Business analytics (BA)
Business analytics uses modern technologies to collect, organise, and analyse historical business data and leverages it to make informed strategic decisions. Structured and unstructured data are gathered from various sources and may include website traffic details, sales figures, market trends, customer behaviour, and survey results. This data is then examined to identify trends and patterns in past business performance metrics and other areas.
By identifying the root causes and triggers behind these observed trends and patterns, and using statistical techniques to spot the correlations between seemingly unrelated factors, business analytics provide detailed insights into what, how, and why of an organisation’s past performance. These insights help organisations in better understanding the causes and effects of various factors that affect the bottom line and make accurate predictions of a business’ cash flow, market trends, sales projections, growth prospects, and more. By extracting this information from an organisation’s historical data, business analytics allows decision makers to craft sound, well-reasoned strategies that guide the business towards achieving its goals.
Business analytics processes can be divided into the following four categories or techniques:
- Descriptive analytics: Descriptive analytics refers to the tracking and collection of various business metrics to describe an organisation’s past or present accomplishments. Several performance-related business metrics are gathered at this stage of the business analytics process, including sales figures, revenue growth, customer satisfaction, customer retention, and more.
- Diagnostic analytics: This business analytics technique aims to diagnose the causes, triggers, and factors behind an organisation’s performance.
- Predictive analytics: As the name suggests, predictive analytics is a category of business analytics that is used to predict future scenarios and outcomes based on insights gleaned from historical data.
- Prescriptive analytics: The most advanced stage of the business analytics process, prescriptive analytics, offers strategic suggestions and solutions to drive organisational growth and stay ahead of the competition.