Your company should track and apply analytics to several statistics, such as sales, employee performance and market trends. These statistics can yield a variety of reports to help you spot where your business needs improvements and plan goals to implement those changes. The four types of analytics that you can use to get the most from your statistics are descriptive, diagnostic, prescriptive and predictive. Hiring a data analytic professional, either in-house or outsourced, is the most effective way to generate and use this type of information.
Descriptive
Descriptive analytics most literally describes the data sets you are looking at. When you use descriptive analytics on your business statistics, you report what happened when the data was gathered. For instance, applying descriptive analytics to your monthly statements will tell you how many sales you made during the last month, which departments met benchmarks during that time and the market snapshot for the month. These descriptions are what most people think of when hearing the term “quarterly reports.” Still, a quality business report will use descriptive analytics as a jumping-off point for the other three analytical types. Most data analysts will suggest using more than one type of analytics for the best and most comprehensive business planning.
Diagnostic
First, descriptive analytics gives you a picture of what happened. Then a diagnostic analysis will tell you why it happened by diving deeper and making more connections between data patterns. This type of analytics is beneficial if you are trying to pinpoint where and why your company is underperforming so you can improve those areas more effectively. For instance, if you have a logistics company and are trying to streamline your processes, then descriptive analytics can tell you that the bottleneck is in your scheduling and diagnostic analysis can show you that you need a computer upgrade to keep up with your client management software. Diagnostic reports are a necessary second step for descriptive reports because they offer context to the issues and areas to focus on with solutions.
Prescriptive
This type of analytics will give you a blueprint to help you get from where you are to where you want to be by using the other types of analytics to visualize market changes and trends, pinpoint where your company is struggling and formulate a plan to move forward successfully. This is one of the most valuable and complex ways to use analytics, as it often requires reports of the other three types to build on. For instance, you can use descriptive analytics to describe a sales slump, diagnostic reports to pinpoint an underperforming marketing campaign, predictive to show likely outcomes of changing nothing, and prescriptive analysis to represent the best path forward. When you use this type of analytics to prepare for board meetings, you will be able to present the most comprehensive picture of the company and propose various quality solutions for the next quarter.
Predictive
Predictive analytics tells you what is likely to occur based on what has happened in the past. In most cases, this type of analytics will build on descriptive and diagnostic reports of past trends to project the most likely outcome, allowing you to see what is expected to happen if you continue your current course. You can then use prescriptive reports to suggest courses of action that will lead to better predictive outcomes. While most of these reports can be generated with the right data sets and machine learning, having a data analytics professional help gather, clean and structure the data sets and reports is more effective.
Using various forms of analytics to examine data sets and use business stats can help you grow your company successfully. You can find help with analytics from professional firms that can gather and prepare relevant data from various sources and then perform multiple types of analytics for your company. The reports generated by analytical types can be descriptive, diagnostic, predictive or prescriptive, but it is advised to use all four to generate the most comprehensive quarterly reports possible.
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