Home‎ > ‎Database‎ > ‎

Analytical Information

Analytical information is information that can be quantitative or qualitative and is used for decision making specifically decisions and tasks of managers. Analytical information includes all the information an organization can use comprehensively and then applies it so that it can aid managers in their analysis tasks and decision making. Analytical information's uses are many being able to identify and explain problems, uncover opportunities and ventures that the company may want to undertake, forecast growth and equity, or to identify a potential problem that the company can now avoid. Analytical information contains numerous different types of information, including transactional information, information from the market, and information from the industry the business is in. Analytical information is helpful to managers when making important ad hoc decisions such as whether the organization should take on a new venture (like a new building, investment, a new type of product that the organizatin may not be known for) or if the organization needs additional or less personnel in a certain area of the organization.

In an organization there is typically a hierarchal level of activities. Generally, transactional activitites where people perform daily tasks are around the lower level of this hierarchy. These transactional activities can be aided through the use of Online Transaction Processing (OLTP) and Transactional Processing System (TPS). On the higher end of the hierarchy is where analytical information can be and is used. This is where managers take the analytical information to help make important decisions for the organization. Managers here can also use Online Analytical Processing (OLAP) as a tool to create business intelligence and help aid the decision making process.

Examples of Analytical Information
Analytical information can take on many different forms. Examples of analytical information are:
  • Trends (information about where the particular market is heading and if the organzation should follow the trend)
  • Sales (information about if the organization needs to pick up sales in a particular area or if it should cut back on inventory of specific products)
  • Rroduct statistics (information about what products may be selling the best and worst to possibly drop a product)
  • Future growth projections (information about whether or not the company looks like it will grow, usually if it is taking on a new venture)

Examples of Analytical Information Uses
Analytical information is an integral part of decision making. It puts together all the information readily available to an organization so that it can help higher level managers and executives to make important decisions. The raw data is manipulated through analysis so that it is useful for the managers in a specific way. Analytical information can be the first step to becoming one of the many analyzing tools that managers and executives use to make decisions. Some of these analyzing tools that use analytical information are:

  • Cluster Analysis: This type of analysis is typically used in marketing. It takes the information, such as about customers, and analyzes it so that it can divide up and group together the ones that are similar and keeps them as close as possible. Conversely, it keeps the ones that are different as far apart as possible.
  • Market Basket Analysis: This analyzes information from websites and checkouts and manipulates it so that it can be used to figure out customers buying trends and behavior so that it can try and predict what future behavior may be. This can be useful because it may be used to forecast how much inventory the organization may or may not need.
  • Personalization: This can be a little similar to Market Basket Analysis however it mainly deals online and uses the information obtained form a customer online to find out what the customer likes and further offer similar products to possibly cross-sell or up-sell more of the company or organization's products. This can be useful because it obviously creates more revenue for the company or organization if it can sell more products.

External Links
Business Intelligence (Wikipedia)
Cluster Analysis (Wikipedia)
Market Basket Analysis (Wikipedia, contains small portion about Market Basket Analysis)
OLAP (Wikipedia - Online Analytical Processing)
OLTP (Wikipedia - Online Transaction Processing)
Personalization (Wikipedia)
TPS (Wikipedia - Transactional Processing System)

References
Ask Dan
Yahoo Answers
Comments