The modern age has opened various opportunities for businesses to operate more efficiently. One product of technology is business analytics. To help solve business problems, it applies statistical analysis that recommends action-driven solutions. This post includes details about the types and applications of business analytics, which you will see shortly.
Types of Business Analytics
Business analytics mainly has four types, each of which has intricate details. Below are the kinds of business analytics and their differences:
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Descriptive:
It provides a summary of the firm’s existing data. As a result, you can study and analyze what has happened in the past or what happens in the current scenario. All members of the firm can access this data, such as the investors and shareholders. Meanwhile, using this type can help you identify your firm’s strengths and weaknesses.
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Diagnostic:
This type involves shifting the focus from past performance to the firm’s current situation. Given this point, you can figure out what influenced the trends. You can use this type to identify the root cause of such events and understand why they occurred in the first place.
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Predictive:
You can use this type to forecast the possibility of an event you expect to happen in the future. In this case, you will need the help of statistical models and ML techniques. Using this type allows you to determine the likelihood of target items.
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Prescriptive:
This type involves suggestions about the next best action to take. Meanwhile, the recommended courses of action aim to gain the most desired results. Moreover, it discovers the relation between actions and their outcomes.
As you can see, business analytics has four types, and they have unique features. You can evaluate your firm to know which of these types apply to your business. On the other hand, you may need most of them to improve your business functions and decision-making. Meanwhile, the next section is about the applications of business analytics.
Applications of Business Analytics (BA)
Various tech tools are available to support business analytics, such as IBM Cognos Business Intelligence. In this case, an IBM Cognos training course is necessary to understand how it works and determine which area you can apply it to in the long run. Below are a few areas where business analytics is applicable:
Finance
BA transforms the finance sector massively. Aside from that, most firms hire data scientists for investment banking, portfolio management, financial planning, and many more. In this case, the function of BA in the finance sector includes cost-cutting, identifying market trends and cash flow, and risk analysis. BA helps this sector make decisions to increase profits.
Marketing
It is not about letting the world know about your business; it involves studying buying patterns, trends, target market, and many more. BA helps you gauge how effective your marketing strategy is. Also, it analyzes its impact on your target audience. The data you can gain from this can help you figure out what your clients want exactly from your business.
HR Professionals
The HR section has a wide scope in a business firm. They come across several job applicants, and they can use data based on educational background, attrition rate, years of service, age, etc. Given this point, HR members can predict the members’ retention rate based on the data from business analytics.
CRM
BA can also assist your firm in analyzing key performance indicators. For this reason, it is easier to make wise decisions and choose strategies for boosting client relationships. In this case, BA can provide you with predictions about a customer’s preferences. It can lead to having more satisfied clients to trust and stay loyal to your business.
Manufacturing
You can apply business analytics in various areas of manufacturing. That may include supply chain, risk mitigation plans, or inventory management. In this case, you can apply BA properly after understanding everything about it. Given this point, training can help you with that. An example of that is deciding whether to use old machines versus buying a new one.
Credit Card Companies
These companies can gather data based on various factors, such as financial health, lifestyle, behavioral trends, etc. BA can help them locate the target audience. In addition, they can gain records from their transactions, predict consumers’ choices, spending patterns, and many more.
There are more areas where business analytics applies, such as healthcare or sales. Data will always be vital in every aspect of the business, so business analytics is necessary to help evaluate the outcomes and do actions that will benefit the firm.
