Business analytics is a process which businesses use statistical method and technologies for analyzing historical data to improve strategic decision making. These are the method of business analytics :
- Data Mining
- Predictive analytics
- Statistical analysis
The use of these method is to analyse and transform data into useful information, identify, and anticipate trends and outcome. The essentials of business analytics are typically categorized into 3 analytics. The first is descriptive analytics, which analyses historical data to determine how a unit may respond to a set of variables. The second is predictive analytics, which looks at historical data to determine the likelihood of particular future outcomes. The third prescriptive analytics, this analytics is the combination of descriptive analytics process, which provides insight on what happened, and predictive analytics process which provides insight on what might happen, providing a process by which users can anticipate what when and why it will happen.
The Importance of business analytics
Nowadays, business analytics is really important for an organization. Business analytics entails the analysis of data to create predictive models, as well as the application of optimization techniques, and communicating the results to employees and customers. It utilizes a data-driven methodology to the business environment, and as such relying on statistics and data modeling to create insights for the business. Organizations employ Business analytics so they can make data-driven decisions. Business analytics gives business an excellent overview and insight on how companies can become more efficient, and these insights will enable such business optimize and automate their processes. The reason for this is that the insights gained via business analytics enable them to understand why specific results are achieved, explore more effective business processes, and even predict the likelihood of certain results. Business analytics also offers adequate support and coverage for businesses who are looking to make the right proactive decisions. Business analytics also allows organizations to automate their entire decision-making process, so as to deliver real-time responses when needed.
Research, in the last few decades, highlight on the growing need of application of advanced techniques in the business decision making for manager. The role of business analytics has become important due to complex business problems, limited ability to analyze the available solutions as well as shortage of time for decision making. business analytical techniques provide managers with more confidence in dealing with uncertainty in spite of the availability of huge data. Business analytics techniques enable the managers with capabilities that enable them to take quick and smart decisions and provide stable leadership to the organization to compete in the market effectively. On the other hand, it provides platform for the researchers to provide a path for the theory development.