Data analytics refers to examining and analysing raw data to draw conclusions based on patterns and trends discovered. Today’s successful corporations rely on data analytics to make sound, data-driven business decisions. Organisations use various digital analytics tools to create predictive models, as well as to verify their own findings and hypotheses.
Modern data analytics tools collect and scrutinise raw business data from various internal and external sources to develop insights to help businesses perform better. Data analytics tools help businesses in crafting relevant marketing strategies, optimising processes, boosting profits, reducing expenses, and much more. At the most basic level, data analytics can be divided into four categories, as described in the following sections.
It deals with collecting data to provide insights into past occurrences. Metrics tracked and collected for descriptive analytics include website traffic, sales figures, survey results, customer behaviour, market trends, and more. This data analytics phase refers solely to collecting and summarising large amounts of data to provide stakeholders with detailed insights into historical performance.
Taking a step beyond data collection and summarisation, diagnostic analytics aims to provide organisations with a better understanding of the causes and triggers behind patterns and trends observed in raw data sets. It uses statistical techniques to identify relationships between seemingly unrelated factors and the reasons behind certain occurrences.
It analyses large amounts of historical data to forecast future scenarios or outcomes. This helps organisations make timely strategic decisions to stay ahead of the competition by predicting the probable effects of today’s actions. Predictive analytics forecasts an organisation’s cash flow, market trends, sales projections, growth prospects, and more.
Organisations use insights gleaned from prescriptive analytics to decide their course of action. By exploring and analysing various possible outcomes based on actions taken today, predictive analytics recommends steps and strategies for businesses to achieve their goals. These data-driven recommendations can be directed towards boosting profits, increasing customer engagement, improving sales conversion rates, and more.