Analytics

Analytics is the systematic computational analysis of data or statistics.[1] It is used for the discovery,
interpretation, and communication of meaningful patterns in data. It also entails applying data patterns
toward effective decision-making. It can be valuable in areas rich with recorded information; analytics relies
on the simultaneous application of statistics, computer programming, and operations research to quantify
performance.

Organizations may apply analytics to business data to describe, predict, and improve business performance.
Specifically, areas within analytics include descriptive analytics, diagnostic analytics, predictive analytics,
prescriptive analytics, and cognitive analytics.[2] Analytics may apply to a variety of fields such as
marketing, management, finance, online systems, information security, and software services. Since
analytics can require extensive computation (see big data), the algorithms and software used for analytics
harness the most current methods in computer science, statistics, and mathematics.[3] According to
International Data Corporation, global spending on big data and business analytics (BDA) solutions is
estimated to reach $215.7 billion in 2021.[4][5] As per Gartner, the overall analytic platforms software
market grew by $25.5 billion in 2020.[6]

Analytics vs analysis
Data analysis focuses on the process of examining past data through business understanding, data
understanding, data preparation, modeling and evaluation, and deployment.[7] It is a subset of data
analytics, which takes multiple data analysis processes to focus on why an event happened and what may
happen in the future based on the previous data.[8] Data analytics is used to formulate larger organizational
decisions.

Data analytics is a multidisciplinary field. There is extensive use of computer skills, mathematics, statistics,
the use of descriptive techniques and predictive models to gain valuable knowledge from data through
analytics.[9] There is increasing use of the term advanced analytics, typically used to describe the technical
aspects of analytics, especially in the emerging fields such as the use of machine learning techniques like
neural networks, decision trees, logistic regression, linear to multiple regression analysis, and classification
to do predictive modeling.[10][7] It also includes unsupervised machine learning techniques like cluster
analysis, Principal Component Analysis, segmentation profile analysis and association analysis.[11]

Applications

Marketing optimization

Marketing organizations use analytics to determine the outcomes of campaigns or efforts, and to guide
decisions for investment and consumer targeting. Demographic studies, customer segmentation, conjoint
analysis and other techniques allow marketers to use large amounts of consumer purchase, survey and
panel data to understand and communicate marketing strategy.[12]

Marketing analytics consists of both qualitative and quantitative, structured and unstructured data used to
drive strategic decisions about brand and revenue outcomes. The process involves predictive modelling,
marketing experimentation, automation and real-time sales communications. The data enables companies to
make predictions and alter strategic execution to maximize performance results.[12]

Web analytics allows marketers to collect session-level information about interactions on a website using an
operation called sessionization. Google Analytics is an example of a popular free analytics tool that
marketers use for this purpose.[13] Those interactions provide web analytics information systems with the
information necessary to track the referrer, search keywords, identify the IP address,[14] and track the
activities of the visitor. With this information, a marketer can improve marketing campaigns, website
creative content, and information architecture.[15]

Analysis techniques frequently used in marketing include marketing mix modeling, pricing and promotion
analyses, sales force optimization and customer analytics e.g.: segmentation. Web analytics and
optimization of websites and online campaigns now frequently work hand in hand with the more traditional
marketing analysis techniques. A focus on digital media has slightly changed the vocabulary so that
marketing mix modeling is commonly referred to as attribution modeling in the digital or marketing mix
modeling context.

These tools and techniques support both strategic marketing decisions (such as how much overall to spend
on marketing, how to allocate budgets across a portfolio of brands and the marketing mix) and more tactical
campaign support, in terms of targeting the best potential customer with the optimal message in the most
cost-effective medium at the ideal time.

People analytics

People analytics uses behavioral data to understand how people work and change how companies are
managed.[16]

People analytics is also known as workforce analytics, HR analytics, talent analytics, people insights, talent
insights, colleague insights, human capital analytics, and HRIS analytics. HR analytics is the application of
analytics to help companies manage human resources.[17] Additionally, HR analytics has become a
strategic tool in analyzing and forecasting Human related trends in the changing labor markets, using
Career Analytics tools.[18] The aim is to discern which employees to hire, which to reward or promote,
what responsibilities to assign, and similar human resource problems.[19] For example, inspection of the
strategic phenomenon of employee turnover utilizing People Analytics Tools may serve as an important
analysis at times of disruption. [20] It has been suggested that People Analytics is a separate discipline to
HR analytics, representing a greater focus on business issues rather than administrative processes,[21] and
that People Analytics may not really belong within Human Resources in organizations.[22] However,
experts disagree on this, with many arguing that Human Resources will need to develop People Analytics
as a key part of a more capable and strategic business function in the changing world of work brought on
by automation.[23] Instead of moving People Analytics outside HR, some experts argue that it belongs in
HR, albeit enabled by a new breed of HR professional who is more data-driven and business savvy.[24]

Portfolio analytics

A common application of business analytics is portfolio analysis. In this, a bank or lending agency has a
collection of accounts of varying value and risk. The accounts may differ by the social status (wealthy,
middle-class, poor, etc.) of the holder, the geographical location, its net value, and many other factors. The
lender must balance the return on the loan with the risk of default for each loan. The question is then how
to evaluate the portfolio as a whole.[25]
The least risk loan may be to the very wealthy, but there are a very limited number of wealthy people. On
the other hand, there are many poor that can be lent to, but at greater risk. Some balance must be struck that
maximizes return and minimizes risk. The analytics solution may combine time series analysis with many
other issues in order to make decisions on when to lend money to these different borrower segments, or
decisions on the interest rate charged to members of a portfolio segment to cover any losses among
members in that segment.

Risk analytics

Predictive models in the banking industry are developed to bring certainty across the risk scores for
individual customers. Credit scores are built to predict an individual's delinquency behavior and are widely
used to evaluate the credit worthiness of each applicant.[26] Furthermore, risk analyses are carried out in the
scientific world[27] and the insurance industry.[28] It is also extensively used in financial institutions like
online payment gateway companies to analyse if a transaction was genuine or fraud.[29] For this purpose,
they use the transaction history of the customer. This is more commonly used in Credit Card purchases,
when there is a sudden spike in the customer transaction volume the customer gets a call of confirmation if
the transaction was initiated by him/her. This helps in reducing loss due to such circumstances.[30]

Digital analytics

Digital analytics is a set of business and technical activities that define, create, collect, verify or transform
digital data into reporting, research, analyses, recommendations, optimizations, predictions, and
automation.[31] This also includes the SEO (search engine optimization) where the keyword search is
tracked and that data is used for marketing purposes.[32] Even banner ads and clicks come under digital
analytics.[33] A growing number of brands and marketing firms rely on digital analytics for their digital
marketing assignments, where MROI (Marketing Return on Investment) is an important key performance
indicator (KPI).

Security analytics

Security analytics refers to information technology (IT) to gather security events to understand and analyze
events that pose the greatest risk.[34][35] Products in this area include security information and event
management and user behavior analytics.

Software analytics

Software analytics is the process of collecting information about the way a piece of software is used and
produced.[36]

Challenges
In the industry of commercial analytics software, an emphasis has emerged on solving the challenges of
analyzing massive, complex data sets, often when such data is in a constant state of change. Such data sets
are commonly referred to as big data.[37] Whereas once the problems posed by big data were only found in
the scientific community, today big data is a problem for many businesses that operate transactional systems
online and, as a result, amass large volumes of data quickly.[38][37]
The analysis of unstructured data types is another challenge getting attention in the industry. Unstructured
data differs from structured data in that its format varies widely and cannot be stored in traditional relational
databases without significant effort at data transformation.[39] Sources of unstructured data, such as email,
the contents of word processor documents, PDFs, geospatial data, etc., are rapidly becoming a relevant
source of business intelligence for businesses, governments and universities.[40][41] For example, in Britain
the discovery that one company was illegally selling fraudulent doctor's notes in order to assist people in
defrauding employers and insurance companies[42] is an opportunity for insurance firms to increase the
vigilance of their unstructured data analysis.[43]

These challenges are the current inspiration for much of the innovation in modern analytics information
systems, giving birth to relatively new machine analysis concepts such as complex event processing,[44] full
text search and analysis, and even new ideas in presentation. One such innovation is the introduction of
grid-like architecture in machine analysis, allowing increases in the speed of massively parallel processing
by distributing the workload to many computers all with equal access to the complete data set.[45]

Analytics is increasingly used in education, particularly at the district and government office levels.
However, the complexity of student performance measures presents challenges when educators try to
understand and use analytics to discern patterns in student performance, predict graduation likelihood,
improve chances of student success, etc.[46] For example, in a study involving districts known for strong
data use, 48% of teachers had difficulty posing questions prompted by data, 36% did not comprehend given
data, and 52% incorrectly interpreted data.[47] To combat this, some analytics tools for educators adhere to
an over-the-counter data format (embedding labels, supplemental documentation, and a help system, and
making key package/display and content decisions) to improve educators' understanding and use of the
analytics being displayed.[48]

Risks

Risks for the general population include discrimination on the basis of characteristics such as gender, skin
colour, ethnic origin or political opinions, through mechanisms such as price discrimination or statistical
discrimination.[49]

See also
Analysis Learning analytics
Analytic applications List of software engineering topics
Architectural analytics Mobile Location Analytics
Behavioral analytics News analytics
Business analytics Online analytical processing
Business intelligence Online video analytics
Cloud analytics Operational reporting
Complex event processing Operations research
Continuous analytics Prediction
Cultural analytics Predictive analytics
Customer analytics Predictive engineering analytics
Dashboard (business) Prescriptive analytics
Data mining Semantic analytics
Data presentation architecture Smart grid
Embedded analytics Social analytics
 Software analytics Visual analytics
Speech analytics Web analytics
Statistics Win–loss analytics
User behavior analytics

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External links
The dictionary definition of analytics at Wiktionary

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