What is the level of intelligence through Analaytics?
I think we have learnt before in lecture, just curious . Anyone knows ?
The first four levels are common practice in almost all organisations as the foundation of standard business operations. They are known as part of Business Intelligence. That is, the presentation and reporting of historical data. Furthermore, a secondary attribute of Business Intelligence system is that the user knows what they are looking and/or the basic analysis required to produce it.
The subsequent four levels construe Business Analytics, the uncovering of insights from historical data and the projections into future, using analytical processes in alignment to business requirements.
Standard Reports is the first level of the analytical ladder focuses on understanding what had happened. For example, imagine reviewing a company’s annual report and pinpointing the various events that had occurred: “What was sold?”, “What was bought?”, “What was the volume of fraudulent cases detected?” etc.
When we had understood and captured the events what had happened, secondary questions such as “When did it happen?”, “How many times did it occur during a particular period of time?” may surface. Hence, Ad Hoc Reports are generated to answer these questions.
Query Drilldowns level allow diving deeper into the event, answering questions such as “Why did the event happen?”, “Where exactly was the problem?”.
The concluding stage of the first four levels is alerts. Given the previous three levels, we are keen to act/re-act on the uncovered information by triggering various business specific alerts. What are the actions needed when threshold is breached?
In Statistical Analysis level we aim to go beyond the realm of ‘what’ and ‘where’, to dive into the hidden gems of the data to understand why, the event had happened. Such knowledge is the foundation of understanding how to identify, prevent, exploit, and so forth.
Until this stage we had focused entirely on deriving insight from historical data, one of the key elements of analytics is the capability of statistical forecasting. Will this observed trend continue and for how long? Furthermore
, this stage is analogous to driving a car – one needs to have a front windscreen in order to know what is likely to happen.
Predictive modelling focuses on uncovering the unknown from the data at hand to surface new insights that may not have been previously known, also to provide the foundation for predicting future events, “What will happen next?” and “Why will it happen?”, such as the likelihood of events occurring.
The cherry on top of the pie, optimisation or also referred to as Operation Research (OR), combines all the previous levels to optimise business processes/objectives given operational and other constraints. How to maximise profit, minimise cost? How to optimally allocate resources?
There are eight levels of analytics, according to Davis. The first four encompass what he considers “the classic definition of business intelligence” and what the majority of organizations are actually doing.
What the first four levels all have in common is that they look at past activity, Davis pointed out. “They support reactive decision-making … understanding the facts after things occurred and now reacting,”.
The last four levels, which support pro-active decision-making, keep innovation and optimization on track. These are predictive in nature and keep things “headed in the right direction,”
Hey @AlvinYap I find this topic intriguing. Could you please provide me with some material where I can read about the same?