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Business analytics

From Wikipedia, the free encyclopedia

Business analytics (BA) refers to the skills, technologies, and practices for iterative exploration and investigation of past business performance to gain insight and drive business planning. Business analytics focuses on developing new insights and understanding of business performance based on data and statistical methods. In contrast, business intelligence traditionally focuses on using a consistent set of metrics to both measure past performance and guide business planning. In other words, business intelligence focusses on description, while business analytics focusses on prediction and prescription.[1]

Business analytics makes extensive use of analytical modeling and numerical analysis, including explanatory and predictive modeling,[2] and fact-based management to drive decision making. It is therefore closely related to management science. Analytics may be used as input for human decisions or may drive fully automated decisions. Business intelligence is querying, reporting, online analytical processing (OLAP), and "alerts".

In other words, querying, reporting, and OLAP are alert tools that can answer questions such as what happened, how many, how often, where the problem is, and what actions are needed. Business analytics can answer questions like why is this happening, what if these trends continue, what will happen next (predict), and what is the best outcome that can happen (optimize).[3]

Examples of application[edit]

In healthcare, business analysis can be used to operate and manage clinical information systems. It can transform medical data from a bewildering array of analytical methods into useful information. Data analysis can also be used to generate contemporary reporting systems which include the patient's latest key indicators, historical trends and reference values.[4]

Basic domains within business analytics[edit]


Analytics have been used in business since the management exercises were put into place by Frederick Winslow Taylor in the late 19th century. Henry Ford measured the time of each component in his newly established assembly line. But analytics began to command more attention in the late 1960s when computers were used in decision support systems. Since then, analytics have changed and formed with the development of enterprise resource planning (ERP) systems, data warehouses, and a large number of other software tools and processes.[3]

In later years the business analytics have exploded with the introduction of computers. This change has brought analytics to a whole new level and has brought about endless possibilities. As far as analytics has come in history, and what the current field of analytics is today, many people would never think that analytics started in the early 1900s with Mr. Ford himself.


Business analytics depends on sufficient volumes of high-quality data. The difficulty in ensuring data quality is integrating and reconciling data across different systems, and then deciding what subsets of data to make available.[3]

Previously, analytics was considered a type of after-the-fact method of forecasting consumer behavior by examining the number of units sold in the last quarter or the last year. This type of data warehousing required a lot more storage space than it did speed. Now business analytics is becoming a tool that can influence the outcome of customer interactions.[8] When a specific customer type is considering a purchase, an analytics-enabled enterprise can modify the sales pitch to appeal to that consumer. This means the storage space for all that data must react extremely fast to provide the necessary data in real-time.

Competing on analytics[edit]

Thomas Davenport, professor of information technology and management at Babson College argues that businesses can optimize a distinct business capability via analytics and thus better compete. He identifies these characteristics of an organization that are apt to compete on analytics:[3]

  • One or more senior executives who strongly advocate fact-based decision making and, specifically, analytics
  • Widespread use of not only descriptive statistics, but also predictive modeling and complex optimization techniques
  • Substantial use of analytics across multiple business functions or processes
  • Movement toward an enterprise-level approach to managing analytical tools, data, and organizational skills and capabilities

See also[edit]


  1. ^ "Comparing Business Intelligence, Business Analytics and Data Analytics". Tableau. Retrieved 2021-03-06.
  2. ^ Galit Schmueli and Otto Koppius. "Predictive vs. Explanatory Modeling in IS Research" (PDF). Archived from the original (PDF) on 2010-10-11.
  3. ^ a b c d Davenport, Thomas H.; Harris, Jeanne G. (2007). Competing on analytics : the new science of winning. Boston, Mass.: Harvard Business School Press. ISBN 978-1-4221-0332-6.
  4. ^ Ward, Michael J.; Marsolo, Keith A.; Froehle, Craig M. (2014-09-01). "Applications of business analytics in healthcare". Business Horizons. 57 (5): 571–582. doi:10.1016/j.bushor.2014.06.003. ISSN 0007-6813. PMC 4242091. PMID 25429161.
  5. ^ "Analytics List". Archived from the original on 7 April 2015. Retrieved 3 April 2015.
  6. ^ DeAngelis, S., The Growing Importance of Supply Chain Analytics, Enterra Solutions LLC, published 9 November 2011, accessed 4 December 2022
  7. ^ Westerveld, J., The Growing Importance of Supply Chain Analytics, Supply & Demand Chain Executive, published 28 August 2008, accessed 4 December 2022
  8. ^ "Choosing the Best Storage for Business Analytics". Dell.com. Archived from the original on 2012-07-18. Retrieved 2012-06-25.

Further reading[edit]