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Descriptive AnalyticsUnderstanding and Analyzing Business Performance

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“Analytics” – What Does It Really Mean?

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“Analytics” - Definition“.. the process of analyzing information from a particular domain, such as website analytics..”

“… applying the breadth of BI capabilities to a specific content area (for example, sales, service, supply chain and so on).”

“…describe statistical and mathematical data analysis that clusters, segments, scores and predicts what scenarios are most likely to happen..”

Gartner, IT Glossary > Analytics

“Analytics facilitates realization of business objectives through reporting of data to analyze trends, creating predictive models for forecasting and optimizing business processes for enhanced performance.”

Institute for Operations Research and Management Science (INFORMS)

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Analytics – Five Key Areas Of Customer Needs

Business analytics centers around five key areas of customer needs:

Information access Insight Foresight

Business agilityBusiness agility Strategic alignmentStrategic alignment

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Analytics – Three Categories

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Descriptive Analytics

also referred to as business intelligence provides a clear understanding of what has happened in the

past through:– visualization of key performance metrics, or – data in a report or dashboard

Today, the past can be as recent as just a millisecond ago

INTUITION needed and ability to INTERPRET the data

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Descriptive Analytics – Three Categories

Standard Report and Dashboarding

Adhoc reporting

Analysis/Query/Drill-down

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Descriptive Analytics – The “most understood” Analytics

most commonly used and most well understood type of analytics:– Categorizes– Characterizes– Consolidates– Classifies Data

Includes: – Dashboards– reports (e.g., budget, sales, revenue and costs)– various types of queries

Tools provide ways of interfacing to enterprise data sources, including: – report generation, – distribution capability– data visualization facilities

Descriptive analytics techniques are most commonly applied to structured data help to provide an understanding of the past as well as events occurring in real-

time

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Descriptive Analytics - Implementation Many are implemented though out-of-the-box business intelligence software

solutions or spreadsheet tools

version control difficulties may result from a proliferation of spreadsheets

Advantage of a descriptive analytics software platform: connectivity to the underlying trusted information management system The ability to work with data along multiple dimensions to gain insight

– what is happening now?

– what happened in the past?

descriptive analytics relies on the human review of data– does not contain robust techniques that facilitate understanding what might happen in

the future

– does not provide the tools to suggest decisions of what should be done next

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Descriptive Analytics & Business Performance Insight

Descriptive analytics does provide significant insight into business performance

Enables users to better monitor and manage their business processes

Often serves as a first step in the successful application of predictive or prescriptive analytics

Organizations effectively using descriptive analytics typically have:

– A single view of the past

– Can focus their attention on the present

– Not lose time on reconciling different views of the past