More and more organizations emphasize data-driven business. And yet, despite all the buzz around it, many don’t have a clear idea of what exactly makes up analytics and how it works.
In this blog post, we will look at four kinds of analytics: descriptive, diagnostic, predictive, and prescriptive. We will also see how these four different types can be used together to create a full 360-degree view of your business performance.
- Descriptive Analytics tells you what happened in the past.
- Diagnostic Analytics helps you understand why something happened in the past.
- Predictive Analytics predicts what is most likely to happen in the future.
- Prescriptive Analytics recommends actions you can take to affect those outcomes.
Descriptive analytics is the simplest form of analytics and provides a picture of what has happened in the past. It’s used to summarize historical data about your business, such as sales reports or product usage. For example, you may want to know how many times users have clicked on an ad for a specific product over time and how much revenue it generated from those clicks.
Use cases of descriptive analytics
- Sales report: You can break down your total sales by region and customer segment, which gives you an idea of where your profits are coming from.
- Marketing campaign performance: You can monitor the traffic through different channels of your online marketing campaign.
- Operation performance: You can track demand for product SKUs across categories in different regions.
Diagnostic analytics is to drill into the data to determine what is happening and why. It requires users to use statistical techniques to determine the root cause of a problem. You can understand which factors are the most or the least impactful on the outcome.
Use cases of diagnostic analytics
- Sales – customer behavioral analysis: You can identify the demographic data and the customer behaviors of the profitable customer segments to understand why they are spending more than the others.
- Marketing social media advertisement ROI: You can look at the unique characteristics of high-performance ad copies to identify the key differentiators.
- Operation supply chain analysis: You can look at the traffic volume to see if it contributes to the demand for certain products across geographic locations.
Predictive analytics is the ability to forecast what will happen in the future. It’s most used because it has a wide range of business use cases and can help you make better decisions. It helps businesses with better planning and avoiding risks.
Use cases for predictive analytics
- Sales forecasting
- Marketing automation
- Forecasting demand
- Predicting customer churn
Prescriptive analytics is the fourth type of analytics method and takes a more proactive approach to the process. It uses descriptive, predictive, and diagnostic analytics to create models that generate the best possible outcomes for a given situation.
Prescriptive analytics is used by businesses to make decisions and take actions based on what they think will happen in the future. This could be something as simple as sending an email when someone visits your site for the third time or as complicated as optimizing existing supply chains through machine learning algorithms.
Use cases of descriptive analytics
- How the sales department can improve the sales.
- How to allocate the budget to different marketing channels to drive more traffic and leads.
- How the operation team determines the volume of the stocks and optimizes the warehousing.
How to Join Four Analytics Methods?
That is why we built NEMESIS, the advanced analytics platform which empowers business decision-makers to build their own advanced analytics solutions all within one platform.
NEMESIS is built specifically for business users, so you are using tools designed from your perspective.
With NEMESIS insights, you can generate dashboards and reports that show how things are right now – descriptive analytics, which is typically used for historical analysis. For diagnostic analytics, you have control over the whole model-building process, from data sourcing to model validation, determining what caused a particular outcome.
NEMESIS also has machine learning techniques and predictive analytics, which empowers the business users to predict future events based on historical data. With the built-in case management system, the executives and the managers can directly assign the analysts to take immediate actions based on prescriptive analytics.
You can use the platform across the organization and for different use cases. This makes the investment much more cost-effective because you are able to solve so many more problems with a single investment.
With NEMESIS advanced analytics platform, analysts can build the ideal tool for your needs that can be deployed across the organization for a fraction of the cost.
Let us have a conversation about how NEMESIS can help you accurately predict your future.