How do businesses make decisions? In many cases, it comes down to analyzing data and making informed decisions based on customer behavior. The individuals responsible for making sense of data collected by a company are often referred to as business analysts, data analysts, or intelligence analysts.
If you have no prior experience working within the data science or analytics fields, getting started with business analytics can feel overwhelming—but it’s a necessary tool for businesses who want to give themselves a competitive edge in today’s market.
Keep reading for an overview of business analytics for beginners, including fundamental concepts of business analytics and how to get started in this emerging field.
What Is Business Analytics?
Business analytics is the practice of using data to help inform and influence a company’s decision making. Data that is collected by the company is used to create predictive models. While business analytics is often focused on analyzing customer behavior, that is not its only application. Analytics can be valuable for nearly all industries, from retail to healthcare to human resources.
Business analytics can help companies in a variety of ways:
- Helps businesses prepare for the future
- Influences company decision making
- Eliminates guesswork associated with predicting customer behavior
- Enables companies to present clear and meaningful data to stakeholders
- Allows companies to measure performance after making a change to their operations
Thanks to new technologies and tools, companies have access to more data than ever before. Businesses are able to collect information regarding purchasing trends, seasonality, customer satisfaction, and much more. According to Allied Market Research, the global business analytics market is predicted to reach $420.98 billion by 2027. That’s over a 15% compound annual growth rate.
When you look at what businesses have been able to achieve through business analytics, it’s easy to see why the field is thriving. Studies have shown that companies that embrace data analytics tend to outperform companies who do not. According to Gallup, companies that leverage behavioral insights outperform their competitors by 85% in sales and 25% in gross margin.
Fundamental Business Analytics Concepts
The business analytics field is built upon a variety of techniques and applications. If you’re new to studying big data, there are some key concepts and terms you may want to become familiar with before diving headfirst into learning business analytics.
Data mining refers to the process of analyzing large sets of data for patterns and trends. As a business analyst, you’ll need to know how to extract useful information from datasets and identify correlations. Data mining often involves checking datasets for duplicate or missing information. Be aware that if you’re working raw data, you may need to have some prior experience in statistics.
When businesses use the term “descriptive analytics,” they’re referring to a type of analysis that aims to explain historical data. For example, descriptive analytics could include looking at sales data from multiple years to determine which times of year are the busiest for a retail store. Analysts engaged in descriptive analytics try to paint an informed picture of a company’s past or present situation.
While descriptive analytics focuses on analyzing and explaining historical data, predictive analytics uses data to determine what may happen in the future. By identifying patterns in datasets, analysts can make assumptions about likely outcomes or events. If a company sees significantly lower engagement on their social media posts later in the day, a business analyst can predict that launching a new marketing campaign in the evening may lead to fewer conversions. Predictive analysis can be especially useful for identifying possible financial or operational issues before they come to fruition.
Prescriptive analytics uses data to provide specific recommendations for a business. This technique relies on findings from descriptive analytics and predictive analytics, using these insights to identify solutions that can help businesses overcome specific challenges. In many cases, prescriptive analytics uses machine learning and artificial intelligence to compare various potential outcomes. For example, a human resources department may use prescriptive analytics to determine what traits they should look for in candidates.
To aid in the decision-making process, some companies use a technique called decision analysis. Decision analysis involves using complex models and tools to predict the outcome of various scenarios, which can in turn help influence decision making. Decision analysis may also incorporate psychology and management concepts. This type of business analytics technique is often used by companies as part of their risk management strategy.
What Skills Are Needed to Learn Business Analytics?
The Bureau of Labor Statistics estimates that demand for operations research analysts will grow much faster than the average for all occupations over the next decade—increasing by 25% from 2020-2030. If you’re considering becoming a business analyst—or simply want to grow your professional development—you may be wondering what types of skills are necessary for learning business analytics.
Rest assured that even if your academic background is in liberal arts or another non-technical field, you can still study business analytics. Wharton Online’s Business Analytics program is designed specifically for beginners and provides learners with an overview of analytics concepts and techniques. Furthermore, Wharton Online’s curriculum encourages you to build upon and develop soft skills that can help you succeed as a business analyst. According to O*NET OnLine, some of the top skills required for business analytics professionals include:
- Critical thinking
- Judgement and decision making
- Problem solving
That being said, some professions within the business analytics field may require more advanced skill sets than others. Because predictive analytics involves determining what trends will look like in the future, it can involve complex statistical models. Most analytics roles also require you to know how to use specific database management tools and software.
Grow Your Knowledge With a Business Analytics Program
The information provided here only scratches the surface of what business analytics is and what it can be used for. To learn more about how business analytics can help you reach new levels of success in your career, explore Wharton Online’s Business Analytics Specialization program. This program provides you with the education you need to start applying analytics concepts within your organization.
Wharton Online’s Business Analytics Specialization program features courses in Customer Analytics, Operation Analytics, People Analytics, and Accounting Analytics. This 100% online program allows you to work at your own pace and access on-demand lessons from Wharton professors. Request more information today to see how business analytics could fit into your professional development.