Levels of Analysis

Depending on the company’s culture and level of analytics sophistication, certain approaches may not be convincing. Doug Laney, part of the data strategies research team at Gartner, identifies several levels of the “analytics continuum.”

  • Descriptive analytics - answers the questions of “what happened.”
    • It is hindsight oriented analytics, represented by typical bar charts and pie charts.

  • Diagnostic analytics - answers questions about “why things are happening.”
    • This approach includes looking for root causes and doing root cause kinds of analyses.

  • Predictive analytics - answers the question of what “what is going to happen?”
    • This approach involves forecasting the future.

  • Prescriptive analytics - This approach involves the system actually giving recommendations.

Diagnostic, predictive, and prescriptive analytics are sometimes referred to as advanced analytics. These may include techniques such as linear regression analysis, machine learning, and heuristic processing.

Doug Laney’s point is that it may be difficult to get organizational buy-in to take action based on the conclusions of advanced analytics techniques that are not understood, at least at a high level, by the appropriate business decision makers. This is especially the case if conclusions reached by the advanced analytics techniques are not in line with those decision makers’ intuitions.