Before I answer that question, let’s start with “What IS Business Analytics?”
The most common definition you’ll typically run across describes Business Analytics as consisting of three main parts:
- Descriptive Analytics
- Predictive Analytics
- Prescriptive Analytics
Descriptive Analytics tells you what has already happened, and it is the first stage of Business Analytics. Predictive Analytics uses historical data to predict likely future outcomes, and it is the second stage of Business Analytics. Prescriptive Analytics tells you how to take advantage of a predicted future outcome, and it is the last stage of Business Analytics.
Getting started with Business Analytics, then, means getting started with Descriptive Analytics. As I see it, the most practical definition of Descriptive Analytics is “Traditional Business Intelligence plus Descriptive Statistics.”
- Traditional BI typically gives you dashboards, reports and data cubes that let you roll up and drill down into data, slicing and dicing around to find out what has already happened.
- Descriptive Statistics consist of measures like mean, median, mode and standard deviation. It can include handy visual tools like histograms, box plots and scatter plots.
When added to your dashboards, reports and data cubes, these statistical measures and tools give you even deeper insight into what your data is telling you about how your business performs. It forces you and your colleagues to have more analytical conversations about your data, and the information it provides. With new insight, you can make better decisions and take smarter actions to reduce cost, increase yield or improve quality of your goods and services. When you add Descriptive Statistics to Traditional BI, you take the first step into Business Analytics.
If you haven’t yet invested in an enterprise BI infrastructure, fear not! Instead of starting your Business Analytics journey with enterprise-wide data, you can start your journey using process level data, with a much smaller investment in “Business Process Analytics.” As would be the case for a company with an existing BI infrastructure, the first step you’ll want to take is applying Descriptive Statistics to the data created by a particular process you want to study and optimize. However, if you haven’t yet automated the process of interest, then you should do this first. There are cost-effective ways to do simple process automation, creating the kind of data you need for Business Process Analytics.
And fortunately, none of these first steps for using Business Analytics in your organization require big data, or big dollars, to get started.
If you’d like to learn more, or get a feel for your current capabilities to get started with Business (Process) Analytics, I can help. Drop me a line at email@example.com, and we can jump on a call to discuss it further.