Business analytics is a crucial process for leveraging data to inform decisions and improve organizational performance, encompassing four distinct types: descriptive, diagnostic, predictive, and prescriptive.
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Data is a valuable resource in today's ever-changing market.
Across industries, professionals collect, analyze, and interpret
data to inform decisions and drive
organizational performance.
This process is known as business analytics.
There are four types of business analytics--
descriptive, diagnostic, predictive, and prescriptive.
Descriptive analytics serves as the foundation
and answers the question, what happened?
It does so using current and historical data
to describe trends and relationships.
Descriptive analytics is especially
effective for communicating change over time,
such as tracking and reporting a business's website traffic.
Diagnostic analytics addresses the next logical question--
why did this happen?
It helps determine the root cause
of trends and correlations between variables.
For example, a meal kit delivery company
can gather data on why people cancel subscriptions
to improve its products and services and retain customers.
Predictive analytics answers, what
might happen in the future?
It utilizes past data to forecast scenarios, trends,
and events to inform business strategies.
For instance, marketers can use prior years' data
to forecast sales trends and plan campaigns accordingly.
Prescriptive analytics answers, what should we do next?
It involves considering all relevant data
to chart an optimal path forward.
Product managers for a new mobile app
can employ beta testing to determine
which features to include or exclude to optimize the user
experience.
Leveraging these business analytics types in tandem
can provide a full picture of the story data tells
and lead to more informed decision making.
Do you want to learn more about how
data analysis can enable you and your organization to succeed?
Use the links in the video description
to visit our business insights blog
and explore our online course, Business Analytics.
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