Analytics uses the scientific method where an analyst makes hypotheses and uses the analytics tools to test their premises.
Analytics, is described as:
“[An] encompassing and multidimensional field that uses mathematics, statistics, predictive modeling and machine-learning techniques to find meaningful patterns and knowledge in recorded data.”
Analytics is often broken down into three components:
- Descriptive Analytics: Covers the more standard BI activities aimed at understanding activities and opportunities from historical data. It answers the questions:
- What happened?
- Why did it happen?
- Predictive Analytics: Provides insight based on modeling. It answers the question: What is likely to happen? It is sometimes considered a subfield of supervised learning that is rooted in statistics.
- Prescriptive Analytics: Has its basis in scenarios and asks: What should we do to make things happen? It takes predictive analytics a step further to define actions that will affect outcomes, rather than just predicting the outcomes from actions that have occurred.
Other Definitions of Analytics Include:
- A “catch-all term for a variety of different business intelligence (BI)- and application- related initiatives. For some, it is the process of analyzing information from a domain, such as website analytics. For others, it is applying the breadth of BI capabilities to a specific content area (for example, sales, service, supply chain and so on).” (Gartner)
- “A qualitative aspect to decision-making, provided by the algorithm and derived from identified patterns among the data.” (O’Neal and Ladley)
- “Diagnosis, predictions and opportunities made from high-speed and high-volume data.” (Paramita Ghosh)
- Techniques “designed to parse, explore and produce results to support business decisions.” (Kartik Patel)
- “An enabler to derive truth and meaning from data that drives business growth.” (Forbes)
- “Tools and techniques used by many different industries to create, manage [and explore] large, complex datasets, to evaluate past performance, predict future trends, and make better decisions.” (Washington State University)
Businesses Use Analytics To:
Photo Credit: Shutterstock.com
