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BUSINESS ANALYTICS
Abstract
Business analytics is being discussed everywhere right now as it plays a vital role for the development of
the firms irrespective of its size. The objective of this paper is to provide an overview of Business
analytics. It begins by providing a summary of the three types of analytics. Then it includes a brief
description of its Characteristics, Business Analytics process, Applications of Business Analytics followed
by its advantages.

It has become a challenge for every organization to deal with huge volume of data and with the help of
Business Analytic techniques and technologies modern organizations are making good use of it.

Business Analytics delivers benefits that will drive a good return on investment. It eliminates the
complexity of converting raw data into meaningful information thus helping the business users to make
more intelligent decisions, which will be the ultimate goal.

Several Business analytic tools are available and various techniques are implemented which will help
businesses grow in the current marketplace.

Introduction to Business Analytics

Business analytics is a custom of transforming the data into business understandings enabling the end
users for better decision-making. By using the modern tools and techniques, business analytics can help
assess complex situations, consider all the available options, and predict outcomes and showcase critical
risks for the decision makers.

Business Analytics can simply be described as a practice that includes the use of various techniques such
as Data warehousing, Data mining, Programming in order to visualize and discover several patterns or
trends in data. In simple, Analytics help convert the data into useful information, which can be used for
decision-making. As a means of sorting through data to find useful information, the application of
analytics has found new purpose

A typical example of the use of Analytics will be in Sports where player’s data collected is represented in
the form of stats.

Business analytics is a combination of various strategies and tool technologies in order to improve the
performance of an Enterprise and Business Analytics plays a major role for the growth of the companies
that enlightens decision-making improving its process irrespective of its size

Business Analytics refers to the skills, technologies, applications and practices for Iterative exploration of
data to increase insight and drive business planning. Business Analytics can answer questions Such as

 Why is this happening?

 What if these trends continue?

  What will happen next? (Prediction)

 What is the best that can happen?

Business Analytics collects and analyses data that can be used for predictive analytics, which in turn
creates, visualized reports, helping organization in identifying its pain points. Business analytics software
can be used in analysing historical and current data and utilizes data mining techniques to identify past
business trend in order to use this to future business climates.

Types of Business Analytics

According to Institute of Operations and Research Management Sciences organization, Analytics are
categorized into three types.

1. Descriptive Analytics
2. Predictive Analytics.
3. Prescriptive Analytics.

Various organizations use these Analytics as per their need and can be viewed independently such as few
firms use only one type of Analytics and few others may use the combination of two or more and it
varies accordingly.

Descriptive Analytics: This is an application of simple statistical techniques that defines what is
contained in a database. These Analytics are used to identify potential trends in large data sets or
databases and its purpose is to get a rough picture of what usually the data looks like and what criteria
does it have and its potential for finding trends or future business behavior, its main purpose is to
summarize what happened.

An example would be a Twitter page of some random celebrity that consists of several tweets, posts,
followers, views etc. There can be multiple numbers of these activities and they are all just simple event
counters.

Predictive Analytics: This is an application of innovative statistical, information software, or operations

research methods allowing the analysts in identifying trends and relationships and predicting things for
the future not readily observed in a descriptive analysis. This analytics can only estimate what might
happen in the future.

Prescriptive Analytics: This is also a kind of predictive analytics in order to assign resources to take
benefit of future opportunities and this helps us when to propose an action allowing the decision maker
to act accordingly. Prescriptive analytics adds two additional factors on top of the predictive model:
Actionable data and a Feedback system that can help track the outcome produced by the action taken.

The three types of Analytics plays vital role in driving decisions for the Business.
Characteristics of Business Analytics:
Business Analytics and Business Intelligence are closely related to each other but one thing that is very
much common is that major component of BI involves storing an organization’s data into Data
warehouses or Data Marts. Data warehousing is not a business analytics function, although the data can
be used for analysis. BI is focused on querying and reporting, but it can include reported information
from a BA analysis. BI can help answer questions such as what is happening at the moment, and also
what business actions are to be taken based on prior experience. BA, on the other hand, can help
answer questions such as why is it happening, what are all the new trends that may exist, and what is
the best course for the future. In summary, Business Analytics makes a measurable impact in improving
the performance of Business.

Business Intelligence can generate reports but Business Analytics seeks to explain why the results occur
based on the analysis rather than just reporting and storing the results.

Below table can differentiate the types of Analytics in detail

Characteristics Business Analytics Business Intelligence

Business Performance Planning What is happening now and in What is happening now and
Role the future, what would be the what has been done to deal with
strategy to deal with it? it in past?
Descriptive Analytics Role Yes Yes
Predictive Analytics Role Yes No
Prescriptive Analytics Role Yes No
Business Focus Yes Yes
Focus of Improving Business Yes No
Value and Performance

Business Analytics Process for Decision Making:

The Entire business analytic process involves the above-discussed three analytic components applied
successively to a source of data. The outcome of this entire process must ensure to improve business
performance.

Source Data
1. Observe and become alert
of potential problem.
2. Trying to understand the
current situation
Descriptive 3. Identify and state the
Analytics problems and solution
strategies with respect to
organization goals and
Predictive objectives
Analytics 4. Selection of a solution
strategy
5. Implementing the Strategy
Prescriptive
Analytics

Outcome of this process increases the Business performance and

increase in Value.

The above process can help organizations to solve problems but could also be applied to finding
opportunities in data and decide what is the best course of action to be taken. This five-step process can
help any organization to make an in-depth analysis in decision-making and act accordingly resulting in
improvement of Business performance.
Advantages of Business Analytics:
The Current organizations are using highly developed analytics techniques and technologies in order to
deal with huge volumes of data. CEO’s, CIO’s and entrepreneurs must attempt to become analytical.
Understand their customers and make the proper decisions. Business goals should be more expansive
and strategic.

Top Benefits of Business Analytics include

 Refining and speeding up the decision making process

 Increasing returns
 Preserving governing compliance
 Realizing cost efficiencies
 Responding to user needs for availability of data on a timely basis
 Improving organization’s effectiveness
 Producing a integrated view of enterprise wide information
 Coordinating financial and operational strategies
 Sharing information with a broad range of audience (e.g., casual users)

What Business Analytics Can Do?

By making use of high-level data and quantitative analysis, Business analytics has made decision-making
processes much easier and achieve better results and good output across the organizations irrespective
of the size of the firm from small, mid and Enterprise level.

Harnessing the power of mathematical models, business analytics uses advanced tools and technologies
in making use of its data to help each organization. The methods and models of analytics draw from
disciplines that include statistics, operations research, information systems, and others.

Organizations continue to be challenged and have realized the need for stronger analytics, faster
delivery, flexible change management and intelligence around their business metrics and reporting.
Identifying the key business activities as per the market environment can impact the results that can be
significant for making more informed strategic and operational decisions.

Business analytics allows professionals to take business intelligence and leverage it to the competitive
advantage of the organization and plays a vital role in doing Risk analysis, operation decisions and
Strategic decisions.

Applications of Business Analytics:

In one of the surveys conducted by Bloomberg, Three out of four organizations believe that Business
Analytics has been very effective in decision-making. Few of the key improvements include increased
productivity, reduced cost, and Quick decision-making.
In the past few years, the percentage of respondents profiting from business analytics has risen at a
decent rate evidently highlighting business’s increasing hunger to make sense of its data.

Key Applications of Business Analytics for Businesses to optimize:

 Critical analysis of Products: Helps in assisting the study in trends and make changes accordingly.

 Enhanced customer service: Can keep track of regular customer queries preventing organizations
from repeating errors and enabling customer satisfaction.

 Up-selling opportunities: It helps identify the business needs

 Streamlined inventory management: This can help predict which are getting obsolete reducing
the losses

 Competitive price insights: This can help Businesses make their prices competitive by tracking
the customer trends.

Conclusion:
Organizations that have implemented Business Analytics have seen good amount of success that has
helped them to cut costs, know their Target Audience, Increase in returns. Various organizations that
include Banks, Pharmaceutical companies, Retailers, Insurance companies, Auto manufacturers use
Analytics in their own ways.

These firms have invested across several areas that include Resources, technologies and business
processes to make decisions that will help them predict and answer complex business problems. With
this analytical approach, companies identify their most beneficial customers, accelerate product
innovation and optimize pricing.

Business analytics is a fast growing field and Investing in business analytics is already proved that it
would benefit organizations in several ways and there are many tools available in the market to serve the
needs of organizations. The range of analytical software goes from relatively simple statistical tools to
sophisticated business intelligence suites (ex-SAS, Oracle, SAP, IBM among the big players) helping
organizations in increasing productivity, Improve decision-making and profitability management.
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