Business Knowledge

Business Analytics: Core Concepts

The 4 Levels of Data-Driven Insight

Climb the ladder of analytics maturity to make smarter business decisions.

Level 1: Descriptive Analytics

  • Question: What happened?
  • What it is: Basic reporting and dashboards that summarize the past.
  • Example: A chart showing last month’s sales figures.

Level 2: Diagnostic Analytics

  • Question: Why did it happen?
  • What it is: Drilling down into the data to find the root cause of an event.
  • Example: Discovering that last month’s sales dip was caused by a new competitor’s ad campaign.

Level 3: Predictive Analytics

  • Question: What will happen next?
  • What it is: Using statistical models to forecast future outcomes.
  • Example: Predicting which customers are most likely to stop buying from you.

Level 4: Prescriptive Analytics

  • Question: What should we do about it?
  • What it is: Recommending the best course of action to achieve a goal.
  • Example: Automatically sending a personalized discount to a customer who is about to churn.

Start with Level 1 and work your way up to build a truly data-driven organization.