Competing on Analytics

Business analytics refers to the skills, technologies, applications and practisies for continuous iterative exploration and investigation of past business performance to gain insight and drive business planning. Business analytics focuses on developing new insights and understanding of business performance based on data and statistical methods. Business intelligence traditionally focuses on using a consistent set of metrics to both measure past performance and guide business planning, which is also based on data and statistical methods. Analytics makes extensive use of data, statistical or quantitative analyses, explanatory and predictive modeling, and fact based management to drive decision, making. Analytics may be used as input for human decisions or may drive fully automated decisions. In other words, querying, reporting, OLAP, and alert tools can answer questions such as what happened, how many, how often, where the problem is, and what actions are needed. Business analytics can answer questions like why is this happening, what if these trends continue, what will happen next, what is the best that can happen (optimize). Example of application analytics in different areas: banks use data analyses to differentiate among customers based on credit risk, usage of other characteristics with appropriate product offering. Harrah's company (from 2010 renamed and called Caesers entertaiment. Gaming corporation that owns and operate over 50 casinos, hotels, and seven golf courses under several brands), uses analytics for customer loyalty programs. Deere & Company (manufacturer of agricultural machinery like tractors, combine harvesters, sprayers and other) saved more than $1 billion by employing and implementing a new analytical tool to better optimize inventory. We can mention areas where within analytics are basic domain model: sales/retail business, financial services, risk & credit, marketing, fraud, pricing, telecommunications, supply chain, transportation and many others