If you can master business analytics, then you can analyze data and use it to help companies make data-driven decisions to grow. Data is everywhere and steadily becoming a large part of the growth of most businesses. By learning business analytics, you can enter a secure career field and help businesses learn about their customers to maximize profits.
This article will explain what business analytics is, the core skills required, the components and technology of business analytics, and potential careers and salaries you can secure in business analytics.
What is Business Analytics?
Business analytics is the process of collating, sorting, processing, and studying business data to turn the data into meaningful business insights. Business data analytics involves applying an algorithmic or mechanical process (or other information technology) to look for meaningful correlations in the real world.
The job entails sorting raw data that requires cleaning and analyzing to see if it is useful for a business’ performance or if it is just ‘noise’ that isn’t useful at all. Data analytics is used in several industries to help businesses better understand their customers, improve their advertising campaigns, and personalize their content for customers.
Put simply, you will be using statistical methods to study graphs, charts, and tables of data on customer behavior to extract relevant information. You will then put together a model or plan which the company will use to make informed business decisions in real-time.
Types of Business Analytics
There are four types of business analytics as follows.
- Descriptive Analytics: Turning a business’s data into a picture of what has happened in the past and present. It is the simplest form of analytics and employs data aggregation, mining techniques, and descriptive statistics to provide insight into customer behavior. Strategies can then be developed in targeted marketing and service improvement.
- Diagnostic Analytics: This type employs techniques such as drill-down, data discovery, data mining, and correlations to uncover the root cause of events. It uses probabilities, likelihoods, and the distribution of outcomes to understand why events occurred.
- Predictive Analytics: Forecasts the possibility of future events using statistical predictive models and machine learning techniques. This type of business analytics builds on descriptive analytics using machine learning experts and trained data scientists who use algorithms and statistical models.
A common application of predictive analytics is sentiment analysis. Existing text data is collected and then analyzed to predict their sentiment toward a new subject (positive, negative, or neutral).
- Prescriptive Analytics: Goes a step beyond predictive analytics, providing recommendations for the next best action and allowing potential manipulation of events to drive better outcomes. This form is capable of not only suggesting all favorable outcomes according to a specified course of action, but can also recommend specific actions to deliver the most desired result.
What is Big Data?
Big data analytics is extracting information from and dealing with data sets that are far too large or complex to be dealt with by traditional data-processing application software. The act of accessing and storing large amounts of information for analytics has been around a long time.
But the concept of big data gained momentum in the early 2000s when industry analyst Doug Laney articulated the now-mainstream definition of big data as the three V’s: Volume, Velocity, and Variety.
Core Business Analytics Skills
To be a successful business analytics professional, you should possess the following analytical skills.
- Statistical analysis and many other types of data analysis
- Being able to present findings in a clear and concise manner
- Natural curiosity and drive to problem solve and piece-data-puzzles together
- Logical and critical thinking
- Solution planning
Components and Technologies of Business Analytics
With the advancement of analytics technologies, business data analysts are now capable of sorting through ever-growing amounts of data to create deep insights at a faster rate.
Below are some of the key components and technologies used in business analytics:
- Data Aggregation: This is the start of the process as business data analysts collect data and summarize it. Companies often collect the data of their online customers and website visitors. The aggregate data would include statistics on customer demographics and behavior metrics, such as average age or number of transactions. This aggregated data can be used by marketing teams to personalize messaging, offers, and more.
- Data Mining: The term data mining refers to the process of using software to sort through vast amounts of data to identify patterns and discover relevant information. Today’s data mining technologies allow you to complete these tasks very quickly.
The concept of business intelligence data mining has evolved and is widely used by leading corporate companies. Business intelligence can help generate the latest information and use it for competition analysis, market research, consumer behavior, geographical information analysis, and more.
- Association and Sequence Identification: In many cases, consumers will perform similar actions at the same time or perform predictable actions in a sequence. This data can reveal patterns like:
- Association: An example is if two different items are being purchased often in the same transaction, such as multiple pieces of jewelry by the same designer or a toothbrush and toothpaste.
- Sequencing: An example is a consumer booking an airline ticket, followed by booking a hotel room or reserving a car.
- Text Mining: Mining information from text, like social media, blogs, comments, etc.
- Forecasting: Predicts future events or behaviors based on historical data that can be generated by analyzing processes that occur during a specific period or season. Think holiday merchandise like around Christmas time.
- Predictive Analytics: Companies can create and manage predictive scoring models, proactively addressing customer churn (the rate that customers stop doing business with an organization), and narrowing down customer age brackets, income levels, the lifetime of existing accounts, and availability of promotions.
- Optimization: Is when companies can identify best-case scenarios and next best actions by developing and engaging simulation techniques.
- Data Visualization: Information and insights drawn from data that can be presented with highly interactive graphics, including modeling output.
Best Business Analytics Programs
There are plenty of options out there for business analytics programs, from university to online programs such as those at Harvard. Below are our top five business analytics master’s degree programs in the United States to help begin your research.
Program: Master of Business Analytics
The one-year Master of Business Analytics at MIT is one of the best programs in analytics in the US. The program prepares students for careers that apply and manage modern data science to solve critical business challenges.
Where: Raleigh, NC
Program: Master’s Degree in Business Analytics
This 10-month full-time program is STEM-eligible and ranked #3 worldwide. The Master’s Degree in Business Analytics at UT Austin focuses on statistics, programming, and predictive analysis in a business context.
Where: Wausau, WI
Program: Master’s Degree in Business Analytics
The Master’s Degree in Business Analytics program at USC Marshall is one of the most competitive programs in the US. The USC Marshall MSBA program is a data science STEM program with a business lens. It covers a range of business areas including finance, operations, marketing, management, supply chain, and HR.
Where: Watertown, SD
Program: Master of Science in Analytics
This Master of Science in Analytics (MSA) program is a novel curriculum aimed squarely at producing graduates with the multi-faceted skills needed to draw insights from complex data sets and to be able to communicate those insights effectively.
It is the product of a three-year collaboration by an interdisciplinary group including mathematicians, computer scientists, statisticians, economists, geographers, operations researchers, and faculty with expertise in various fields of business and management.
Where: Great Bend, KS
Program: Master’s Degree in Business Analytics
This MS in Business Analytics program at Rochester provides excellent training in Python, R, and Tableau to help you leverage big data insights. The Simon Business Analytics curriculum is designed to provide you with a strong foundation in both analytics and business–covering statistics, analytics, and core business areas. Also, it’s a great program if you are from an economics, marketing, and non-engineering (but quantitative) background.
Business Analytics and Big Data: Jobs and Salaries
Someone studying business analytics may think their only career option is as a business analyst or statistical analyst. However, there are many different fields you could enter and the job outlook for these various business analytics fields is quite high, according to the Bureau of Labor Statistics.
For example, market research analysts’ jobs are projected to grow 18 percent by 2029, and the employment of information security analysts is projected to grow 31 percent.
Below are some of the business analytics and big data careers you could pursue after earning your degree.
- Chief Data Officer: $180,458
- Chief Technology Officer: $159,149
- Data Architect: $116,710
- Application Architect: $112,871
- Machine Learning Engineer: $110,739
- Data Scientist: $88,779
- Project Manager: $73,901
- Statistician: $73,054
- Market Research Analyst: $63,120
- Data Analyst: $60,208
Conclusion: Business Analytics Is the Future
Business analytics and data analysis are becoming more and more important as the world and business become more tech-reliant. In 2017, it was estimated that by the year 2040, 95 percent of purchases will be through eCommerce. Since COVID-19 in 2020, this has become even more apparent.
This trend makes business analytics a wonderful career choice for those interested in the process of collating, sorting, processing, and studying business data to turn it into meaningful business insights.