What is business analytics?

Data volumes are blowing up. From customer touchpoints to IoT networks, the sheer amount of data is leaving many companies struggling to keep up. Today’s best business analytics tools give you the power and speed to do more than just manage that data. They deliver the ability to analyze and deeply understand it – turning all that raw information into clear, actionable insights that help your business grow and your teams to make faster, more informed decisions. Whether you’re spotting an emerging opportunity or troubleshooting a sudden dip in performance, business analytics gives you the backing you need at every step.

Business analytics can be defined as the practice of using processes and solutions to analyze organizational data, uncover insights, evaluate business performance, and support strategic decision-making.

Business analytics comes in different shapes and sizes, but most strategies fall into four main categories:

1. Descriptive analytics
   This form of analytics assesses historical data and tracks key performance indicators (KPIs) to tell you what’s going on in your business right now. It is meant to give you an overall picture of the wellbeing of your company. Using dashboards and regular reports, your teams can stay in the know and keep ahead of emerging trends.

2. Diagnostic analytics
   If you see a weird issue like a sudden drop in sales or an increase in returns, descriptive analytics will flag this for you – and investigate why it’s happening. It can dig deeper into your data to compare things like time, location, or customer segments, which let you see correlations, pinpoint specifics, and find fast solutions.
3. Predictive analytics
   As the name implies, this method looks ahead rather than behind, to help you anticipate what’s coming next. It forecasts future trends by combining historical data, statistical models, and machine learning. With this proactive approach, you can be more confident when planning budgets, setting targets, and preparing contingency plans.
4. Prescriptive analytics
   This approach goes beyond predictive methods to recommend next steps. Suppose predictive analytics identifies a coming bottleneck in your supply chain. Prescriptive tools then take the next step to suggest strategies for rerouting or resourcing. And while this method can be complex to initially implement, it pays off in the long run for companies that have vulnerable business models.

Business analytics sits within a broader context of interconnected ideas and terms, many of which overlap. Here’s how it compares to some closely related concepts:

• Business analytics vs. data analytics
  These are related but data analytics is a broader category which includes business analytics. Business analytics essentially applies data analytics specifically to business scenarios and then leverages findings to help drive strategy and decision-making.
• Business analytics vs. business intelligence (BI)
  Typically, business intelligence uses dashboards and reporting and leverages descriptive analytics to help you understand the current state of your organization. Business analytics takes it from there and uses both predictive and prescriptive techniques to anticipate what’s coming next and make relevant recommendations.
• Business analytics vs. process mining
  Process mining is very specifically focused on improving business processes and is a valuable and specialized form of analytics. It examines the workflows within your processes and systems like your ERP. It helps you spot inefficiencies, compliance risks, and opportunities for optimization.
• Business analytics vs. data science
  As the name implies, data science involves foundational algorithms, statistical models, and software tools that power analytics. These methods underpin business analytics, which use them to spot and interpret patterns, make predictions, and deliver useful insights.
• Business analytics vs. data mining
  Data mining is an intentionally robust process designed to find hidden insights in your data, such as unusual correlations or outcomes. Factors like market trends and customer behavior are often hard to pin down, so business analytics benefits greatly from data mining to get in front of what’s next.

AI helps to democratize data by making business analytics more accessible, more responsive, and more insightful. Built-in machine learning models surface patterns that might otherwise go unnoticed. Generative AI lets users ask questions in simple, natural language – and then get answers that are deep, meaningful, and actionable. Even just a few years ago, you would have needed a trained data scientist to achieve the results and outcomes that today’s users can get from just a few clicks or even a simple spoken prompt. That means more people across your business can leverage data, test ideas, and spot risks before they become problems. And because these tools keep learning, the insights get sharper and more relevant over time.