Business analytics, a subset of business intelligence, is a data management solution that involves using processes such as data mining, predictive analytics, and statistical analysis, to transform raw data into a usable form and to identify patterns and figure out trends and make better business decisions. Business analysts are in high demand and being proficient in the subject and with the tools can help kickstart your career as a business analyst. But before getting into the career prospects, it’s imperative that you understand the different types of business analytics, and this article will help you do just that.
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4 Types of Business Analytics
There are 4 types of analytics, depending on the stage of the workflow and the need for data analysis: descriptive, predictive, diagnostic, and prescriptive.
Descriptive analytics is often described as the most basic form of analytics. The goal of descriptive analytics is to break down data, summarize it and figure out what actually is going on. The easiest way to describe descriptive analytics is that it answers “What has happened?”. The two main techniques involved in this analytics are data mining and data aggregation. The tools used in descriptive analytics are MS Excel, MATLAB, SPSS, STATA, etc.
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Predictive analytics is the next type of business analytics and is mainly used to forecast future events. Predictive analytics analyzes past events, trends, and data hordes and lets businesses know about what can happen in the future. It cannot precisely tell whether an event will occur in the future or not, but rather gives the probability of a particular event occurring. Predictive analytics is commonly used in sentiment analysis. Predictive analytics provides better recommendations and more forecasted answers to questions that cannot be answered by BI.
Diagnostic analytics is a type of business analytics that is performed on internal data to understand the “why” behind what happened. It helps identify anomalies and determine casual relationships in data. Drill-down, data discovery, data mining are some of the methodologies used in this type of business analytics. Diagnostic analytics is useful for figuring out what causes and events influenced the outcome. This type of business analytics also includes training algorithms for classification and regression
Perspective analytics at its foundation is the next step in predictive analytics that comes with the added flair of manipulating the future. It basically uses simulation and optimization to ask “What should a business do?” Prescriptive analytics can offer all positive outcomes based on a specific path of action, as well as multiple courses of action to get a specific conclusion. This type of business analytics explores several possible actions and suggests actions depending on the results of descriptive and predictive analytics of a given dataset.
Business analytics is undeniably a key subject that can help you enter the world of analytics and make a name for yourself. The above-mentioned 4 types of business analytics form the base of the art, and mastering each one is essential if you want to become a successful business analyst. We at Praxis understand what it takes to make a remarkable business analyst and towards this have developed a well-curated Post Graduate Diploma in Management. We are sure that our astounding placement records and outstanding connections will help you kickstart your career as a proficient business analyst.