Types of Data Analytics to Drive Your

Business
 With the widespread use of technology and the increasing
digitalization of businesses, companies now have access to vast
amounts of self-generated data from multiple sources.

And with data comes opportunity.

Data But what good is all that data if you can’t easily interpret it?

Analysis How do you separate the useful data from the rubbish?

This is where data analysis comes into play.

• Data analytics is the process of
transforming raw data into actionable
insights that can drive business growth.
And the best part? There are five
different types, each designed to answer
specific questions and help you make
informed decisions based on your data.
• So, let’s dive in and take a closer look at
these five types of data analytics and
how they can benefit your team.
 Types of Data Analytics
1. Descriptive analytics: This describes what has
happened over a given period of time. Have the
number of views gone up? Are sales stronger this
month than last?
2. Diagnostic analytics: This focuses more on why
something happened. This involves more diverse data
inputs and a bit of hypothesizing. Did the weather affect
beer sales? Did that latest marketing campaign impact
sales?
3. Predictive analytics: This moves to what is likely going
to happen in the near term. What happened to sales
the last time we had a hot summer? How many weather
models predict a hot summer this year?
4. Prescriptive analytics: This suggests a course of action.
If the likelihood of a hot summer is measured as an
average of these five weather models is above 58%, we
should add an evening shift to the brewery and rent an
additional tank to increase output.
5. Cognitive
 1. Descriptive Analytics
• Business intelligence and data analysis rely
heavily on descriptive analytics.
• It assists organizations in comprehending
their data and providing insights into what
has happened in the past.
• The main goal of descriptive analytics is to
summarise, describe, and understand data
patterns, trends, and distributions.
• It provides a historical view of data and
helps organisations to answer questions
such as “What happened?” or “What was
the trend?”
 Summarisation of Data: Descriptive analytics
summarises large and complex data sets into
easy-to-understand information.
Understanding Data Patterns: Descriptive
Key analytics helps organisations to understand the
patterns and trends in their data.
benefits: Identifying Anomalies: Descriptive analytics can
help organisations to identify unusual patterns
and anomalies in their data.
Historical View: Descriptive analytics provides a
historical view of data, which can help businesses
to understand how their business has evolved.
Examples of Descriptive Analytics in Business

Sales and revenue analysis: You can use descriptive analytics to see what months or days had the highest
sales and adjust your marketing strategy accordingly.

Customer behavior analysis: Descriptive analytics can give insight into customer behavior, such as which
products they buy the most, how frequently they purchase, and which promotions they respond to best.

Market share analysis: You can see how your brand stacks up against your competitors by analyzing
market share data.

Inventory Analysis: Manufacturers and retailers can use descriptive analytics to track inventory levels,
identify trends in demand, and optimize their supply chain.
 2. Diagnostic Analytics
• Diagnostic analytics is a data analysis focused
on finding the root cause of a particular
problem or issue.
• Businesses use it to investigate and explore
data to understand the reasons behind past
events, trends, and outcomes. In other words,
it’s all about answering the question, “Why
did this happen?”
• Diagnostic analytics is often used in
combination with descriptive analytics to
provide a comprehensive understanding of a
situation or issue.
• Descriptive analytics summarises what has
happened, while diagnostic analytics helps us
understand the underlying causes of that
behaviour.
 Uncovers the root cause of a problem –

Key This approach involves analysing data to

identify patterns, trends, and anomalies
that can explain why a problem or issue is
occurring.

benefits: Can be used across the business –

Diagnostic analytics can be applied to
many issues, including troubleshooting,
optimisation, fraud detection, and root
cause analysis
Applications of Diagnostic analytics
Cause-and-Effect Analysis: Root cause analysis is an essential application of diagnostic analytics
in business. Big companies like Amazon leverage vast amounts of customer purchase history,
browsing behaviour, and shipping data to identify operational issues and find the root cause of
problems.

Supply Chain Analytics: Organisations use diagnostic analytics to identify the root causes of
supply chain issues, such as delayed shipments, inventory shortages, and quality problems.

Optimization: Companies use diagnostic analytics to identify areas for improvement and
optimize their processes. For example, a manufacturer might analyse production data to
determine why they are encountering bottlenecks in the production line and find ways to
improve efficiency.
Fraud detection: Using diagnostic analytics, companies can identify patterns and anomalies in
their data that might indicate fraud, such as unusual spending patterns or suspicious
transaction activity.
Predictive Analytics

• Predictive analytics is a type of

data analytics that uses
advanced statistical
algorithms, machine learning,
and other techniques to predict
future events or outcomes.
• It aims to help organizations
make proactive decisions and to
provide insights into potential
risks and opportunities.
 It uses statistical algorithms and machine-learning
techniques

Key Predictive modelling for forecasting and

estimating future outcomes

benefits Identification of patterns and trends in data

Proactive decision-making for organisations

Predictive analysis for risk assessment and

opportunity identification
Examples of Predictive Analytics in Action
Retail Industry: Retail companies use predictive analytics to analyse
customer data and forecast future sales. This information is used to
optimize inventory levels and improve supply chain management.

Banking and Financial Services: Banks and other financial institutions

use predictive analytics to detect fraud, assess credit risk, and identify
potential investment opportunities.
Healthcare Industry: Healthcare organisations use predictive analytics
to forecast future demand for medical services, identify at-risk
patients, and improve patient outcomes through personalized care
plans.
Manufacturing: Manufacturers use predictive analytics to predict
when equipment is likely to fail, allowing them to schedule
maintenance and prevent unplanned downtime.
 4. Prescriptive Analytics
• Prescriptive analytics is a type of analytics that
takes predictive analytics one step further by
providing recommendations and suggestions
for action based on the predictions made.
• It combines predictive analytics with
optimisation algorithms, decision science, and
rule-based systems to help organisations make
informed decisions and take proactive
measures to optimise outcomes.
• Prescriptive analytics answers the question,
“What should we do?” by analysing available
data and recommending a course of action to
achieve desired results.
 Decision optimisation:
Prescriptive analytics uses mathematical algorithms and optimization
techniques to find the best possible solutions for a given set of
conditions and constraints.
Predictive modelling:
Predictive models use statistical algorithms, machine learning, and other

Key advanced techniques to predict future events or outcomes.

Real-time analysis:

benefits Prescriptive analytics operates in real-time, providing real-time

recommendations and updated suggestions as new data becomes
available.
Dynamic visualisations:
Prescriptive analytics uses interactive, dynamic visualizations to
communicate the insights and recommendations generated from the
data.
Integration with other analytics types:
Prescriptive analytics integrates with other analytics, such as descriptive,
diagnostic, and predictive analytics, to provide a complete picture of the
data and support informed decision-making.
Business Applications of Prescriptive Analytics

Supply Chain Optimization: Prescriptive analytics in supply chain management

helps companies make informed decisions on inventory levels, production
schedules, and transportation routes.

Fraud Detection: By analysing historical data, prescriptive analytics can help

financial institutions identify patterns and anomalies in transactions that may
indicate fraud.

Customer Segmentation: Prescriptive analytics helps companies better

understand their customers by segmenting them based on demographic,
geographic, or behavioural characteristics.
 5. Cognitive Analytics
• Cognitive analytics is an advanced type of
data analytics that utilizes artificial
intelligence (AI) and machine learning (ML)
algorithms to process and analyze vast
amounts of unstructured data.
• Data can come in many forms, such as text,
images, audio, or video.
• Cognitive analytics brings together a
number of intelligent technologies to
accomplish this, including semantics,
artificial intelligence algorithms and a
number of learning techniques such as
deep learning and machine learning
 Advanced Natural Language Processing (NLP): Cognitive
analytics uses NLP to extract insights from large amounts
of unstructured data, such as customer reviews and social
media posts.
Deep Learning Capabilities: Cognitive analytics uses deep
learning algorithms to analyse data and predict future

Key trends and patterns.

Automated Insights: Cognitive analytics automates the

Features insights extraction process, reducing the time and effort
required to analyse large amounts of data.

Predictive Capabilities: Cognitive analytics uses algorithms

to predict future events and outcomes.

Interoperability: Cognitive analytics integrates with other

tools and platforms, allowing organisations to easily
combine insights from multiple sources and get a more
comprehensive view of their data.
Use Cases for Cognitive Analytics

Cognitive analytics is used in a variety of industries and applications, including:

Healthcare: Cognitive analytics can analyse medical images, such as x-rays or MRIs, to help diagnose
diseases or identify potential health risks.

Customer service: Cognitive analytics can analyse customer feedback and sentiment, such as comments
on social media or support tickets, to identify trends and patterns that can help improve customer
experiences.

Retail: Cognitive analytics can analyse customer purchasing patterns, such as the items they buy and
when they buy them, to help retailers optimise their inventory and improve the customer experience.

Market Research: Cognitive analytics can analyse consumer data to gain insights into consumer
behaviour and preferences.
 Descriptive analytics describes what has happened over a
given period.

Diagnostic analytics focuses more on why something

happened.

Predictive analytics moves to what is likely going to happen in

Summary the near term.

Finally, prescriptive analytics suggests a course of action.

Cognitive analytics aims to help organizations extract insights

and make predictions from complex and unstructured data sets
that may be difficult to process using traditional methods.