Six components of business analytics

Business analytics is the process of using data analysis, statistical, and quantitative methods and techniques to provide insights for businesses to improve performance. There are various methods, techniques, and tools that can be used to make correlations with the ultimate aim of obtaining knowledge to gain an advantage and drive growth. Here, we outline six components of business analytics.

1. Collecting data

The foundation of analytics is the collection of data to analyse it. Businesses must therefore collect data from numerous sources. These data sources include operational processes, customer interactions, and sales transactions, among others. It is vital for companies to ensure their data is reliable and valid.

2. Data security

A crucial component, and a legal obligation, in the collection of data and business analytics is ensuring data integrity and compliance with data guidelines and regulations. A reputable data analysis company, such as //shepper.com, will ensure compliance and the safeguarding of data.

3. Descriptive analytics

Once the data has been collected, it needs to be understood. Evaluating and summarising data from the past provides historical insight, and reports can be generated along with dashboards and visual representations to allow the comprehension of the data.

4. Diagnostic analytics.

Diagnostic analytics provide an opportunity to look deeper at the data by seeking to identify the reasons or causes behind the events and trends, essentially attempting to not only understand the event or trend that occurred but also to understand the ‘why’. This is a critical component of deeper understanding, allowing businesses to make decisions about moving forward.

5. Predictive analytics

Predictive analytics involves the forecasting of future events and trends based on data collected from the past. This component of business analytics aims to allow companies to anticipate the future and make insightful, proactive decisions.

6. Continuous improvement

Business analytics is always an ongoing process. To be valid and useful, it requires continual monitoring, assessment, and refinement. The continuous improvement component of business analytics necessitates evaluating analytics techniques, initiatives, and strategies; looking at their effectiveness; and adjusting and adapting accordingly to gain useful insights.