The Value of Data Analytics by Kevin C. Bach, CPA, CVA
Your business is awash in data that, if displayed and mined properly, can help you grow and profit. Make that data work for you. Through data analytics, you can better see trends and patterns to help your business improve performance and identify risks and red flags. In addition, building analytical models can allow you to forecast where your company is going, and help you create a plan to optimize and direct that growth. So, what is data analytics? Data analytics is defined as the science and art of discovering and analyzing patterns, identifying anomalies and extracting other useful information in data. It also encompasses identifying a question or problem and utilizing the data, both financial and non-financial, to determine an answer or solution. Practically speaking, data analytics is turning your run of the mill data collection into a plan for the future of your company. There are four main areas of data analytics: • Descriptive Analytics – What happened? • Diagnostic Analytics – Why did it happen? • Predictive Analytics – What will happen? • Prescriptive Analytics – What should be done?
Descriptive Analytics – What Happened? Descriptive analytics is the utilization of analytics to describe what happened. Generally, descriptive analytics entails the gathering of historical data/transactions
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AZ CPA JAN/FEB 2021
