Business Analytics: What's The Buzz Behind Big Figures?

According to market research firm IDC, the business analytics market is set to grow to $50.7 billion by 2016. But what is business analytics? Business
analytics is the process of exploring an organization's data to derive patterns and relationships that can be utilized to make critical business decisions
that will change the direction of an organization. It is a tool that is increasingly being used to gain a competitive advantage, by acquiring insights that
cannot be gained through plain surveys or observation. According to IBM's smarter analytics forum, “7 out of every 10 CEOs are making significant
investments in their organizations' ability to draw meaningful customer insights from available data”.




So, how does analytics work? Initially, a business goal is decided upon, and the data needed to achieve the goal is gathered, usually filtered and stored
in a data warehouse. This data is then put through analytic tools, ranging anywhere from a simple spreadsheet to complex predictive models. These analytic
models produce patterns and trends using past data, which can then be projected into the future to predict future trends in a certain aspect of the
business. For example, big retail chains like Wal-Mart would store customer data in a warehouse, and use analytics to derive specific patterns, such as “At
what timings is this item selling fast?” or “What layout of the store results in the highest turnover?”. While there is much debate on whether business
intelligence and analytics mean the same thing, there is a subtle difference between them. Business analytics is focused on analyzing what happened, to
figure out something that happened in the past. However, analytics is focused more on the questions of “Why it happened?” and “What will happen in the
future?”, as it's aim is to support real-time decision making and projecting future trends based on historical data.




Analytics has also evolved with the times to cater to the changing needs of businesses. Initially, tools such as OLAP and reports were used to provide
“descriptive” information in order to solve business problems. This was followed by analytics tools such as predictive models, forecasting, and simulations
which provided “predictive” information on trends. This information proved to be critical for businesses, who needed to predict future trends such as
consumer behavior to stay competitive in the market. Even this form of business analytics is now evolving to accommodate prescriptive information, which
answers the question “How can we achieve the best outcome?” from a situation, including variables such as economic climate. (Source:“IBM Smarter Analytics Media Symposium”). As a business moves towards the adoption of prescriptive analytics, their competitive advantage
increases.




According to IDC, organizations embracing analytics are 2.2 times more likely to outperform their industry peers. In what ways does an organization's
performance get enhanced by the usage of analytics? We interacted with various industry experts to bring you 5 ways that prove adopting business analytics
is the way to go!