What is Business Analytics? Meaning, Importance & Careers

Companies are increasingly relying on data to drive their strategies, which has resulted in high demand for skilled business analytics professionals. The field of business analytics is transforming how companies operate, make decisions, and find a competitive edge in the marketplace. For students eyeing a career in business, mastering business analytics is key to becoming highly desirable and marketable in the workplace. 

Business analytics combines data analysis, statistical methods, and predictive modeling to provide actionable insights and improve overall strategy. This area of expertise empowers businesses to have a competitive edge by streamlining supply chains, customizing customer targeting techniques, and uncovering unique trends and insights for more informed decision analysis. 

Summary: What is Business Analytics?

Business analytics is the practice of using data to identify patterns, trends, and relationships that inform business decisions. It leverages various tools and techniques to analyze historical data and predict future outcomes. Organizations generate and store vast amounts of data, which is why understanding the concepts behind business analytics is crucial in the identification, extraction, and reporting of data that is more precise and user-friendly in order to make strategic business decisions for a company. 

Data science is a complementary field to data analytics, but they differ in their business impact. Data science focuses on data processing, scientific research, and technological innovation, whereas business data analytics extracts information that is insightful for determining metrics for business performance, evaluation, and decisions. 

Why is Business Analytics Important?

The key driver of business analytics use is its ability to transform data into valuable insights, which enable businesses to make data-driven decisions that can increase revenue, improve operational efficiency, and enhance company loyalty. Business analytics allows companies to evaluate new opportunities, perform benchmarking analyses, and optimize their resources. 

One of the most vital benefits of the use of business analytics is its ability to provide more strategic, evidence-based decisions rather than the high-error risks that are posed by more manual processes. For example, businesses can use analytics to forecast demand, optimize pricing strategies, and streamline supply chains, all of which contribute to a stronger revenue output and operational innovation. 

The 3 Types of Business Analytics

Business analytics can be categorized into three main types: descriptive, predictive, and prescriptive analytics. According to a recent study, companies that leverage predictive and prescriptive analytics see a 5-6% increase in productivity and profitability compared to those that rely solely on descriptive analytics. Statistics such as these demonstrate the power and impact of advanced analytics in driving competitive advantage and operational efficiency in the professional world. See below for further details:

Descriptive Analytics

Descriptive analytics seeks to describe an event, phenomenon, or outcome. It helps understand what has happened in the past to provide businesses a foundation to track trends and patterns. 

Descriptive analytics can be applied to various operational processes such as workflow, inventory, sales figures, and revenue reports. Operational reports offer a company a historical overview and snapshot of its operations.

Examples and Use Cases

• Reporting: Gathering data for KPI reporting. 

• Dashboards: Visual representations of data that are user-friendly and can provide quick analysis. 

• Trend Analysis: Identifying trends and patterns over a specific timeline.

Predictive Analytics

Predictive analytics answers the question, “What might happen in the future?” It uses historical data to forecast and predict future potential scenarios that can help drive strategic decisions. 

Ultimately, predictive analytics is a business analytics method that uses machine learning to create models that predict future events. Predictive modeling and data mining are also automatic techniques utilized in this process. 

Examples and Use Cases

• Sales Forecasting: Using historical data from previous financial statements and industry benchmarks to project sales and revenue.

• Risk Assessment: Evaluating the level, likelihood, and impact of various risks that may occur due to industry and market variability.

• Customer Behavior: Predicting future consumer buying patterns by using past customer activity.

Prescriptive Analytics

Prescriptive analytics combines data, algorithms, and business rules to guide decision-making. Prescriptive analytics focuses on the next steps and all relevant factors to achieve goals or yield robust recommendations for future planning. It is a technique that often uses machine-learning algorithms to filter through large amounts of data faster than a manual process. 

Examples and Use Cases

• Supply Chain Optimization: Recommending actions to streamline supply chain operations and reduce costs.

• Marketing Campaigns: Helping marketing teams analyze campaign performance, identify patterns in customer behavior, and target an audience more precisely. 

• Operational Efficiency: Identifying bottlenecks and recommending process improvements to enhance productivity.

Business Analytics vs. Business Intelligence: What is The Difference

Business intelligence (BI) focuses on collecting, processing, and visualizing data to help businesses understand their current state. It prioritizes descriptive analytics, which involves collecting, processing, and presenting historical data to identify trends and patterns. For example, a company might use business intelligence to analyze past sales data to understand which products were most desirable with the highest returns during a specific period. 

On the other hand, business analytics uses data to identify patterns, predict outcomes, and prescribe actions. This approach leans into predictive and prescriptive analytics, using statistical models and algorithms to predict future trends and determine the best course of action. It is forward-looking and significantly helps enact future strategies, rather than just fulfilling compliance needs. There is a difference in business intelligence tools that inform businesses with informative information, versus business analytics that can provide momentum to make actual strategic choices due to the increased level of detail provided by the analysis. 

The Growing Demand for Business Analytics Professionals

The demand for professionals skilled in business analytics is continuously increasing. According to the U.S. Bureau of Labor Statistics (BLS), employment of management analysts, which includes business analysts, is projected to grow 11% from 2022 to 2032, much faster than the average for all occupations. The ability to turn data into actionable insights is a skill that is still fairly rare, which makes the need to fill these roles even more highly desired.

The average salary for business analytics professionals varies depending on experience, location, and industry. It can be anywhere from $75,000 to over $120,000 per year. There are a variety of roles such as data analysts, consultants, market analysts, risk associates, data scientists, etc. This lucrative career path offers not only financial rewards but also opportunities to work on impactful projects that shape the future of businesses. 

Building Your Business Analytics Skills: Certifications and Courses

There is significance in obtaining relevant certifications and completing courses to further your career capabilities within business analytics. Certifications and courses can enhance analytics skill sets in a structured learning format. They can also help professionals maintain up-to-date knowledge of the landscape and gain hands-on experience with the latest tools and methodologies. 

Certifications can offer validation of expertise and credibility, enhancing career prospects and helping differentiate among other career professionals. See below for certification suggestions:

Start Your Business Analytics Career with a Graduate Certificate

One effective way to start your career in business analytics is by enrolling in a graduate certificate program, such as those offered by the Crummer Graduate Certificate Programs. Crummer offers credit-bearing graduate certificates in Business Analytics and Entrepreneurship to help you acquire specialized skills and knowledge that enhance your career prospects, gain valuable expertise in a specific field, and improve your adaptability in a dynamic job market.

Other Certifications and Courses

Other certifications to consider while working to advance your knowledge and base business analytics skills are listed below:

• Certified Business Analytics Professional (CBAP): certification that validates your expertise in business analytics and strategic decision-making.
• Professional in Business Analysis (PMI-PBA): certification that focuses on the analysis skills required to support project management and business objectives.
• Certified Analytics Professional (CAP): certification that demonstrates your ability to transform complex data into valuable insights.
• Agile Analysis Certification (AAC): certification that emphasizes agile methodologies and their application in business analysis.

Conclusion: The Future of Business Analytics

For students and aspiring professionals, mastering business analytics opens doors to exciting career opportunities and markets you as a valuable asset in any organization. As the marketplace continues to be highly data-driven, the importance of analytics will only increase, as it enhances the ability to make well-rounded and insightful decisions for business. Obtaining knowledge in this area of expertise will strengthen your business acumen and position you in a competitive job market. Take advantage of the growing business analytics industry today!