the results of data analysis; graphs may rank data, group common attributes, and compare relationships.

Data mining Use of computerized processes and software programs to find relevant patterns in large sets of data.

Analysis(out) Software tools are used to
process and study raw data. Analysts interpret results and make forecasts that help future business decisions.

BUSINESS INTELLIGENCE AND BUSINESS ANALYTICS

The example of a 5 percent sales dip shows how BI and BA can be used to examine and understand the situation.

Business intelligence

❯ Type of data investigation Results reveal past and current event in the business.

❯ Questions answered What has happened in the business in the past and what is happening currently?

❯ Tools used Reporting, dashboards, scorecards, online analytical processing (OLAP)

Business analytics

❯ Type of data investigation Examines past event in the business, and applies the patterns discovered to a future scenario.

❯ Questions answered Why did it happen? Will it happen again? What can we do to stop it from happening again?

❯ Tools used Statistical analysis, data mining, pattern matching, predictive modeling

DATA USEFULNESS

Some data is more useful than other data; value is determined by the extent to which marketers can use it to make confident forecasts. Methods of interpreting data are increasingly sophisticated.

Predictive analytics Program that conducts advanced analysis of data to forecast future outcome

Monitoring Process that uses software to show what is currently happening in a business, providing real-time results to help key operations make decisions

Statistical analysis Software that organizes and investigates every piece of relevant data and interprets it to show trends and patterns

Reporting Method that draws on historical data to provide a general overview, revealing, for example, how the business performed in a given year

93%
of IT executives in Brazil say that their business could be improved by using big data analytics or intelligence