How to Build on Business Intelligence with Advanced Analytics

Advanced analytics software can be used to increase business intelligence, leverage investments and identify strategies for profitability. The use of advanced analytics software can be especially valuable in these times of economic downturn when advanced analytics' predictive capabilities can help businesses to foresee risks and determine best products, customers and cross-marketing opportunities, or avoid missing opportunities. Knowledge Center contributor Steve Palmer explains how you can build on your company's business intelligence by using advanced analytics software.

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Advanced analytics software provides insights to business intelligence, the "Wow, I did not see that before" factor. It identifies that "something more" and shows you how to capitalize on it. But what is advanced analytics?

Advanced analytics includes data mining and statistical software. It uses technologies such as neural networks, rule induction and clustering, among others, to discover relationships in data and to make predictions that are hidden, not apparent or too complex to be extracted using query, reporting and multidimensional analysis software.

In other words, advanced analytics is about applying techniques for analyzing data to identify an opportunity, solve a problem or "predict" a future outcome. These high-end analytical techniques let you tap into rich data sources to spot trends about customers, products, markets or suppliers, and to manage risk or formulate strategic initiatives in order to forecast and model outcomes. These predictive insights can, in turn, mean tangible profit-maximizing and cost-saving decisions.

Identify strategies for profitability

What this means for businesses is that advanced analytics lets you leverage your investment in people, contracts, equipment and facilities, and identify strategies that ensure profitability by looking for intelligence, not just knowledge. It means exploring the how, why and when, not just the what of collected data. It means committing to intelligent modeling that generates new insights rather than using data to justify an existing assumption.

Advanced analytics can be used to address complex planning problems and solve difficult business challenges-many of which would otherwise be considered impossible using spreadsheets and similar solutions. Advanced analytics does this thanks to linear programming and other sophisticated heuristics, which bring true intelligence into the equation.