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A business analyst is someone who reforms the company’s internal procedures, rules and
information systems to analyze, comprehend and support the needs of the company’s growth.
By understanding the business difficulties, suggesting a solution and making constructive revisions,
the business analyst increases the financial return for initiatives. Changing the practices, products,
services and software can help the company achieve its goals.
Business analysis is the process of identifying issues facing an organization and potential solutions. Business solutions are closely related to company demands, such as user, attribute, utility and resource requirements. Many business strategies have been created to address all these
business difficulties.
The role of a business analyst in any organization is very crucial, and this article will discuss some of the top business analytics techniques used by business analysts and how to apply them to the benefit of a firm. There are several of these reliable, approved and tested methodologies available to help solve business analysis problems. The highlighted ones are used more frequently, and it seems sensible to imagine that their prominence is a consequence of their effectiveness.
What are the different types of business analytics (BA)?
Before diving into the different types and techniques involved in business analytics, it is important to know that these terms are very different from one another despite often being used interchangeably.
“Types” of business analytics generally refer to the sub-branches of business analytics. While the “techniques” of business analytics are the various tools and strategies business analysts use to reach their desired business-related goals.
The modern, data-driven online world offers a wide range of new options and tools to both consumers and businesses. With the introduction of new techniques by the leading business analysis methodology over the past several years, business analytics has experienced a massive transition. The prime aim of such strategies is to provide the most remarkable outcome as a business solution.
Business analysts are now an essential part of a company’s survival and performance as a result of this. Business analytics professionals use a variety of structured business analytics approaches to assist firms in defining needs, spotting flaws and filtering through a variety of data and choices to find the best solution.
We have compiled a list of the four major types of business analytics, all of which are very important to understand before moving on to the techniques business analysts use:
Descriptive analytics
The main aim of descriptive analytics is to find the answer to a simple yet complex question: What happened here and why? Customers use this type of analytics, which provides reporting and analysis centered on previous events, by far the most frequently. It helps companies evaluate questions such as: How much did the company sell? What have we produced overall? In the most recent quarter, how many customers departed?
Descriptive analytics is the most straightforward place for a corporation to start because data is typically simple to acquire to generate reports and apps. Descriptive analytics is used to analyze the company’s overall success at a broad level.
Prescriptive analytics
Prescriptive analysis is a method of analyzing data to recommend the best course of action based on identified patterns. Using this technique, algorithms are used to analyze historical data and identify relationships between variables. This information is then used to provide suggestions for the best outcome.
Prescriptive analytics can also be used in healthcare, marketing and finance. A healthcare provider could use prescriptive analytics to recommend the best treatment plan for a patient based on their medical history and other data, while a marketing team could use it to suggest the best channels to reach their target audience based on past performance data.
A common example of the use of this technique in business analysis is a manufacturing company that uses prescriptive analysis to improve its production process. By analyzing data on factors such as machine downtime, employee productivity and supply chain delays, the causes of production problems can be identified and a suggestion for the best course of action can be made, such as reallocating resources or changing production schedules.
Predictive analytics
The branch of business analytics known as predictive analytics uses machine learning to predict future outcomes based on previous data. Predictive analytics models are constructed using historical data, which forms the bulk of diagnostic and descriptive analytics. Businesses may utilize predictive analytics to handle use cases such as predicting machine maintenance problems and component failure, calculating credit risk and spotting possible fraud by recognizing indications of client unhappiness. It can also be used to attempt to forecast and prevent customer attrition.
Diagnostic analytics
Similar to descriptive analytics, to answer a question, diagnostic analytics examines data from the past in detail. However, diagnostic analytics focuses less on what happened and more on why an event or anomaly occurred in the data or a business. Diagnostic analytics is the stage that is the most overlooked and undervalued in the analytics maturity paradigm.
Anecdotally, it is common for most clients to skip over the “why did it happen” phase in favor of moving directly from “what happened” to “what will happen”. Companies may use this kind of analytics to find the answers to issues such as: Why did revenues at our firm decline the prior quarter? Why is there a rise in customer attrition? Why are sales of a certain product group far exceeding those of the previous year?
Compared to machine learning/predictive analytics, diagnostic analytics seems to be more approachable and suitable for a larger range of uses. You may also discover that it resolves certain issues with companies that you had identified as predictive analytics application scenarios.
Top 7 business analytics techniques
- Brainstorming
This technique is a universal skill and among the most appreciated methods in the field of business analytics. It is based on the collaborative efforts of an entire team that comes together and puts their brains to work. As a result, they are able to come up with unique concepts, ideas and innovative solutions to various problems. Additionally, brainstorming also helps in improving understanding among team members and promotes teamwork. Brainstorming is a foundational step necessary for other BA techniques, such as PESTLE analysis and SWOT analysis.
- Business process modeling (BPM)
The main goal of business process modeling is to achieve business improvement. It is a lengthy process, but it is widely used as a business analysis tool to understand or assess the gaps between the current state and the ideal future state of business processes.
BPM illustrations frequently show procedures, possibilities and data as a sequenced workflow. Two directions are used for business process modeling illustrations and diagrams, including Unified Modelling Language Activity Diagram (UML) and Business Process Modeling Notation (BPMN). When using the BPM method, business analytics professionals are responsible for performing several tasks, including strategic planning, business model analysis, defining and designing the process and technical analysis of complex business solutions.
The BPM methodology is a straightforward way to logically illustrate how different roles will interact with a business process. It is recognized as the best business analysis technique in the area, notably in the IT industry. Consequently, a business analyst can manage challenging situations more efficiently, and the sequential phases of the execution process are easy for people to visualize.
- SWOT analysis
SWOT is an acronym for strengths, weaknesses, opportunities and threats. SWOT analysis is the most important and widely used technique in business analytics. A number of individuals inside the organization that have different opinions and views carry it out to identify a condition and situation and to adapt accordingly.
SWOT analysis resembles the business or organization structure in certain ways as weaknesses and strengths are internal data elements while threats and opportunities are external data elements. This information will assist analysts in providing suggestions for organizational reform and improving resource allocation. SWOT analysis is a simple, flexible technique that can be employed to rapidly or thoroughly analyze any kind of company. Evaluation of other concerns, such as teams, roles or individuals, is also aided by it.
- MOST analysis
MOST is an acronym for mission, objective, strategy and tactics. The MOST analysis is among the most appreciated and praised business analytics techniques. Business analytics experts evaluate what a firm has done in the past and what an organization plans to do in the future to accomplish its objective, as well as what a company should do to achieve strategic alignment by using the MOST analysis approach. MOST analysis is a simple method for understanding an organization’s capabilities and objectives.
The MOST analysis is a technique that is used in an organization at various levels from top to bottom due to its diverse ability to solve business-related problems. This technique ensures that an organization never goes off track and does not forget its original goal.
- PESTLE analysis
PESTLE is an acronym for political, economical, social, technological, legal and environmental. The PESTLE model is a tool used by business analysts to pinpoint factors related to the environment that may have a profound effect on the organization and decide how to appropriately handle and manage them.
Political factors include the impact of government rules and regulations on a company, such as tariffs, tax laws, export and import regulations and other related regulations.
Economic factors have a strong effect on how different organizations run their companies and how much profit they are able to earn through these businesses. These factors include growth in the economy, fluctuations in the exchange rate and inflation.
Social factors assist and make businesses aware of fulfilling and understanding the needs of the clients, such as cultural trends and health.
Technological factors are the factors that highly influence business growth, including the rapid increase in technology, automation, growth, research and innovation.
Legal factors define that businesses must follow the rules and regulations and operate accordingly by keeping track of insurance laws, health laws, data privacy laws, copyright laws and discrimination laws.
Environmental factors have a strong influence on organizations, especially those that deal in agriculture and tourism-related businesses. These factors include pollution, global warming, weather and climate change, among others.
- Use case modelling
Use case modeling (UML) is a technique for illustrating how required tasks should be performed to conduct operations within a particular system. This method is typically employed in projects for software development during the planning and design phase to summarize company needs into required functionality inside a project that is currently in progress. Many applications, notably Microsoft Visio and IBM’s Rational Rose, may be used to produce UML diagrams.
- Mind mapping
By providing us with a clear and visual grasp of many issues, concepts and thoughts, mind mapping proves to be among the most practical and successful business analysis approaches.
One of the main reasons that it is called mind mapping is that its structure is remarkably similar to that of neurons in the brain. Mind mapping also constantly grows as new thoughts and resources are added.
It is the responsibility of a business analyst to examine and assess client or stakeholder-provided issues that may be resolved by utilizing mind maps to organize any ideas, thoughts or data.
By using the mind mapping approach, you may determine if all the aspects that need to be analyzed have been taken into account. Freemind, Lucidchart, Mindmap and Canva are just a few of the internet applications that are available to create mind maps.
How to determine which approach best suits your needs?
There are three things that a business analyst needs in order to decide which approach is the best one to take in any given situation. The first and most important thing that helps in quick and accurate decision-making is being equipped with the right education.
A Bachelor’s degree in any business-related field, such as business administration, business management or information technology, is the bare minimum needed for a business analyst. An advanced degree, such as a Master’s or a Ph.D. level degree, can lead to improved work prospects and higher income, as it does with many occupations.
A great opportunity for individuals who are already employed and working after earning a Bachelor’s degree is an online Master’s in Business Analytics, such as the one offered by St. Bonaventure University Online. An online degree allows business students who are already busy in their professional lives to pursue their education and advance further in their career.
The other two things that a business analyst needs in order to make the right decisions when they are confronted with an issue at work are to have the proper of skills and experience. Skills are primarily learned through high-quality education. However, an individual may also put in additional effort to gain certain skills deliberately through additional courses, training and working under competent business analysts.
Some of the most common skills required to succeed as a business analyst include effective communication, the ability to solve problems and critical thinking. Each of these is explained in more detail below:
Effective communication: Communication skills are a prerequisite for business analysts if they wish to excel in their careers. Business analysts are required to be able to lead productive meetings, ask insightful questions, pay attention to the responses and assimilate what is being discussed.
Rapid problem solving: Every project has issues. In fact, there is a good probability that the entire business project you are dealing with will provide the answer to a particular issue. BAs should be able to provide a clear description of the issue, potential solutions and the project’s scope at the highest level.
Critical thinking: Before assisting a team in choosing a solution, business analysts are charged with assessing several choices. Business analysts must pay attention to stakeholder demands when identifying the issue that needs to be handled, but they must also critically evaluate those requirements and ask probing questions until the true need is exposed and understood. Critical thinking and assessment abilities are crucial for novice business analysts because of this.
Final thoughts
In conclusion, there are many tools available to business analysts when assessing various business situations. Some of the most effective tools include brainstorming, business process modeling, SWOT analysis, MOST analysis, PESTLE analysis, use case modeling and mind mapping. By choosing the right tool for any given situation, business analysts can increase the level of business success that can be achieved.
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