Beginner’s Guide To 4 Types Of Analytics


The optimum utilization of data with analytics is helping organizations scale their business to the next level. With data being the new currency, more and more companies are becoming data-driven. Data analytics help organizations understand their consumers, enhance their advertising campaigns, personalize their content, and improve their products to meet the desired goal. While raw data have immense potential, you cannot leverage data’s advantages without the proper data analytics tools and types of analytics processes. As a Business or Data Analyst, to grow a business and achieve its goals, you need data analytics to maximize the efforts.

In this article, we’re going to break-down the types of analytics for you. Before going into the details of the different types of analytics, let us understand what data analytics is.

What Is Data Analytics?

Data Analytics refers to the process of analyzing datasets to draw out the insights they contain. Data Analytics empowers Business Analysts to take raw data and reveal patterns to extract significant knowledge. Business Analysts use Data Analytics techniques in their work to make smart business decisions. The use of Data Analytics in Business Analysis can help organizations understand their consumers’ patterns and need better. Ultimately, organizations can use various types of data analytics to boost business performance and improve their products. 

There are mainly 4 broad categories of analytics. These different types of analytics used by Business Analysts empower them with0 insights that can help them improve business performance. Let’s take a detailed look at the four types of analytics.

  1. Descriptive Analytics
  2. Diagnostic Analytics
  3. Predictive Analytics
  4. Prescriptive Analytics

1. Descriptive Analytics

It is the most straightforward one in the top categories of analytics. Descriptive analytics shuffles raw data from various data sources to give meaningful insights into the past, i.e., it helps you understand the impact of past actions. However, these discoveries can only signal whether something is right or not, without any clarification. Therefore, Business Analysts don’t prescribe exceptionally data-driven organizations to agree to descriptive analytics only; they’d preferably combine it with other types of analytics.

It is a significant step to make raw data justifiable to stockholders, investors, and leaders. This way, it becomes simple to recognize and address shortcomings that require attention. The two fundamental procedures included in descriptive analytics are data aggregation and data mining. It is to be noted that this technique is beneficial to understand the underlying behavior and not make any estimations.

2. Diagnostic Analytics

Diagnostic Analytics is one of the 4 broad categories of analytics utilized to decide why something occurred in the past. It is characterized by techniques like drill-down, data discovery, data mining, and correlations. Diagnostic Analytics investigates data to comprehend the main drivers of the events. It is useful in figuring out what elements and events led to a specific outcome. It generally utilizes probabilities, likelihoods, and the distribution of results for the analysis.

It gives comprehensive insights into a particular problem. Simultaneously, an organization must have detailed data available to them.

3. Predictive Analytics

Predictive analytics is one of the four types of data analytics used by Business Analysts that determines what will probably occur. It utilizes the discoveries of descriptive and diagnostic analytics to distinguish groups and exceptional cases and anticipate future patterns, making it an essential tool for forecasting.

One of the primary applications of predictive analytics is sentiment analysis. All the opinions posted via online media are gathered and analyzed (existing text data) to forecast the individual’s opinion on a specific subject as positive, negative, or neutral (future prediction). Hence, predictive analytics comprises designing and validating models that render precise predictions.

4. Prescriptive Analytics

The basis of these types of data analytics used in Business Analytics is predictive analytics. Still, it goes past the other three categories of analytics mentioned above to recommend future solutions. It can recommend all favorable outcomes as per a predefined game-plan and propose a different course of action to get to a specific result. Therefore, it utilizes a robust feedback system that continually learns and updates the connection between the actions and the outcome.

Prescriptive analytics utilizes emerging technologies and tools, such as Machine Learning, Deep Learning, and Artificial Intelligence algorithms, making it modern to execute and oversee. Furthermore, this cutting edge data analytics type requires internal as well as external past data to provide users with favorable outcomes. That is why before Business Analysts suggest considering the needed efforts against a demanded added value before implementing prescriptive analytics to any business system.


Descriptive Analytics, Diagnostic Analytics, Predictive Analytics, and Prescriptive Analytics are the 4 types of analytics used by Business Analysts to unlock raw data’s potential in order to improve business performance. If you’re someone who loves to play with data and wants to build a successful career in Business Analytics, check our Integrated Program In Business Analytics (IPBA) in collaboration with IIM Indore. It is a 10-month-long Future Leaders Program, aimed at senior executives and mid-career professionals to help them give their career a significant boost. 

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