Data analytics has taken the business community by storm recently. The rise of powerful computers as well as the amount and variety of data being generated has helped businesses of all types and sizes gather insight into many aspects of their business like never before. These days Google and Amazon can tell you what you will need or where you are likely to go for vacation even before you know it. When done right analytics can help your business grow sales and improve efficiency significantly.
There are various ways in which you can perform the analytics as shown by CAMO. A method called descriptive analytics is the most basic type that analyzes the data from the past to identify patterns. Other forms of analytics include predictive analytics and prescriptive analytics.
What is Descriptive Analytics?
The purpose of descriptive analytics is to analyze and summarize the data from the past and tell you what happened and why. Descriptive analytics is mostly based on standard aggregate functions like average, maximum and mode in databases that require nothing more than grade school math.
Descriptive analytics can be classified into three categories:
- Event counters such as number of posts and followers on social media
- Simple mathematical operations like average response time and average number of replies per post
- Filtered analytics, such as average posts per week from the United Kingdom vs. average posts per week from Japan
Descriptive analytics can reveal insight into key performance indicators and they can be displayed in the report or dashboard view.
How do Businesses Use Descriptive Analytics?
Businesses use descriptive analytics to gain insight into number of activities they perform on a daily basis. The uses cases for descriptive analytics are numerous and varied.
For example, Wal-Mart mines terabytes of real-time data and petabytes of historical data every day to uncover patterns in sales, according to DeZyre. Wal-Mart analyzes online search keywords and customer interactions from different sources to look at certain actions. For instance, Wal-Mart examines what consumers buy in store and online, what’s trending on Twitter and how the World Series and weather affect buying patterns.
The Dow Chemical company used descriptive analytics to increase facility utilization across its office and lab spaces globally. The company identified under-utilized space, ultimately increasing facility use 20 percent and generating an annual savings of approximately $4 million in space consolidation.
What is Beyond Descriptive Analytics?
Descriptive analytics by itself can be useful to analyze the historical data, however their use is somewhat limited because it tells you what happened and why. To truly harness the power of analytics businesses need to deploy prescriptive and predictive analytics. Once past events and patterns are understood, it’s natural to want to use that information to predict what will most likely happen and what a company should do.
For instance, human resources analytics can examine how long certain employees have stayed with a company, their salary, how many days they were absent in a year and compare it to performance. Using simple demographic and performance indicators can help predict how long an employee with certain qualities will stay with the company, iNostix explains. Companies can also establish best practices based on these insights.
What are the Career Opportunities in Analytics?
The opportunities in the field of analytics are becoming plentiful in the last few years. All types of companies are looking for professionals with analytics skills. According to a report from McKinsey the United States faces a shortage of 140,000 to 190,000 people with deep analytical skills. There is going to be a shortage of 1.5 million managers and analysts who are able to use big data to make effective decisions. Students who can blend data mining and analytics with business acumen stand to reap great rewards in their professional career. If you are interested in applying business analytics to your career, visit this fully online MBA page from SEU to get more information.
