What is Analytics? Part 2: A Longer Definition with 3 Main Categories

Michael Watson Ph.D Partner
Read Time: 2 minutes apprx.
defining analytics

In yesterday’s post, we discussed a short definition of Analytics (“the ability to collect, analyze, and act on data.”).

Of course, this is a broad definition.  To determine your appropriate analytics strategy, it is important to understand the different categories that make up the field of analytics.

A team from IBM published one of the better definitions of the three categories of analytics in the Analytics Magazine.  The article is worth a read.  Other organizations and universities, are also converging on the same three categories.  These three categories, from INFORMS, are:

Descriptive analytics

  • Prepares and analyzes historical data
  • Identifies patterns from samples for reporting of trends


Predictive analytics

  • Predicts future probabilities and trends
  • Finds relationships in data that may not be readily apparent with descriptive analysis


Prescriptive analytics

  • Evaluates and determines new ways to operate
  • Targets business objectives
  • Balances all constraints


As a side note, the article in Analytics Magazine also is careful to point out that the above three categories apply to structured data.  There is a branch of analytics that applies to unstructured data like analyzing consumer sentiment using Facebook and Twitter or analyzing written text for medical diagnosis like IBM’s Watson (from Jeopardy  fame).