What Is Data Analytics

What is Data Analytics?
In this new digital world, data is being generated in an enormous amount which opens new paradigms.
As we have high computing power as well as a large amount of data we can make use of this data to
help us make data-driven decision making. The main benefits of data-driven decisions are that they are
made up by observing past trends which have resulted in beneficial results.
In short, we can say that data analytics is the process of manipulating data to extract useful trends and
hidden patterns which can help us derive valuable insights to make business predictions.
Use of Data Analytics

There are some key domains and strategic planning techniques in which the Data ANlaytics has played
a very important role:
 Improved Decision-Making – If we will have supporting data in favor of a decision that then
we will be able to implement them with even more success probability. For example, if a
certain decision or plan has to lead to better outcomes then there will be no doubt in
implementing them again.
 Better Customer Service – Churn modeling is the best example of this in which we try to
predict or identify what leads to customer churn and change those things accordingly so, that
the attrition of the customers is as low as possible which is a most important factor in any
organization.
 Efficient Operations – Data Analytics can help us understand what is the demand of the
situation and what should be done to get better results then we will be able to streamline our
processes which in turn will lead to efficient operations.
 Effective Marketing – Market segmentation techniques have been implemented to target this
important factor only in which we are supposed to find the marketing techniques which will
help us increase our sales and leads to effective marketing strategies.
Types of Data Analytics
There are four major types of data analytics:
1. Predictive (forecasting)
2. Descriptive (business intelligence and data mining)
3. Prescriptive (optimization and simulation)
4. Diagnostic analytics
Predictive Analytics
Predictive analytics turn the data into valuable, actionable information. predictive analytics uses data to
determine the probable outcome of an event or a likelihood of a situation occurring. Predictive
analytics holds a variety of statistical techniques from modeling, machine learning, data mining,
and game theory that analyze current and historical facts to make predictions about a future
event. Techniques that are used for predictive analytics are:
 Linear Regression
 Time Series Analysis and Forecasting
 Data Mining
Basic Corner Stones of Predictive Analytics
 Predictive modeling
 Decision Analysis and optimization
 Transaction profiling
Descriptive Analytics
Descriptive analytics looks at data and analyze past event for insight as to how to approach future
events. It looks at past performance and understands the performance by mining historical data to
understand the cause of success or failure in the past. Almost all management reporting such as sales,
marketing, operations, and finance uses this type of analysis.
The descriptive model quantifies relationships in data in a way that is often used to classify customers
or prospects into groups. Unlike a predictive model that focuses on predicting the behavior of a single
customer, Descriptive analytics identifies many different relationships between customer and product.
Common examples of Descriptive analytics are company reports that provide historic reviews
like:
 Data Queries
 Reports
 Descriptive Statistics
 Data dashboard
Prescriptive Analytics
Prescriptive Analytics automatically synthesize big data, mathematical science, business rule, and
machine learning to make a prediction and then suggests a decision option to take advantage of the
prediction.
Prescriptive analytics goes beyond predicting future outcomes by also suggesting action benefits from
the predictions and showing the decision maker the implication of each decision option. Prescriptive
Analytics not only anticipates what will happen and when to happen but also why it will happen.
Further, Prescriptive Analytics can suggest decision options on how to take advantage of a future
opportunity or mitigate a future risk and illustrate the implication of each decision option.
For example, Prescriptive Analytics can benefit healthcare strategic planning by using analytics to
leverage operational and usage data combined with data of external factors such as economic data,
population demography, etc.
Diagnostic Analytics
In this analysis, we generally use historical data over other data to answer any question or for the
solution of any problem. We try to find any dependency and pattern in the historical data of the
particular problem.
For example, companies go for this analysis because it gives a great insight into a problem, and they
also keep detailed information about their disposal otherwise data collection may turn out individual
for every problem and it will be very time-consuming. Common techniques used for Diagnostic
Analytics are:
 Data discovery
 Data mining
 Correlations
Future Scope of Data Analytics
1. Retail: To study sales patterns, consumer behavior, and inventory management, data analytics
can be applied in the retail sector. Data analytics can be used by retailers to make data-driven
decisions regarding what products to stock, how to price them, and how to best organize their
stores.
2. Healthcare: Data analytics can be used to evaluate patient data, spot trends in patient health,
and create individualized treatment regimens. Data analytics can be used by healthcare
companies to enhance patient outcomes and lower healthcare expenditures.
3. Finance: In the field of finance, data analytics can be used to evaluate investment data, spot
trends in the financial markets, and make wise investment decisions. Data analytics can be used
by financial institutions to lower risk and boost the performance of investment portfolios.
4. Marketing: By analyzing customer data, spotting trends in consumer behavior, and creating
customized marketing strategies, data analytics can be used in marketing. Data analytics can be
used by marketers to boost the efficiency of their campaigns and their overall impact.
5. Manufacturing: Data analytics can be used to examine production data, spot trends in
production methods, and boost production efficiency in the manufacturing sector. Data
analytics can be used by manufacturers to cut costs and enhance product quality.
6. Transportation: To evaluate logistics data, spot trends in transportation routes, and improve
transportation routes, the transportation sector can employ data analytics. Data analytics can
help transportation businesses cut expenses and speed up delivery times.

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