It is not what you know that matters but how you use what you know that matters.
Analytics is the method of gathering insight by breaking down past performance and data, so that an informative next step can be planned and taken. Think of analytics like watching your life play out in a crystal ball, and then seeing what you should do in the future. Analytics employs statistical and data models to investigate performance. Business intelligence, a similar analysis approach, uses metrics as well.
Why analytics is Important?
In a nutshell, analytics is the catalyst in the decision-making process. It yields tangible results that can be reviewed. By quantifying what has happened in the past, analytics can uncover problems and provide ample solutions to those problems. This makes it an essential tool for management.
Most importantly, analytics plays a role in the budget of a business.If data shows performance problems in one division, a company may turn its concentration to that specific area. Or growing performance may be discovered in an operation, prompting an increase in funding for its continued advancement. In other words, analytics is more or less a business compass as well as a problem solver.
Four simple terms everybody should know !
Descriptive analytics: Here’s what happened.
- Example 1: Donations dropped sharply two years ago.
- Example 2: We gained 52 more donors/investors than last year for this project.
Diagnostic analytics: Here’s why it happened.
- Donations went down because there was a huge scandal on campus.
- We gained 52 more donors/investors because we hired a new fund-raiser/manager to oversee that project.
Predictive analytics: Here’s what will probably happen
- Donations will likely continue to go down for the next 15 years unless we do something.
- We will likely gain another 104 donors/investors next year due to the stronger relationships the new fund-raiser/manager will be building.
Prescriptive analytics: When it will happen, why it will happen and how it will happen
- If we factor in Plan A to avoid scandals in the future; hire a new president; and undergo an entire house-cleaning; donations will start to climb again in 3rd Year.
- we hire 5 additional staff to support the project, and if we involve this group of 15 stakeholders, we will be able to build phase 2 of the project in 5th Year
In Multiple ways we use predictive analytics without even knowing it..
Few of them are mentioned here:
Amazon Product Recommendations
FICO Credit Score
As can be seen it has evolved as one of the most predominant area of interests. Be in research on human genome or use in business developments, and various other fields, it has been clearly the forerunner.