Information analytics is a term used to describe the collection and analysis of data. The use of powerful computers to identify patterns and trends in a data set is not new, but has been greatly enhanced in the past few years. As a result, the quality of the output is high enough to be used as a tool in the decision making process.
The most common use of information analytics is to study business data with a combination of statistical analysis and data mining techniques. The purpose of this type of analysis is to identify trends that can result in action. It is very common for statisticians to identify trends or patterns in behavior that are interesting. However, in a business setting, the organization needs to be aware of patterns that can be used to generate revenue or decrease losses.
Every company interested in information analytics needs to invest in both staff and technology. Information analytics is typically organized as part of a business intelligence within the information technology department. Staff members working with analytics have typically completed post-secondary education in statistics, advanced mathematics, information technology, or programming. It is not uncommon for all the staff to have master's and doctoral degrees in any of these fields. The level of skill and knowledge required to effectively use these tools, design queries, and analyze the results are quite high.
From a technological perspective, a business intelligence or statistical data management tool is required to perform the types of complex analysis required. In addition to specialized software, there is a substantial investment in hardware or connectivity necessary. In an ideal scenario, business data from the enterprise resource planning (ERP) system is accessible with the analysis tool. A common optional method is to duplicate the relevant data into a separate data warehouse used strictly for reporting and data mining or analysis activity.
Setting up this structure is quite complicated and requires a project team with staff who have expertise in both software implementation, data management, infrastructure, and related tools. If a separate environment is created for data analysis, additional hardware will need to be purchased, supported, and maintained.
The primary purpose of information analytics is to use existing data to gain valuable insights into customer behavior and motivation. From an organizational perspective, it is essential to use this information to help in the decision making process. The correct use of this type of data can help firms decide what types of products to launch, when, and in which markets.