Types of big data analytics
There are four types of analytics.
- Descriptive analytics
It summarizes the past data into a form that people can easily read and understand. It helps companies create reports regarding revenue, sales and profits, among others. Furthermore, it can be used to tabulate social media metrics. Organizations can use this type of analytics to identify underutilized space and help save money.
- Diagnostic analytics
This analytics is done to understand what caused a given problem. Some examples include techniques like data mining, data recovery and drill-down. Companies use this type of analytics because it gives them in-depth insight into a given problem. For example, eCommerce companies can use it to find out why sales have plunged even as customers are adding products to their carts.
- Predictive analytics
It is analytics that uses historical and present data to predict the future; it uses data mining, AI and machine learning to analyze current data and make predictions. It predicts customer trends, market trends, and other useful trends for businesses. PayPal, for example, uses predictive analytics to determine the kind of precautions that they should take to protect their clients against fraudulent transactions.
- Prescriptive analytics
This analytics is used to prescribe the solution to certain problems. It works with predictive and descriptive analytics and substantially relies on AI and machine learning. A use case of this type of analytics is by an airline to maximize profit. It is used to build an algorithm that will automatically adjust the flight fares based on weather, demand, holiday, destination, and oil prices.
Benefits and advantages of big data analytics
- Risk management
Big data analytics is useful in managing risks. For instance, in the banking sector, it is used to identify fraudulent activities and discrepancies. Organizations use it to identify suspects of fraud and the root cause of problems that the banks experience.
- Innovations and product development
Big data analytics is the most useful technology when it comes to the enhancement of innovation. For instance, companies like Rolls-Royce use it to analyze the efficiency of jet engine designs for different airlines and armed forces across the world. It is also used to assess the need for improvement in those engines.
- Making quick and better decisions
Large companies use big data analytics to make strategic decisions to help the organization perform its work properly and compete efficiently. For example, companies like Starbucks use it to decide a location that would be suitable for a news outlet. With this technology, they can analyze different factors like population, demographics, accessibility of the new location and more and come up with a report of whether the location is suitable.
- Improvement of customer experience
Customer experience is important for any organization. As such, big data analytics is used to improve customer experiences by monitoring the activity of different individuals on platforms such as Twitter and Facebook regarding their products or services and addressing their concerns. By appropriately addressing these issues and giving out solutions, the company will build good customer relations.