Article Review: 4 Types of Analytics Every Business Should Track | Axial

Gary Samoluk, CxO Analytics | May 31, 2017

Key Takeaways:

• Management can become overwhelmed with data.
• To implement a system, understand the range of analytics that exist.
• Their are four basic types of analytics:

Descriptive

• Most basic and widely used form of analytics
• Summarize what has happened for a period of time. 
• Over periods of time you use descriptive analytics to identify and track trends. 
• Tracking monthly revenue is descriptive analytics.

Predictive

• Predictive analytics try to predict the probability of a given event using statistics, data mining, machine learning, and other methods.
• These analytics use descriptive analytics to look for patterns, trends, or relationships.
• Sales and marketing may use predictive analytics to see customer needs and buying patterns; identify customers with a propensity to buy; and recommend products.  

Prescriptive

• Prescriptive analytics identify relationships within data and recommend the best course of action for a given business issue. 
• Prescriptive analytics require a business intelligence group and/or software solution to gather the data, develop models, and manage relevant tools.
• Implemented correctly, prescriptive analytics can help optimize a business’s decision-making to maximize profits and growth.  
• Prescriptive analytics may analyze data from your company websites.  Based on a customer's access patterns, comment postings and buying habits it would prescribe specific products to suggest while they are shopping online. 

Benchmarking

• Benchmarking is a method of analysis for descriptive and prescriptive analytics by which your company’s data is compared against an established standard for companies in your industry and size range.
• Benchmarking allows you to see performance gaps between your company and the industry performance standard.
• Benchmarking can be useful for cash management, budgeting and forecasting, short and long-term planning, identifying and preparing for capital needs, etc.

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