How well do you understand advanced data analytics? We’ve seen the phrase “big data” used in every media source from the nightly news, to Gartner, to (we swear), TMZ. It’s one of those catchall phrases that everyone uses but most people really don’t understand.
In 2001, Gartner came up with the definition of big data and the “the V’s” – volume, velocity, and variety. While that serves to define big data’s scope, we prefer a definition that carves out what you do with it. Big data is nothing but words on a page if you don’t acknowledge what we’re trying to accomplish. Thus, our definition suggests big data is the practice of using advanced data analytics to drive business intelligence (BI).
Big Data Means Big Business Intelligence
For the past few years, advanced analytics have been used to track and visualize business performance. Today, big data BI is segmented into four types of data analytics.
- Prescriptive analytics suggest a possible course of action based on data. This data discipline uses machine learning, algorithms, and modeling to prescribe how a business should act. It seeks to define what actions can be prescribed to avoid problems and drive more success.
- Predictive analytics try to guess what will happen in the future. While no algorithm is 100% effective, predictive analytics takes historical data from ERP, HR, POS, CRM, or other platforms and looks for patterns of activity that will forecast business trends or buying patterns.
- Diagnostic analytics help us understand why something happened. Diagnostic analytics is very useful for social media marketing; data analytics can help us track the number of page hits, likes, or other conversion rates. It looks at why things are happening, determines correlation or causation, and looks for patterns of behavior.
- Descriptive analytics helps businesses gain insight into what has happened in the past. For example, understanding past customers and their buying patterns. The process seeks to describe raw data in a way that is understandable; this is one example of why data visualization tools are imperative to BI.
What Are The Four Data Questions?
Executives seeking to define how they will use big data must really ask themselves the following four questions to determine how to structure their BI initiatives:
- Can we use big data to figure out a course of action? Prescriptive analytics will help you understand what your business should do in the future.
- Am I worried about predicting what could happen to my business based on future trends?
As the name suggests, predictive analytics should be the key to your BI efforts.
- If you’re asking yourself, “Why did it happen?” diagnostic analytics will help you drill down and data mine until you find correlating factors that help you diagnose the problem.
- Do I want to determine historical trends and what has happened in my business in the past?
If so, descriptive analytics will help you understand the past in order to make decisions in the future. For example, this technique is useful to define who were your top customers, and what purchases they made in during a given time period.
Decisive Data is a BI company focused on harnessing advanced data analytics to create actionable insight. Contact us to find out how we can apply these principles to your big data to create better business outcomes.
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