What Is Business Analytics?

Business analytics relies on analysing business data to find patterns and trends in current and historical data. Business analysts use this to make predictions and gain insights they can apply to the business environment, such as making data-driven decisions and forecasts. 

Business analysts use a range of business intelligence (BI) tools to support the process, including tools to collect, clean, and present data in a way that is easy to view and understand and tools for data reporting. 

In this article, you’ll learn about the different types of business analytics, understand what businesses use analytics for, the range of BI tools available, and the benefits of bringing analytics into your business.

What is business analytics used for?

Business analytics is used in all business areas to understand data and improve business decisions. This might involve developing strategies for improving processes, increasing revenue, preventing recurring problems, understanding customers, or gaining a competitive edge. 

Business analytics benefits businesses in all fields that use data. These tools help companies to understand their customers and industry and how to use past experiences to inform future decisions. Business analytics industries include marketing, sales, human resources, and the financial sector.

Types of business analytics

As a broad discipline, business analytics looks at data and uses the findings to improve business processes, increase revenue, and predict future patterns. Within this, you’ll find four types of analysis: descriptive, predictive, prescriptive, and diagnostic:

Descriptive analytics: You can use descriptive analytics to look at historical data and summarise what has happened in the past, usually in the form of a chart or graph, to use for future practices—for example, a retail company looking at the percentage of returns and income lost as a result. 

Predictive: You can use predictive analytics to foresee future events by looking at previous patterns and their outcomes. It helps to build statistical models and better understand what is likely to occur if you do or do not implement changes—for example, looking at the previous year’s gross profit to predict the following year’s profit. 

Prescriptive: Here, you use data modelling and statistical analysis to understand what you need to do within a business area. You can produce several possible solutions with expected outcomes and choose the most viable—for example, having a contingency plan as a backup. 

Diagnostic: When performing diagnostic analytics, you are trying to understand the cause of an outcome by analysing relevant data. Using data mining and statistical analysis, it’s possible to understand historical data to find out what has happened and why, so you can make improvements to stop the same thing happening again—for example, using data to uncover why a project became delayed and implementing processes to make sure this doesn’t happen in future.

Business intelligence tools

Business intelligence (BI) tools make analysing and reporting data more accessible and efficient. Tools come into every stage of business analytics, including data collection and mining, the four types of analyses, data visualisation, and data reporting. Let’s take a look at some popular BI tools: 

Tableau: Tableau is a well-known, popular data visualisation BI tool. It lets you present data visually, making reporting easy with a straightforward, user-friendly platform.

Domo: Domo is a business cloud with functions for various sectors and a user-friendly dashboard that allows multiple people in a business to access, analyse, and view data.

Yellowfin: Yellowfin is an integrated platform allowing easy access to data to create visualisations, automated analysis, and even integration with your tech stack. 

Qlik: One of the first BI tools, Qlik allows you to analyse and represent data clearly for easy access. 

Who uses business analytics?

Departments and disciplines across organisations of all types and sizes use business analytics. The need for business analysts has increased rapidly in recent years. In some cases, a supply versus demand gap exists as the need is greater than the amount of trained professionals available.

Areas of any business that benefit from business analytics include:

• Marketing: Using data analytics to understand the response and reach of marketing campaigns, clicks on ads, and customer behaviour.

• Customer experience: Using data to understand customers, their habits, needs, and feedback is an effective use of business analytics. 

• Finance: Data analytics helps businesses make data-driven decisions around finance and predict and forecast for coming years.

• Sales: Business analytics helps break down sales cycles, analyse prices, draw comparisons, and understand more about sales conversions.

• Human resources: Using business analytics in HR allows companies to understand employee behaviour, see recruitment and retention trends, and identify training needs.

Benefits of using business analytics

Business analytics plays a large part in most businesses because of its clear advantages. Let’s take a look at some of these advantages:

Helps decision-making: Using business analytics means that any decisions you make can be data-driven and backed by statistics. It allows you to quickly change direction by understanding where mistakes have happened in the past, giving you the capacity to analyse your competition and learn about customer behaviour.

Reliable outcomes: Using data means assessing the risk of certain strategies and scenarios, picking the one that will deliver a reliable outcome backed by statistics. It also allows you to measure and analyse progress reliably using past data. 

Supports automation: Automation allows businesses to be more productive and efficient. Business analytics lends itself well to this function, with BI tools that make analysing large volumes of data quicker and without human error.

Visualisation tools: Visualisation tools help translate complex data into manageable information for the masses. You’ll find a wealth of BI tools that support this process, such as graphs, charts, and infographics. 

While using business analytics has many advantages, as with anything, you’ll also need to be aware of factors such as the cost of BI tools, a possible skills gap within the workforce, and resistance to change. 

Build your business analytics skills.

Working in business analytics is an excellent career choice, with many jobs available and high salaries to match.

You'll need various skills to work in a business analytics role. These include:

• Data analysis

• BI tools

• Financial modelling

• Business acumen

• Problem-solving

• Negotiation

• Decision-making

• Attention to detail

• Critical thinking 

• Communication

• Presentation skills

• Technical ability

Getting started with Coursera

Sharpening your skills and knowledge can help you start a career in business analytics. A great way to enhance your resume is with an online course or Professional Certificate such as the Google Business Intelligence Professional Certificate listed on Coursera.