business analytics

What is business analytics? The complete guide for analysts

What is business analytics?

Business analytics is the practice of gathering, analyzing, and interpreting data to gain insights into business performance and identify areas for improvement. It uses various techniques and tools, such as predictive analytics, machine learning, and natural language processing, to glean insights from structured and unstructured data sources. The goal is to uncover patterns, trends, correlations, and other insights that can be used to make decisions, improve processes, and inform strategic planning.

Business analytics is used in various industries, including finance, health care, manufacturing, retail, and more. By leveraging data-driven insights, businesses can gain an understanding of their customer's behavior and preferences which helps them better meet their needs. Additionally, it can better understand what products or services to focus on, how to price them, and which channels are most effective for marketing.

Business analytics also helps organizations gain visibility into performance metrics such as customer churn rates, cost per acquisition, average order values, and more. This allows companies to make data-driven decisions rather than relying on intuition or gut feeling.

Why is business analytics important?

Business analytics is crucial to the success of any organization, as it helps organizations make informed decisions and drive performance. By leveraging data-driven insights, businesses can optimize their processes for cost savings, improve customer experience and identify new opportunities for growth. Additionally, with the help of analytical tools and techniques, businesses are better equipped to predict future trends and anticipate customer needs.

In short, business analytics plays a key role in the success of any organization, as it allows them to make decisions based on data rather than guesswork.. Furthermore, businesses can gain insights into customer preferences and behaviors which helps them better meet their needs. Ultimately, analytics helps companies improve performance and achieve their strategic goals.

Benefits of business analytics

Improved decision-making

Business analytics helps organizations make better decisions by providing data-driven insights into customer needs, competitor strategies, and other market trends. With the help of analytics, businesses can identify areas for improvement and develop actionable plans for achieving their strategic goals.

Cost savings

By leveraging analytics tools and techniques, businesses can gain visibility into their processes and identify areas for cost savings. This helps organizations reduce operational costs and optimize resources to achieve maximum efficiency.

Enhanced customer experience

Business analytics allows companies to understand customer needs better, preferences, and behaviors which helps them develop products or services that meet their expectations. Additionally, it provides insights into customer satisfaction and helps companies identify areas for improvement.

Increased efficiency

By leveraging analytics, businesses are better equipped to optimize their processes and allocate resources more efficiently. This helps organizations reduce waste and maximize productivity.

Improved strategic planning

Business analytics provides insights into market trends, competitor strategies, and other important metrics that can inform strategic planning. By leveraging data-driven insights, businesses can develop more effective analytics strategies better suited to the current market conditions.

Business analytics vs. business intelligence

Business analytics and business intelligence are vital aspects of the modern data-driven business. Although they have similarities, there are also significant differences between them. Business analytics focuses on leveraging datasets to gain insights and predict future trends. It involves forecasting through data modeling and using advanced techniques such as machine learning and artificial intelligence. 

On the other hand, business intelligence is primarily used to gather and analyze data. It involves gathering information from multiple sources, storing it in a centralized location, and then creating reports summarizing it. Business intelligence is concerned with the present rather than forecasting future trends. It provides an in-depth analysis of current data to support decision-making by providing a snapshot of the current situation. The ultimate goal of business analytics is to use data to make better, more informed decisions that can impact the bottom line. Business intelligence focuses on understanding and analyzing data to improve operational efficiency and maximize profits. 

Both are essential for modern businesses, but they serve different purposes and require different skill sets to be successful. In short, business analytics is focused on discovering the “why” behind data patterns and making predictions from those insights. In contrast, business intelligence provides an understanding of what is happening now to support decision-making. 

By using both approaches, businesses can gain a comprehensive view of their operations and identify areas of improvement. With the right skills and tools, companies can use data to understand customer needs better, optimize processes, and make more informed decisions. With the right insights, a business can stay ahead of its competition and improve its bottom line. Ultimately, combining business analytics and business intelligence is essential for modern businesses to succeed in an ever-changing market.

4 types of business analytics

1. Descriptive analytics: 

Descriptive analytics is used to summarize past data and understand what has happened. It involves examining historical data to gain insights into customer behavior, identify trends, and uncover key performance indicators.

2. Diagnostic analytics

Diagnostic analytics takes descriptive analytics a step further by using data mining techniques to look for patterns and uncover correlations. It can be used to identify the root cause of a problem or opportunity and understand how changes in one area affect other areas of the business.

3. Predictive analytics

Predictive analytics uses data modeling techniques such as machine learning and artificial intelligence to anticipate future events or trends. This type of analytics can be used to forecast future customer behavior, anticipate market trends, and plan for possible scenarios.

4. Prescriptive analytics

Prescriptive analytics takes predictive analytics a step further by suggesting potential actions and outcomes. It helps the business decide which strategies to pursue, how to optimize operations, and which investments to make. It can also be used to provide personalized recommendations to customers. 

All four types of business analytics are important for making informed decisions and gaining valuable insights into customer behavior, market trends, and operational efficiencies. By combining the power of these four types of analytics, businesses can gain a comprehensive view of their operations and make better decisions that positively impact the bottom line.

Common careers in business analytics

Business analytics professionals help organizations to use data in effective and meaningful ways. There are several career paths within the field of business analytics, including the following:

Data analyst

Salary range: $73,222 - $91,827

Job description: Data analysts collect, analyze and interpret data from various sources to identify patterns, trends, and insights that can be used to improve a business's performance. They use a wide range of data analysis techniques, from basic statistical methods to complex machine learning algorithms.

Business intelligence analyst

Salary range: $76,532 - $91,675

Job description: Business intelligence analysts use data to understand and predict customer behavior, identify market trends and uncover growth opportunities. They also develop reporting liveboards that allow business professionals to access key insights and make informed decisions quickly.

Data scientist

Salary range: $124,021 - $153,409

Job description: Data scientists combine the roles of data analyst and business intelligence analyst by using advanced data analysis techniques to solve complex problems and uncover actionable insights. They also develop predictive models that can help businesses anticipate customer behavior and plan for potential outcomes.

Analytics engineer

Salary range: $76,000 - $175,000

Job description: Analytics engineers combine their technical skills and knowledge of analytics concepts to create data-driven solutions. They model and provide clean data sets to end users. Analytics engineers spend most of their time transforming, testing, deploying, and documenting data. 

Business analyst

Salary range: $72,047 - $88,039

Job description: Business analysts focus on understanding how a company operates and what it needs to stay competitive. They look at market trends, customer feedback, financial documents, and other sources of information to make recommendations about process improvements or new strategies.

Financial analyst

Salary range: $57,097 - $69,582

Job description: Financial analysts examine a company's financial documents to determine its profitability and health. They use their technical knowledge of accounting, economics, and finance to analyze a company's financial performance and identify potential risks or opportunities. Financial analysts create reports and make recommendations to decision-makers.

These six common careers in business analytics provide tremendous opportunities for individuals with technical expertise combined with analytical thinking and creativity. With the proper skill set, these professionals are pivotal in helping organizations make better decisions and remain competitive in an ever-evolving market landscape. Those pursuing these careers must stay up-to-date on industry trends and technology advancements to remain competitive.

Find valuable insights in minutes

Business analytics give you the power to take control of your company’s destiny. The ability to access, quantify, and interpret data is becoming increasingly important in the business world. By understanding what business analytics is, how it works, the benefits it can offer your organization, and the different types of business analytics available, you’re well on your way to improving your bottom line.

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