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The world is experiencing an 鈥渁ge of data鈥� where data is tracked, collected, analyzed, bought, sold and used to make decisions. In today鈥檚 data-driven global economy, businesses vie for consumer data. They want to understand customer behavior: how they think, what they enjoy, what entertains them and what drives their purchasing decisions.   

In this post, we’ll discuss how data is used, the different types of business analytics, as well as the required skills and career outlook for business analysts. 

But first, let鈥檚 take a step back to answer the question, what is business analytics? 

What Is聽Business聽Analytics?聽

Business analytics is a crucial component of any competitive, 21^st century organization. Similar to data analytics, which focuses on data trends across industries, business analytics has a narrower focus aimed at improving business performance and decisions. 

We can also define business analytics as the data that organizations collect and analyze to inform decision-making and improve business decisions and operations. Data findings influence various aspects of an organization, such as advertising, rewards programs, product promotion and website design. 

Businesses generally collect , which are personal, engagement, behavioral and attitudinal. Business analytics follows a basic four step process: 

1. Data collection:聽Gathering information from stakeholders, who are usually consumers. Consumers share data both directly and indirectly.聽

2. Data preparation and management:聽The process of preparing data for analysis and securely storing it for future use. This is a crucial part of data analytics, as businesses and organizations聽are responsible for聽ensuring data is securely stored and聽maintained.聽

3. Data analysis:聽Running data through different statistical analyses to create outputs that聽identify聽trends and predict scenarios.聽

4. Data visualization:聽The process of showing data results.聽Bar graphs and pie charts are two examples of data visuals that are used to illustrate data results.聽

Business Analytics in the Data Ecosystem聽

Business analytics is part of a larger data ecosystem that is comprised of BI, BA and DS.  

• BI (business聽intelligence):聽Focuses on reporting past performance (dashboards, KPIs)聽and asks,聽“What happened?”聽

• BA (business聽analytics):聽Focuses on future action based on insights from the past聽and asks,聽“What should we do?”聽

• DS (data聽science):聽Focuses on building complex models (often machine learning) to solve novel, ambiguous problems聽

Why聽Business聽Analytics Matters in Today鈥檚 Digital World聽

Successful businesses rely on business analytics for operations and decision-making. Essentially, there are  why business analytics is important. 

• Improve efficiency and聽optimize聽operational processes聽

• Real-time insights, making quick decisions and fixing issues as they arise聽

• An accurate聽forecast to understand consumer market trends and predict outcomes聽

• Increased revenue due to data-informed decision-making聽

Real-time insights are now available due to the digital world, which enables quick and broad data collection. 

Types of聽Business聽Analytics聽

Descriptive Analytics聽

Descriptive analytics informs business leaders about what has happened. It focuses on collecting historical data, understanding the background of a topic and asks the question: What happened in the past? The answer is important, as historical knowledge drives decision-making. 

Businesses use dashboards with key performance indicators (KPIs) to aid in their decision-making, as these tools offer an illustrative analysis of historical data. Data is displayed through graphics and illustrations that show data findings and trends. 

Diagnostic Analytics聽

Diagnostic analysts aim to understand why an event occurred. It identifies and analyzes the root cause of a historical event and uses statistical analysis such as data mining, correlation analysis, drill-down methods and statistical modeling to understand the reasons behind outcomes. 

Predictive Analytics聽

Predictive analytics focuses on forecasting future activities and predictive modeling using descriptive data findings. 

Prescriptive Analytics聽

Prescriptive analytics informs leaders of the actions that should be taken. It answers the question: What steps should the business take? Through the use of data modeling and scenario planning, leaders use prescriptive analytics to determine how to move forward.  

Core Skills and Technologies for Business Analysts聽聽

Individuals interested in becoming a business analyst need the following core skills and technology literacy: 

• Collecting and analyzing data聽

• Using software tools, such as Excel, Qualtrics,聽Statistical Package for the Social Sciences (SPSS),聽Lucidchart聽and Trello聽

• Reporting data results through visualization, such as bar graphs and pie charts聽

• Deriving聽meaning from data, systems thinking and problem-solving聽

• Effective communication and presentation聽

Essential Technical Skills for a Business Analyst聽

It is essential for business analysts to stay current with the latest technologies. Various technologies are used for different technical skills, such as data analysis, project management, process modeling and data visualization. Further examples include: 

• 顿补迟补听飞谤补苍驳濒颈苍驳:聽SQL, otherwise known as structured query language聽(mandatory for data retrieval)聽

• 笔谤辞驳谤补尘尘颈苍驳/蝉迟补迟颈蝉迟颈肠补濒听迟辞辞濒蝉:聽Python or R (for statistical modeling and automation)聽

• Visualization:聽Tableau, Power BI聽dashboards聽or similar tools (making data accessible)聽

• Foundational:聽Advanced Excel (a foundational starting point)聽

Critical Soft Skills聽

Business analysts must also demonstrate critical soft skills like: 

• 颁辞尘尘耻苍颈肠补迟颈辞苍听补苍诲听诲补迟补听蝉迟辞谤测迟别濒濒颈苍驳:聽The ability to translate complex data findings into narratives that non-technical stakeholders can understand and act upon聽

• 颁谤颈迟颈肠补濒听迟丑颈苍办颈苍驳/辫谤辞产濒别尘-蝉辞濒惫颈苍驳:聽Defining the right business problem before jumping into the data聽

• 叠耻蝉颈苍别蝉蝉听补肠耻尘别苍:聽Understanding how the聽business operates聽(finance, marketing, supply chain) to provide relevant context for the analysis聽

How Business Analytics Drives Value Across Industries聽

Business analytics informs an entire organization. It also drives other decisions and policies including: 

• Retail/e-commerce:聽Personalized product recommendations, inventory聽optimization聽and sales forecasting聽

• Healthcare:聽Predicting hospital readmission rates,聽optimizing聽staffing聽and analyzing treatment efficacy聽

• Finance:聽Fraud detection (identifying聽anomalous transactions) and risk modeling聽

• 尝辞驳颈蝉迟颈肠蝉/蝉耻辫辫濒测听肠丑补颈苍:聽Optimizing聽delivery routes (prescriptive聽analytics) and predicting equipment maintenance needs (predictive聽analytics)聽

Growing Demand for Business Analysts聽

With the increasing demand for data for business decisions, there is an explosive growth in business analytics roles. Diverse industries hire business analysts, including: 

• Tech companies like Google and Meta (Facebook/Instagram)聽

• Online shopping companies like Amazon and Wayfair聽

• Financial services like JPMorgan Chase聽

• Retail like聽SharkNinja聽

• Education companies like Pearson聽

Careers in Business Analytics聽

According to the ,* in 2024, the median hourly wage for management analysts was $48.65, which translates to $101,190 per year. 

Business Analytics Roles
Role	Description	Skills Needed
Business analyst	Collects, analyzes and reports data, as well as gathers meaning from data to inform business decisions	Quantitative research, creating data visuals and reports, and communicating with leadership and colleagues Ability to identify how data relates to a specific business need
Data analyst	Conducts data collection, analysis and reporting	Quantitative research, creating data visuals and reports, and communicating with leadership and colleagues Knowledge of how data relates to organizational and industry needs
Business intelligence analyst	Works with departments throughout an organization to understand overall needs Collects, analyzes and reports data findings, as well as identifies departmental needs for a 鈥渂ig picture鈥� approach to decision-making	Quantitative research, creating data visuals and reports, effective communication, listening, and collaboration
Data scientist	Understands and explains challenging data analyses Practices modeling and helps inform decisions through data findings and collaboration	Identifying and fixing data errors, collaboration, and effective communication
Analytics manager	Oversees the data analytics department, processes, projects and decision-making	Leadership, effective communication and data-driven decision-making

Future Trends in Business Analytics聽

The most significant impact on business analytics is the advancement of artificial intelligence (AI), which is changing how businesses collect, analyze and report data. Future trends gaining momentum that will continue to grow and shape business decisions include: 

• AI-powered analytics聽

• Generative AI for reporting聽

• Real-time analytics聽

• Self-service BI聽

• Predictive automation聽

• Cloud-based data platforms聽

This means that individuals working in business analytics, as well as those seeking to pursue these professions, must possess literacy in AI technology. To address this need, colleges and universities have developed AI-focused short courses, certificate programs and degree programs, as well as professional development training aimed at preparing an AI-informed workforce. 

FAQs About Business Analytics  

*BLS classifies business analysts under management analysts. Accessed Feb. 2, 2025. 

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