The Different Levels of Analytics

The Different Levels of Analytics

There are many different views on the varying levels of analytics. We’ve found the best way to break this down is by the type of insights you receive in the end. Each level increases in complexity and value. Don’t read these as interchangeable options but rather as a progression from basic to advanced. As you read through these levels think about where your organization stands and where you might want to eventually be.

Descriptive Analytics – “How are we doing?”

Descriptive analytics is taking a look into the past. It’s a way of reporting what happened. For example, if you sell candy bars, descriptive analytics would tell you how many candy bars you sold in the past 12 months or the average number of candy bars sold each month over the past 24 months.

Predictive Analytics – “If trends continue, this will happen…”

Predictive analytics takes what you’ve learned from descriptive analytics and uses it to predict future outcomes. For example, if you sold 1,000 candy bars in December and sales has increased consistently by 3% each month over the past 12 months, you would prepare for selling 1,030 candy bars in January. This type of information helps you effectively plan for the future.

Prescriptive Analytics – “What should we be doing?”

Prescriptive analytics is about identifying what you can say or do to change future outcomes or obtain the optimal outcome. Prescriptive analytics goes beyond just reporting what happened or what will happen if trends continue; it looks at what changes you can make today to influence future outcomes.

What level of analytics is your organization using?

We have conversations with businesses that are unhappy with their analytics. They are struggling to find any value or insights. Most of the time businesses are looking for the value and insights found in future-facing analytics like predictive or prescriptive but they’re only using descriptive tools. What level do your organization’s tools fall under?

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