Descriptive Analytics

What Is Descriptive Analytics?

Descriptive analytics is the translation of historical data to better comprehend changes that have happened in a business. Descriptive analytics depicts the utilization of a scope of historic data to draw examinations. Most commonly reported financial metrics are a product of descriptive analytics, for instance, year-over-year pricing changes, month-over-month sales growth, the number of users, or the total revenue per subscriber. These measures all depict what has happened in a business during a set period.

Understanding Descriptive Analytics

Descriptive analytics takes raw data and parses that data to draw ends that are valuable and reasonable by managers, investors, and other stakeholders. A report showing sales of $1 million might sound noteworthy, however it needs setting. In the event that that figure addresses a 20% month-over-month decline, it is a concern. In the event that it is a 40% year-over-year increase, it proposes something is going right with the sales strategy. Be that as it may, the bigger setting including targeted growth is required to acquire an informed perspective on the company's sales performance.

Descriptive analytics utilizes a full scope of data to give an accurate image of what has occurred in a business and how that contrasts from other comparable periods. These performance metrics can be utilized to flag areas of strength and weakness to inform management strategies.

The two principal methods where data is collected for descriptive analytics are data aggregation and data mining. Before data can be figured out it must initially be assembled and afterward parsed into reasonable information. This information can then be meaningfully utilized by management to appreciate where the business stands.

Descriptive analytics is an important part of performance analysis with the goal that managers can settle on informed strategic business choices based on historical data.

Descriptive analytics is one of the most essential bits of business intelligence a company will utilize. Albeit descriptive analytics can be industry-explicit, for example, the seasonal variation in shipment completion times, analytics utilize comprehensively accepted measures common all through the financial industry.

Return on invested capital (ROIC) is a descriptive logical made by taking three data points — net gain, dividends, and total capital — and transforming those data points into a straightforward percentage that can be utilized to compare one company's performance to other people.

Generally talking, the bigger and more complex a company is, the more descriptive analytics it will use to measure its performance.

Special Considerations

Descriptive analytics gives important information in a simple to-get a handle on format. There will continuously be a requirement for descriptive analytics. Notwithstanding, more exertion is going towards fresher fields of analytics, for example, predictive and prescriptive analytics.

These types of analytics utilize descriptive analytics and coordinate extra data from assorted sources to model likely results in the close to term. These forward-looking analytics go past giving information to aiding navigation. These types of analytics can likewise recommend strategies that can amplify positive results and limit negative ones.

Fast Fact

Descriptive analytics gives the "What occurred?" information with respect to a company's operations, whole demonstrative analytics gives the "For what reason did it work out?" information, and predictive analytics gives information concerning "What could occur from now on?"

All things considered, society isn't exactly yet at the point where kindhearted and farsighted PCs will rudder every major enterprise. The majority of choices in offices and meeting rooms worldwide are made by individuals utilizing similar types of descriptive analytics utilized 10, 20, and 30 years prior, for example, whether sales were up or down compared to last month, is the product getting to showcase on time, and does the company have adequate supply based on last month's numbers?

Features

• Instances of metrics utilized in descriptive analytics incorporate year-over-year pricing changes, month-over-month sales growth, the number of users, or the total revenue per subscriber.
• In its least difficult form, descriptive analytics addresses the inquiry, "What occurred?"
• Utilizing a scope of historic data and benchmarking, leaders get an all encompassing perspective on performance and trends on which to base business strategy.
• Descriptive analytics can assist with recognizing the areas of strength and weakness in an organization.
• Descriptive analytics is presently being utilized related to fresher analytics, for example, predictive and prescriptive analytics.
• Descriptive analytics is the most common way of parsing historical data to better comprehend the changes that have happened in a business.