Aug 24, 2009
Analytics
Analytics, in its simplest terms, is looking at data and creating meaningful insight, or understanding. It is used, primarily by businesses – either themselves or using a third party or partner company – to make decision/s using data and create useful actions based on data – be that customer, prospect or transactional data that the company has available to them.
Analytics is a more logical and scientific approach to making business decisions and it is based on the use of data to enable this. Analytics uses information from the past to describe and often predict the future. It enables managers to make decisions based on previous data.
Analytics closely resembles statistical analysis and data mining, but tends to be based on modeling involving extensive computation. Some fields within the area of analytics are enterprise decision management, marketing analytics, predictive science, strategy science, credit risk analysis and fraud analytics.
Analysts are often mathematically trained in statistical techniques. Business analytics is often undertaken by individuals who are more knowledgeable about market sectors and industries than mathematics and, in marketing, the proliferation of marketing and customer analysis software has reduced the need for such qualifications.
There are two main types of analytics:
1. The study of business data. This is done using statistical analysis in order to discover and understand historical patterns with an eye to predicting and improving business performance in the future.
2. Analytics is used extensively in marketing and customer relationship management (CRM). CRM analytics comprises all programming that analyses data about an enterprise's customers and presents it so that better and quicker business decisions can be made.
CRM analytics can be considered a form of online analytical processing and may employ data mining. As Web sites have added a new and often faster way to interact with customers, the opportunity and the need to turn data collected about customers into useful information has become generally apparent. As a result, a number of software companies have developed products that do customer data analysis.