Wednesday, November 2, 2016
Business Analytics
Business analytics (BA) is the practice of iterative,
methodical exploration of an organization’s data with emphasis on statistical
analysis. Business analytics is used by
companies committed to data-driven decision making.
BA is used to gain insights that inform business decisions
and can be used to automate and optimize business processes. Data-driven companies treat their data as a
corporate asset and leverage it for competitive advantage. Successful business
analytics depends on data quality, skilled analysts who understand the
technologies and the business and an organizational commitment to data-driven
decision making.
Examples of BA uses include:
- Exploring data to find new patterns and relationships (data
mining)
- Explaining why a certain result occurred (statistical
analysis, quantitative analysis)
- Experimenting to test previous decisions (A/B testing,
multivariate testing)
- Forecasting future results (predictive modeling, predictive
analytics)
Once the business goal of the analysis is determined, an
analysis methodology is selected and data is acquired to support the
analysis. Data acquisition often
involves extraction from one or more business systems, cleansing, and
integration into a single repository such as a data warehouse or data
mart. The analysis is typically
performed against a smaller sample set of data.
Analytic tools range from spread sheets with statistical functions to
complex data mining and predictive modeling applications.
As patterns and relationships in the data are uncovered, new
questions are asked and the analytic process iterates until the business goal
is met. Deployment of predictive models
involves scoring data records (typically in a database) and using the scores to
optimize real-time decisions within applications and business processes. BA
also supports tactical decision making in response to unforeseen events, and in
many cases the decision making is automated to support real-time responses.
While the terms business intelligence and business analytics
are often used interchangeably, there are some key differences:
Recognizing the growing popularity of business analytics,
business intelligence application vendors are including some BA functionality
in their products. More recently, data
warehouse appliance vendors have started to embed BA functionality within the
appliance. Major enterprise system vendors are also embedding analytics, and
the trend towards putting more analytics into memory is expected to shorten the
time between a business event and decision/response.
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