Types of business analysis
Types of Business Analysis: Tools, Examples, Jobs 2023: The four most general types of business analytics are descriptive, diagnostic, predictive, and prescriptive. The fifth is: Cognitive analytics is a new type using AI, ML, and deep learning. While each of these types of business analytics stands effective when used individually, they become mighty once used together.
1. Descriptive analysis
Analyze historical data to determine a unit’s response to a given set of variables. Track key performance indicators (KPIs) for a better understanding of the current state of a business.
It involves the following five steps:
- Decide which business metrics will effectively assess performance against objectives
- Identification of data required based on the current state of the business
- Data collection and preparation using various processes, such as unpublish, transform, and clean.
- Analyze model data to measure performance
- Present data in tables and graphs to make it understandable to non-analytics experts.
Examples of descriptive analysis
- Summarize past events, data sharing, and use of social media.
- General Trends Report
2. Diagnostic analysis
Diagnostic Analytics is one business analytics that helps you understand why things happened in the past. Through explorations, data mining, data discovery, and correlations, you can understand the drivers.
This advanced analysis method is often used as a preliminary step to descriptive analysis to find the reasoning behind specific results in finance, marketing, cybersecurity, etc.
Examples of diagnostic analysis
- Market Demand Review
- Identification of technical problems.
- Explain customer behavior.
- Improve organizational culture
3. Predictive analytics
Consider trends in historical data to determine the probability of particular future results. It uses various techniques such as data mining, machine learning algorithms, and statistical modeling to predict the probability of events.
Predictive analytics help improves business areas, including customer service, efficiency, fraud detection and prevention, and risk management. It enables you to develop the most profitable customers, improve business operations, and determine customer responses and cross-sell opportunities.
Examples of predictive analytics
- Predict customer preferences
- Detection of employee intentions
- recommend products
- Staff and resource forecast
4. Prescriptive analytics
Prescriptive analysis generates recommendations for handling similar future situations based on past performance. It uses various ML tools, statistics, and algorithms for available internal and external data.
It gives you an idea of what container happened, when, and why.
Examples of prescriptive analytics
- Track fluctuating manufacturing prices
- Improve team management
- Suggest the best course of action
- Price modeling
- Assessment of readmission rates
- identify evidence
5. Cognitive analysis
Combining artificial intelligence and data analysis, cognitive analysis is one of the newer types of business analysis. Examine the data available in the knowledge base and discover the best solutions to the questions posed.
Cognitive analytics covers various analytical techniques for analyzing large data sets and monitoring customer behavior patterns and emerging trends.
Examples of Cognitive Analysis
- Take advantage of unstructured data sources such as images, text documents, emails, and social media posts.
What types of business analysis do different companies prefer?
The best companies choose different types of business analysis. They often use multiple types of business analytics in a step-by-step process, starting with descriptive analytics and ending with prescriptive analytics.
Amazon uses descriptive and predictive analytics of historical customer purchase data to predict the likelihood that a customer will purchase a product. You also use these methods toward personalizing product recommendations.
Microsoft uses prescriptive and then predictive analytics to improve productivity and then collaboration.
Uber uses predictive models to estimate real-time demand and has improved customer service.
Starbucks also uses predictive analytics to predict purchases and offer great deals.
Apple’s Siri, Microsoft’s Cortana, and IBM’s Watson practice cognitive analytics.
What types of business analysis are suitable for you?
Each type of business analysis plays an important role depending on the need. Prescriptive analytics remains one of the most important types and is therefore chosen by most companies.
Descriptive analytics is best suited to analyze daily reports of your activities.
When evaluating future situations using ML and deep learning, use predictive analytics as a more advanced method.
Opt for prescriptive analytics for actionable insights instead of data monitoring to estimate the best possible options. It better meets the needs of healthcare decision-makers in terms of optimization and reduction of production costs.
Regarding social media campaign analytics and other digital marketing analytics, diagnostic analytics help you see what’s working and not working meant for your campaigns.
You can use these four techniques sequentially or move directly to prescriptive analytics if you have identified the critical area that needs optimization to achieve the desired result.
Examining the business strategies of major companies reveals that prescriptive and cognitive analytics are at the forefront of this spectrum.
Business analysis tools
From a simple spreadsheet with statistical functions near complex predictive modeling and data mining applications, business analytics tools allow users to gain deeper insights with much-needed precision.
Business analytics tools help to analyze various reports and business data, generating the best possible result for the users. For example, OmniSci is a business analysis tool enabling users to interactively query, visualize, and feed into big data data science workflows.
Some other tools secondhand by business analysts are:
- tour
- Confluence
- Trello
- Balsamic
- Microsoft Vision
- Google Docs and Spreadsheets
- Pro required rational
Business Analysis jobs
Near Glassdoor, a business analyst earns an average of $68,346 annually. With a deep understanding of business analytics, you can compete for the following positions:
- business analyst
- business analyst manager
- data scientist
- data business analyst
- information security analyst
- Quantitative Analyst
- IT business analyst
Conclusion
Despite the growing demand for business analysis, fewer candidates choose this career. You need to understand and talk about data to thrive in today’s business world. Enroll in our Professional Certificate in Business Analytics program to gain in-demand skills and accelerate your path to success.
frequent questions
1. What are the different types of analysis?
The different types of business analysis are mentioned below:
- Descriptive analysis: summarizing and describing past events.
- Diagnostic Analysis – Review past performance to find root causes
- Predictive Analytics: forecasting future events using historical data and models/ML
- Prescriptive analytics: Recommend specific actions based on data analysis