Business analytics is the study of skills, technologies, and practices for continuous analysis of past business performance to optimize future business processes. In simple words, business analytics is a data-driven tool used by companies to gain insights into the business’s past performance in order to make the right decisions in the future.
A successful business analysis depends upon the data quality, skilled analytics and an organizational commitment to using the data to gain fruitful insights that will help drive informed business decisions.
There are 3 specific types of business analytics:
- Descriptive Analytics – The one which tracks KPIs (Key Performance Indicators) to understand the current state of a business.
- Predictive Analytics – The one which analyses the data trend to access the possibilities of future outcomes.
- Prescriptive Analytics – The one which used the past performance data to generate recommendations to handle similar situations in the future.
Let’s talk about the advantages & disadvantages of business analytics.
Advantages of Business Analytics
- Helps you monitor the progress of your mission
Quantified values and data help the business improve their analytical process by evaluating the data to gain a clearer picture of what to expect from the employees. Also make sure the result of these analytics is shared with the employees, if they are well informed, they can work on their weak areas to become more productive.
- Helps increase efficiency
Business analytics can gather a large amount of data at a fast rate and display it in a formulated and appealing way to help achieve specific organizational goals. Analytics encourages a culture of efficiency and teamwork by allowing the employees a chance to share their insights and contribute to the decision-making process.
- Helps you be updated
Customers tend to change their minds easily if swayed by better offers. Analytics gives you insight into how your target market thinks. This will allow you to be dynamic at all times to better serve the needs of your customers.
Disadvantages of Business Analytics
- Lack of alignment, availability and trust
In most organizations, the analysts are organized according to the business domains. Unfortunately, the analysis is shared with the top executives and thus the results are not easily communicated to the business users for whom they provide the greatest value.
- Lack of Commitment
Since the solutions that are prefabricated from the analysts are not particularly difficult to implement; they can be very costly and the ROI is not immediate. By nature, these analytics models are prepared to improve accuracy over time but it is a complex model that requires dedication to implement the solution. Because the business users do not see the promised results immediately, they lose interest which results in loss of trust as a result of which the models fail.
- Low quality of underlying transactional data
Implementation of the solutions provided by the business analysts fail because either the data is not available, the data sources are too complex or they are poorly constructed.
Business analytics requires a dedicated and coherent approach and a good level of maturity. In order to become a good business analyst, you need to take a business analytics course. Nowadays, there are several online business analytics certifications available. These business analytics courses help you a great deal with adopting the best measures to identify data sources based on mapping analytical requirements.