Today, advancements in technology make numerous types of data — from sales figures to customer responses to supply chain performance metrics — available to companies as the data is being generated. Model analytics allows organizations to turn that data into insights that answer important questions and inform key decisions.  

As more organizations rely on data to make decisions and design strategies, demand is growing for professionals skilled in applying these models. By understanding the main types of analytics and how they’re used, aspiring analysts can better gauge if pursuing a business analytics degree and career are worth it for them.  

What Are the Main Types of Analytics Models? 

Just as algebra, geometry and calculus are distinct approaches to math, business analysts use different approaches to understand and use data. There are four main types of data analytics models — descriptive, diagnostic, predictive and prescriptive — each with its own technique and business applications.  

Descriptive Analytics 

Descriptive analytics summarizes historical data to reveal trends, patterns and outliers. It answers the question, what happened?  

The descriptive approach leverages:  

• Data aggregation tools to collect and combine records 

• Business intelligence platforms to generate dashboards and scorecards 

• Reporting software to produce charts, tables and summaries  

Organizations rely on descriptive analytics to track key performance indicators (KPIs), monitor sales figures and understand customer behavior.  

Example: A retail chain compiles monthly sales reports by region. Executives review dashboards showing top product categories and seasonal peaks, and use these insights to guide their inventory planning for the next quarter.  

Diagnostic Analytics 

Diagnostic analytics digs into historical performance to uncover the root causes of events. It examines relationships among variables and identifies the factors that drove the outcomes, answering the question, why did it happen?  

The diagnostic approach leverages:  

• In-depth analysis to explore data at granular levels of detail 

• Statistical methods like correlation analysis and hypothesis testing 

• Data discovery tools that allow interactive querying and visualization  

Businesses apply diagnostic analytics to troubleshoot performance issues, evaluate marketing campaign effectiveness and detect anomalies in operational processes.  

Example: A software firm investigates a sudden drop in its users’ engagement. Analysts connect the usage rates of certain features and customer support tickets to the timing of the decline, revealing that a recent interface update confused users and reduced clicks.  

Predictive Analytics 

Predictive analytics uses historical data and statistical algorithms to forecast future outcomes. By building models that estimate probabilities and trends, it answers the question, what might happen next?  

The predictive approach leverages:  

• Machine learning algorithms such as decision trees and data point clustering 

• Time-series forecasting methods like autoregressive integrated moving average (ARIMA) 

• Programming libraries in Python and R  

Organizations use predictive analytics to forecast consumer demand, assess risk, predict customer churn and optimize inventory planning.  

Example: Professionals at an e-commerce company analyze past purchase history, website traffic data and promotional schedules to forecast holiday sales and adjust inventory levels accordingly.  

Prescriptive Analytics 

Prescriptive analytics recommends specific actions to achieve desired outcomes. It integrates predictive insights with optimization and simulation techniques to guide decision-making that answers the question, what should we do?  

The prescriptive approach leverages:  

• Optimization algorithms such as linear programming and genetic algorithms 

• Simulation models to test strategies under various scenarios 

• Advanced analytics platforms that combine artificial intelligence (AI), machine learning and business rules  

Businesses use prescriptive analytics to optimize their supply chains, schedule proactive maintenance, set dynamic pricing and personalize marketing campaigns.  

Example: A logistics provider applies prescriptive analytics techniques to delivery routing data. Factoring in traffic forecasts, fuel costs and vehicle capacity, the system suggests the most efficient routing plans, allowing the company to cut transit times and reduce costs.  

What Do Business Analysts Do? 

Business analysts turn raw data into strategic insights by applying data analytics models. They use model analytics to answer their organization’s most pressing questions and provide the context leaders need to be able to act.  

Beyond just providing technical analysis, business analysts act as the bridge between data teams and decision-makers. They must regularly translate complex findings into clear reports, dashboards and visualizations that answer those four critical questions:  

• What happened?  

• Why did it happen? 

• What might happen next? 

• What should we do?    

By framing information this way, business analysts help leaders and stakeholders make informed decisions that drive growth, efficiency and innovation.  

With more organizations relying on data to guide their operations — whether they are in sales, manufacturing, technology, education, healthcare or finance — professionals skilled in data analytics models are in high demand.  

Build Your Analytical Skills 

Understanding the four main categories of data analytics models is essential for those who want to have a foundation in analytics, but true expertise requires guided instruction and hands-on practice. Analysts also need strong communication skills and business acumen to be able explain their findings and influence executive decisions.  

The Bachelor of Science in Business Administration program with a concentration in business analytics from SEMO Online prepares students for success in this in-demand field. The program teaches statistical methods, machine learning and model analytics, ensuring graduates are qualified to pursue analyst and data scientist roles across industries. Southeast Missouri State University offers a range of on-campus and online programs to help students advance their career prospects, including a number of online business and technology degrees.  

Learn more about SEMO Online’s business analytics program to see how it can help you reach your professional goals. 

Recommended Readings 
Leading by Example: Justin Jansen’s MBA Journey 
What Is a BSBA Degree? 
What Should I Major in if I Want to Start My Own Business? 
 
Sources: 
Amplitude, “What is Diagnostic Analytics?” 
GeeksforGeeks, “Data Analytics and Its Type” 
IBM, “What Is Prescriptive Analytics?” 
Investopedia, “Business Analyst: Who They Are and What They Do” 
Investopedia, “Descriptive Analytics: What It Is and Related Terms” 
Investopedia, “Predictive Analytics: Definition, Model Types, and Uses”