Four analytical approaches that every company needs
11 Mar 24
Intelligence
Business analytics has never been more important as companies seek to answer real-world questions
It’s impossible to ignore that a lot is happening in the world. Russia invading Ukraine, ongoing Israeli strikes against Hamas, shipping being targeted in the Red Sea and a surge in violence in South America related to drug cartels and gangs.
On a daily basis countless kinetic and non-kinetic interactions occur globally, each when reported in the press contain elements of fact and fiction. It’s in this turbulent environment that business activity has to be planned and conducted. No easy task!
With all this complexity, business analytics have never been more important as companies seek to answer real-world questions such as: Will the cost of transporting my materials increase? Will there be another global pandemic? What impact will a change in leader in country X, Y or Z have on my business? What are the future trends in technology or materials that may be disruptive? How will inflation, recession or deflation impact my business?
To start to answer complex business questions, four analytical approaches can be applied, which when deployed correctly provide a detailed multi-layered set of analytical insights:
Descriptive analysis
Involves interpreting historical data to understand and summarise past trends, patterns, and critical insights.
Diagnostic analysis
Why did an event / incident occur? Why are we not growing as rapidly as we wish? Why can we not get our products to a location when needed?
Predictive analysis
Using statistical algorithms and, increasingly, machine learning to forecast future trends and outcomes based on historical data patterns.
Prescriptive analysis
Suggests options for decisions based on information derived from descriptive, diagnostic, and predictive analysis.
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Each of these methodologies helps generate data points for the other and places the analysis in its correct context. Increasingly software solutions are available to help sort and triage the data involved in each of the steps. The caveat to this is that it still requires trained analysts to interact with the software or the old adage, rubbish in, rubbish out becomes an issue!
Providing actionable insights ensures that you can navigate complex environments and dynamically adapt your strategies, and grow your business, as well as limit costs and risks, which at the end of the day is what business analysis is all about; anything else is simply crystal ball gazing….
Are you in need of support with developing your team's analytical capabilities or outsourcing your data analytics? If so, please contact our Head of Intelligence to discuss how we can assist your business growth.
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