The data analytics process has some components that can help a variety of initiatives. By combining these components, a successful data analytics initiative will provide a clear picture of where you are, where you have been and where you should go.
Generally, this process begins with descriptive analytics. This is the process of describing historical trends in data. Descriptive analytics aims to answer the question “what happened?” This often involves measuring traditional indicators such as return on investment (ROI). The indicators used will be different for each industry. Descriptive analytics does not make predictions or directly inform decisions. It focuses on summarizing data in a meaningful and descriptive way.
The availability of machine learning techniques, massive data sets, and cheap computing power has enabled the use of these techniques in many industries. The collection of big data sets is instrumental in enabling these techniques. Big data analytics enables businesses to draw meaningful conclusions from complex and varied data sources, which has been made possible by advances in parallel processing and cheap computational power.
Types of Data Analytics
Data analytics is a broad field. There are four primary types of data analytics: descriptive, diagnostic, predictive and prescriptive analytics. Each type has a different goal and a different place in the data analysis process. These are also the primary data analytics applications in business.
Diagnostic analytics helps answer questions about why things happened. These techniques supplement more basic descriptive analytics. They take the findings from descriptive analytics and dig deeper to find the cause. The performance indicators are further investigated to discover why they got better or worse. This generally occurs in three steps:
Identify anomalies in the data. These may be unexpected changes in a metric or a particular market.
Data that is related to these anomalies is collected.
Statistical techniques are used to find relationships and trends that explain these anomalies.
