Journal of Business Analytics

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Defining business analytics: an empirical approach

D. J. Power, C. Heavin, J. McDermott & M. Daly

To cite this article: D. J. Power, C. Heavin, J. McDermott & M. Daly (2018) Defining
business analytics: an empirical approach, Journal of Business Analytics, 1:1, 40-53, DOI:
10.1080/2573234X.2018.1507605

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Published online: 23 Aug 2018.

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JOURNAL OF BUSINESS ANALYTICS
2018, VOL. 1, NO. 1, 40–53
https://doi.org/10.1080/2573234X.2018.1507605

ORIGINAL ARTICLE

Defining business analytics: an empirical approach

a b c b
D. J. Power , C. Heavin , J. McDermott and M. Daly
a
Department of Management, College of Business Administration, University of Northern Iowa, Cedar Falls, Iowa, USA; bBusiness
Information Systems, Cork University Business School, University College Cork, Cork, Ireland; cThe Centre for Business Analytics, School
of Business, University College Dublin, Dublin, Ireland

ABSTRACT ARTICLE HISTORY

Searches of the Web using Google, and database searches of the academic and practitioner Received 4 June 2018
literature, return a large number of differing and varied definitions of the concept of business Revised 31 July 2018
analytics. This article reviews the growing literature on Business Analytics (BA) using tradi- Accepted 31 July 2018
tional and qualitative research tools. Our searches included using Google Search to identify KEYWORDS
examples of business analytics applications, and a focused keyword search of the available Business analytics (BA);
practitioner and academic literatures. Text analytics techniques identified frequently used analytics; definition; search;
terms in prior definitions of business analytics. Our empirical, inductive approach provides a Google Trends; text analysis
basis for proposing and explaining a formal sentence definition for Business Analytics. The
analysis provides a starting point for operationalising a measure for the business analytics
construct. Additionally, understanding business analytics can help managers assess skill
deficiencies and evaluate claims about relevance of tools and techniques. Finally, carefully
defining the Business Analytics concept should provide stimulus for new research ideas.

1. Introduction have limitations relative to focus and scope, level of

detail, measurability, and/or clarity.
Both analytics and data are increasingly central to
The primary objective of this article is to identify
decision-making in modern organisations. The
and review the existing definitions of “business
increasing ease of gathering, storing, and processing
analytics”1 to clarify this field of practice, instruction,
data has led to a highly varied and growing set of data
and scholarship. Our aim is threefold: (1) to assist
for analysis. Many employers want to hire people
managers in assessing skill deficiencies and needs, (2)
who can apply tools to analyse data and make sense
to support practitioners in evaluating vendor claims,
of what analyses are needed and what the results
and (3) to provide a starting point for operationalis-
mean. The terms business analytics (BA), big data
ing a measure of business analytics. The approach
analytics, data analytics, and data science identify
used in this study is both inductive and exploratory
the specialists who can meet this business need. All
with an emphasis on analyses that might inform
four terms are relatively new in the business lexicon.
creation of a useful definition of Business Analytics
Students and potential employers as well as faculty
for research purposes. The entire article provides
members need to know how the meanings of these
context and an extended connotative definition of
terms differ and overlap. Professors need to explore
Business Analytics.
and specify the course work for each area of specialty.
This article is structured into six additional sec-
Researchers need to operationalise and measure the
tions. The next section reviews the process of defining
impact of analytics activity, especially Business
concepts and provides some historical background on
Analytics, on outcomes including decision-making
the business analytics phenomenon. The third section
speed and business performance.
presents results from an empirical study of usage of
As the importance of business analytics continues
the relevant terms from public data sources. The
to increase so too do the number and variety of
following section describes and summarises examples
definitions for this concept. Similar to the past
of business analytics used in organisations. Section 5
waves of business innovation, like knowledge man-
summarises an analysis of business analytics projects
agement, operations research, and data mining, busi-
completed in the University College Dublin (UCD)
ness analytics has attracted attention and excitement
Master’s in Business Analytics degree program.
from managers, academics, software vendors, and IS/
Following these analysis sections, the next to the last
IT consultants. This excitement has resulted in some
section discusses the results of prior analyses and
confusion. Many existing definitions for the concept

CONTACT D. J. Power [email protected] Department of Management, College of Business Administration, University of Northern Iowa,
Cedar Falls, Iowa, USA
© 2018 Operational Research Society.
 JOURNAL OF BUSINESS ANALYTICS 41

limitations. The final section discusses our 2018), whereas “analysis” is an activity. Analytics is a
conclusions. singular noun, just like Economics or Physics.
The word “analytics” has been modified by many
words including business, data, marketing, big data,
2. Defining business analytics predictive, and prescriptive to create compound
nouns. The fundamental ideas of analysis – fact-
Defining concepts is especially important in science, based and logical problem-solving – provide a shared
mathematics, research, argumentation, and managing link for these varied compound nouns. Nelson (2017)
information. According to Smith (2018), the process defines analytics as “the scientific process or disci-
of definition has ancient origins. For Aristotle, a pline of fact-based problem-solving”. Davenport and
definition is “an account which signifies what it is to Harris (2007, p. 7) define analytics as “extensive use
be something” (logos ho to ti ên einai sêmainei). The of data, statistical and quantitative analysis, explora-
process of defining a concept or term, the definien- tory and predictive models, and fact-based manage-
dum, involves a number of activities including: (1) ment to drive decisions and actions”. Wilder and
explaining the origin of the term itself, its etymology, Ozgur (2015) define it as “the application of processes
(2) discussing the history of the term, (3) providing and techniques that transform raw data into mean-
examples, (4) showing how the concept fits into a ingful information to improve decision making”.
larger category, creating a hierarchy of abstraction, Finally, INFORMS recommends the definition:
(5) showing how the term differs from or is similar to “Analytics is the scientific process of transforming
others in the same class, and (6) exploring and pro- data into insight for making better decisions” (Boyd,
posing a formal sentence definition. 2012). Analytics is a broad umbrella term that
The motivation for defining terms is straightfor- includes business analytics and data analytics.
ward even though the process may be complex. Analytics is the progenitor concept for the compound
Defining terms makes our discussions more produc- word phrase “Business Analytics”.
tive and our analyses more logical. The Purdue The usage history of the term business analytics
Online Writing Lab (Pepper & Driscoll, 2018) dis- only extends back to the late 1990s, but it has roots in
cusses the importance of defining terms in writing to (1) scientific management, especially the ideas of
avoid misunderstandings with the audience. In the Taylor, Gantt, and Gilbreths, (2) the Western
physical and social sciences, research projects should Electric Hawthorne studies of Mayo and
begin with operational definitions so hypotheses can Roethlisberger, and (3) in operations research,
be tested. Ideally, an intensional, connotative defini- including the work of Dantzig, Koopmans, von
tion is developed that specifies necessary and suffi- Neumann, and many others. Management science
cient conditions for when a term should be used and decision sciences are sometimes considered as
(Cook, 2009). At a minimum, it is important to synonyms for operations research, and possibly
have a nominal, denotative definition that provides Business Analytics. The tools from past efforts to
the literal or primary meaning for a term. The pro- increase scientific analysis in business decision-mak-
cess of definition helps us to understand a phenom- ing are still in use, often under the umbrella of busi-
enon and investigate its scope and impact. ness analytics. The following analyses, results, and
Business analytics has an essence, a meaning. The discussion examine and establish the boundaries of
concept is an abstraction and generalisation of many the term business analytics, especially in the context
activities occurring in organisations. Technically, of supporting decision-making.
business analytics is a compound noun and one
would expect its meaning to be anchored in the two
independent concepts of “business” and “analytics”. 3. Analyses of public data sources
At some level of generalisation, business analytics is This section reports results from an empirical study
the application of analytics to business problems. The using multiple sources and tools, including: (1)
etymology of each component word is relevant. Google Trends and Google Ngram analyses, (2) text
Business itself is a relatively recent concept from the analyses of 15 definitions of business analytics, (3)
sixteenth century, but it refers to commercial activity text analyses of descriptions of Master’s degrees in
which dates to antiquity. Analytics has an ancient Business Analytics programs, and finally (4) a tradi-
origin and derives from the Greek word analȳtikós. tional search of article databases for the key term
The concept of analysis has its roots in logic, mathe- Business Analytics.
matics, and science. Aristotle prior to 323 BC
explored analytics in his classic monograph Prior
and Posterior Analytics, cf., Smith (2018). Analytics 3.1. Google Trends and Google Ngram analyses
differs from analysis in the suffix “-ics”, which means Google Trends and Google Books Ngram were used
a body of knowledge or principles (Dictionary.com, to create a context for keyword searches related to the
42 D. J. POWER ET AL.

Figure 1. Relative interest in key search terms Google Trends.

term “Business Analytics” and related terms starting these terms, especially “Operations Research”, have
in 2004 when the search data time series begins. had reduced popularity, with the term “Business
Google Trends is an online tool for comparison of Analytics” steadily increasing in search volume over
the popularity of terms searched by users of Google the last 14 years.
Search, and their trends over time. Google Books A Google Ngram search for the terms “Analytics”,
Ngram Viewer is an online tool for comparison of “Management Science”, and “operations research” for
the frequencies of strings using a yearly count of the period 1940–2008 shows the number of mentions
n-grams found in sources printed between 1500 and of the terms in the published literature, see Figure 2.
2008. Business Analytics was not used in the chart because
Figure 1 depicts the relative number of searches it did not appear in a significant number of sources.
for the terms “Management Science”, “Operations The Ngram in Figure 2 shows the discussion of
Research”, and “Business Analytics” between operations research in the literature peaked in about
January 2004 and May 2018. Some have speculated 1962, while management science peaked in 1978.
that Business Analytics replaces or is a synonym for Analytics is now more frequently discussed than
the concepts of management science and operations either of the other two terms by a small margin.
research. Comparing the number of searches for “Business
The data trends show an increase in search for Analytics”, “Business Intelligence” and “Data
Business Analytics during the period, a modest Analytics” over the 2004–2018 period, it is evident
decline in searches for management science and a that searches for “business analytics” and “data ana-
steep decline in searches for operations research. lytics” are on a steady increase, while the term
The search popularity of the three concepts changed “Business Intelligence” has had a steady decline, as
during the period. The term “Management Science” shown in Figure 3. Business analytics has become a
and “Operations Research” were popular search popular concept with search interest for the term
terms from 2004 until about 2008. More recently, steadily increasing since December 2011. When

Figure 2. Relative interest in key terms Google Ngram.

 JOURNAL OF BUSINESS ANALYTICS 43

Figure 3. Comparing analytics and business intelligence search terms.

compared to “Data Analytics”, “Business Analytics” is search behaviour may be an indicator that people
not however as popular in Google Search. Perhaps, were looking for an opportunity to improve their
data analytics is more general or people in business skills at a time when they were faced with economic
have less need to search for the term than in the past. uncertainty and job insecurity.
In March 2018, “Business Analytics” had a relative
search score of 42 and “Data Analytics” had a score of
3.2. Text analyses of definitions of business
96. In December 2011, both terms were at about 10.
analytics
There are many business and data analytics articles
and examples available online: in some sources, an Positive trends indicate people have been interested
analytics tool like credit scoring is categorised incon- in finding out more about business analytics in recent
sistently as either type of analytics, perhaps reflecting years, but that fact is only a starting point. Text
disagreement about whether these two concepts are analytics can identify patterns in content-like defini-
distinct, overlapping, or identical, or one is a subset tions. The definitions found in the top 15 results of a
of the other (Rose, 2016). Google Search for a definition of “Business Analytics”
The Google Trends tool was also used to understand are presented in Table 1.
the number of Google searches for popular Master’s The first five definitions numbered 1–5 in Table 1
degree programs, i.e., Master’s in Business are returned on the first page of results. “Business
Administration and Masters in Business Analytics. Analytics” definitions were relatively easy to identify
Figure 4 depicts the number of searches for “Master’s up to definition 9 in Webopedia. From definition 10
in Business Administration” compared with “Master’s in through 15, it was more difficult to identify a defini-
Business Analytics”. Many universities offer a Master’s in tion for the specific search term. Instead of defini-
Business Analytics, and in some cases this Master’s pro- tions for “Business Analytics”, search results for that
gram is more popular than its long-standing MBA pro- term included definitions for “Business Intelligence”,
gram offering. “Data Analytics”, and “Business Analytics versus Data
Noticeably, the number of searches for the term Analytics”. Reading and manual sorting were
“Master’s in Business Administration” has spiked at required.
various points over the last 15 years. The search for What is in common to these 15 definitions?
this term rose sharply and fell again at the start of the Concepts like methods, techniques, and technologies
most recent global economic crisis in 2008. This recur. The methods mentioned include statistics and

Figure 4. Comparing interest in two Master’s degree programs.

44 D. J. POWER ET AL.

Table 1. Top 15 business analytics practitioner definitions.

Source Business analytics definition
1. Gartner IT glossary (2018) “comprised of solutions to build analysis models and simulations to create scenarios, understand realities and predict
future states”.
2. SearchBusinessAnalytics “practice of iterative, methodical exploration of an organization’s data, with an emphasis on statistical analysis.
(2018) Business analytics is used by companies committed to data-driven decision-making. BA is used to gain insights that
inform business decisions and can be used to automate and optimize business processes”.
3. Wikipedia (2018) “skills, technologies, practices for continuous iterative exploration and investigation of past business performance to
gain insight and drive business planning”.
4. Galetto (2018) “study of data through statistical and operations analysis, the formation of predictive models, application of
optimization techniques, and the communication of these results to customers, business partners, and college
executives”.
5. Techopedia (2018) “all the methods and techniques that are used by an organization to measure performance. Business analytics are
made up of statistical methods that can be applied to a specific project, process or product”.
6. Study.com (2018) “is the statistical analysis of the data a business has acquired in order to make decisions that are based on evidence
rather than a guess”.
7. Techadvisory (2014) “to gain insights into the state of the company, and even drive future decisions based on existing data”.
8. Management study guide “is a methodology or tool to make a sound commercial decision”.
(2018)
9. Beal (2018) “is the combination of skills, technologies, applications and processes used by organizations to gain insight into their
business based on data and statistics to drive business planning”.
10. Business dictionary (2018) “process of determining and understanding the effectiveness of various organizational operations. Business analytics
can be either focused on internal or external processes. Different specializations exist, encompassing most major
aspects of business, including risk analysis, market analysis, and supply chain analysis”.
11. Pratt (2017) “a technology-aided process by which software analyses data to predict what will happen (predictive analytics) or
what could happen by taking a certain approach (prescriptive analytics). BA is also sometimes called advanced
analytics”.
12. Schaer (2018) “allows your business to make predictive analysis rather than reacting to changes in data”.
13. Gabelli School of Business “involves applying models, methods, and tools to data, producing insights that lead to informed business decisions”.
(2018)
14. Wells (2008) “the application of logic and mental processes to find meaning in data”.
15. Lynda (2018) “allows us to learn from the past and make better predictions for the future”.

optimisation. Also, the definitions seem to share a The size and boldness of the words indicate the
goal of improving and supporting business decision- frequency that these words are used in the definitions
making. Based upon the sources, the definition of provided to the Word Cloud generator. Figure 5
business analytics does vary when referring to an highlights three terms: “business”, “analysis”, and
academic program versus the application of business “data”. The other 92 words illustrated are used less
analytics in real-world settings. A definition for frequently across the 15 definitions.
research purposes needs to be especially well con- Using the 15 definitions from Table 1, SAS JMP
structed so that the concept can be operationalised. software was used for text analysis to identify
From a subjective perspective, definitions 1, 6, 10, patterns for word and phrase frequency across
and 12 have problems with focus and scope. the definitions. Fifteen definitions were uploaded
Definitions 4, 8, 13, and 15 are very general. to JMP using an MS Excel spreadsheet, and the
Measurability is especially a problem with most of output from the text analysis is illustrated in
the definitions, and clarity is a problem with defini- Figure 6.
tions 5 and 14. “Business”, “data”, and “analysis” are the top three
To more systematically understand the content of most frequently used words identified in the 15 defi-
the 15 definitions in Table 1, a Word Cloud2 was nitions analysed. The distribution of frequency of
generated and it is shown in Figure 5. Ninety-five word occurrences then declines, with “insights”
words appeared at least twice. occurring five times and “decisions”, “gain”, “pro-
cess”, and “statistical” each occurring four times
across the 15 definitions. Seven word phrases occur
more than once in the 15 definitions. The term “gain
insights” was the most frequently used phrase occur-
ring four times.

3.3. Text analysis of Master’s in business

analytics programs
Using the Worditout3 text analysis tool, the descrip-
tions of Master’s degree programs in Business
Analytics were processed to understand the words
used most frequently. Noticeably, there is a lack of
Figure 5. Business analytics definitions – text analysis. common program title across the universities. A
 JOURNAL OF BUSINESS ANALYTICS 45

Figure 6. Text analysis of top 15 definitions.

program title could be Masters of Business Analytics,

Master’s of Business Analytics, or Master’s in
Business Analytics. These are used interchangeably
and inconsistently in program descriptions and pro-
gram content.
Using select courses, program description, and
“What’s Unique” program content, a total of 745
words were filtered from the original sources. Only
words with a minimum frequency of seven times in
the text were displayed in the Word Cloud. The
highest frequency word had 92 occurrences. A
total of 43 words matched the filtering criteria.
The higher the frequency, the more prominent the
word in the output in terms of size and colour. Figure 7. Word Cloud results from 12 Master’s in business
analytics program descriptions.
Descriptions (Betterbuys 2018) at a Website for
Top Big Data and Analytics Master’s Programs
were used to identify programs titled “Business Using SAS JMP, the Master’s degree program
Analytics” from 12 top US universities. The univer- descriptions were used to identify commonly used
sity program descriptions at that site were used in phrases to describe the programs offered by the 12
the analysis. Universities included the following: universities. Figure 8 presents the top results from
Arizona State University, Bentley University, this text analysis.
Drexel University, Fordham University, The Unsurprisingly, the term “Business Analytics”
George Washington University, Michigan State occurs 21 times across the program descriptions.
University, NYU Stern, Rensselaer Polytechnic The term “Data Mining” also occurs 11 times: the
Institute, University of Connecticut, University of majority of these Master’s in Business Analytics
Michigan–Dearborn, UNC Charlotte, and The programs offer data mining as one course in the
University of Tennessee. See the results in Figure 7. program. Five occurrences of the phrases “data
“Business”, “data”, and “analytics” are highlighted management”, “decision-making”, and “real
in the Word Cloud. There are no surprises. Courses world” are identified. Noticeably, more than half
and programs were described. Science, skills, and of these Master’s programs place significant
analysis were also used repeatedly. The diversity in emphasis on students acquiring real-world or
describing programs is evident in the many low-fre- hands-on experience as part of the program in
quency words used in the 12 descriptions. question.
46 D. J. POWER ET AL.

Scholar, EBSCO, JSTOR, and Web of Science

(WOS), for academic journal articles written in
English. The searches yielded varying results (see
Table 3).
Some initial searches in each database indicated
that 2002 marked the earliest journal paper published
on the topic of “Business Analytics”. All four data-
bases identified Kohavi, Rothleder and Simoudis’s
(2002) article entitled “Emerging trends in Business
Analytics” as the first article in an academic journal
Figure 8. Master’s in business analytics program description to use the term. While this 2002 paper does not
phrase analysis.
specify a formal definition for business analytics,
Kohavi et al. state that business analytics offers
3.4. Searching for business analytics
users “better insights, particularly from operational
So, how many results are there for the term business data stored in transactional systems” (p. 45). In this
analytics in a Google Search? Entering the search article, Kohavi et al. seem to use the term data mining
phrase – “Business Analytics” – in the Google as a synonym for business analytics. Currently, there
Search Engine returns about 8,600,000 results. Other is broad agreement that data mining is only one of
search phrases are also shown in Table 2. many business analytics tools.
Searching for variations on the term “Business Investigation of the earliest articles between 2002
Analytics” highlights the huge number of websites, and 2008 across the four databases for the search
webpages, news articles, vendor articles, blogs, etc. term “Business Analytics” indicated that there was
dedicated to or related to the topic of business analy- no discipline-specific critical mass of articles pub-
tics online. Notably, during the time of writing this lished during that time period. Academic articles
article, the search results were updated regularly in an published during the period were in the disciplines
attempt to capture the most up-to-date number of of Information Systems (IS), Computer Science,
search results for these terms. Statistics, and Finance. In EBSCO, a keyword search
An investigation of the academic literature for the for “Business Analytics” between 2002 and 2008
same search terms also yielded significant results as yielded two results: Kohavi et al.’s (2002) CACM
presented in Table 3. Using the terms “Business article and a corporate finance article by Gnatovich
Analytics”, Define “Business Analytics”, “Define (2007). Gnatovich’s article entitled “Making the Case
Business Analytics”, and “Business Analytics for Business Analytics” discussed the opportunities
Definitions”, we searched four databases, Google for business intelligence to improve organisational
compliance with regulations such as Sarbanes Oxley.
This article is among the earliest to discuss analytics
Table 2. Summary of Google searches.
as a “hot” topic for business. A similar search in
Term Google
JSTOR yielded one result for the search term and
“Business Analytics” 8,600,000 results
Define “Business Analytics” 668,000 results time period. This IS article was entitled “A Privacy-
“Define Business Analytics” 14,300 results Protecting Business-Analytics Service for On-Line
“Business Analytics Definition” 21,800 results

Table 3. Summary of academic literature searches.

Search terms Google Scholar EBSCO JSTOR Web of Science
“Business Analytics” 2001–2018 (Title and abstract) Open search 2001–2018
17,400 results 2001–2018 2001–2018 486 results
2002–2008 462 results 117 results (Academic Journals); 250 (Academic Journals);
1840 results (Academic Journals); 2002–2008 2002–2008
118 results 16 results (Academic Journals) 5 results
2002–2008 (title and abstract search)
2 results (Academic Journals) 1 result (Academic Journal)
Define “Business Analytics” 2001–2018 NA 35 (Academic Journals) 18 (Academic Journals)
121,000 results
2002–2008
18,400 results
“Define Business Analytics” 2001–2018 NA NA NA
32 results
2002–2008
0 results
“Business Analytics Definition” 2001–2018 NA NA NA
8 results
2002–2008
0 results
 JOURNAL OF BUSINESS ANALYTICS 47

Transactions” by Berendt, Preibusch, and Teltzrow (I&A) landscape in 2011. Their suggested term BI&A
(2008). This article uses the terms “Business was not adopted, rather the term has been simplified
Analytics” and “Data Mining” interchangeably to to Business Analytics. Chen et al.’s (2012) article
propose a framework for privacy in web analytics demonstrates how quickly technology and terminol-
on customer data. ogy have changed.
A Google Scholar search for the terms – Define
“Business Analytics”, “Define Business Analytics”,
4. Examples of Business Analytics in use
and “Business Analytics Definitions” – yielded many
results. Investigating the 39 results from the “Define Specific examples of business analytics are discussed
Business Analytics” search published from 2001 to by many sources. Concrete examples help make BA
2018, one finds that more than half the papers less abstract and hence will help operationalise a
returned were related to the management accounting measure of the concept. Hayakawa (1978) discusses
area, while the remainder are spread across IS, com- a ladder of abstractions with four levels. Level 1 refers
puter science, and statistics. to concrete identifiable examples that help inform
A search for the term “Business Analytics” using higher levels of abstraction.
WOS returned 250 journal articles published between Banks and other businesses use business analytics
2001 and 2018. Figure 9 shows that the publication to classify and segment customers based on credit
frequency of academic journal articles related to busi- risk, usage and other characteristics, and use algo-
ness analytics has gained considerable momentum rithms to match customer characteristics with appro-
since 2012. There has been steady growth in publishing priate product offerings. An airlines manager who is
in this area. considering investing in a new route uses analytics to
Further analysis of business analytics academic predict future travel demand for the destination.
publications at WOS indicates that the top categories Managers prepare revenue forecasts. Operations ana-
for these 250 published academic journal articles lytics might examine product cost, quality control,
include computer science and IS with 72 articles, and the throughput of resources in production lines.
management with 68, and operations research/man- Machine monitoring and machine failure tracking are
agement science with 63 journal articles. These areas common. Optimising production and work schedules
account for more than 80% of the business analytics- has been ongoing for many years. Score cards and
related academic journal articles published and avail- Key Performance Indicator (KPI)s are common
able on WOS between 2001 and 2018. methods of analytics. Marketing groups use predic-
From our investigation of the keyword searches tive analytics for sales lead scoring. Patient costs and
across the four databases presented in Table 3, we care metrics are monitored in many hospitals.
noted the number of citations of “Business Analytics” According to McKinsey (2013), examples of busi-
articles. Based on our search, Chen, Chiang, and ness analytics uses include pricing flexibility and dif-
Storey (2012) “Business Intelligence and Analytics: ferentiated pricing, customer preference
From Big Data to Big Impact” is the most cited article management, credit risk analysis, fraud protection,
with 2863 citations to date. This article provided the discount targeting including using real-time location
academic community with a holistic, comprehensive data to target customer offers, campaign lead genera-
perspective on the business intelligence and analytics tion, creating an integrated “picture” of a household

Figure 9. Business analytics academic journal papers 2001–2018.

48 D. J. POWER ET AL.

and its product/brand holdings, churn/retention 5. Real-world business analytics course projects
models, customer acquisition targeting, cross selling/
The prior analysis of 12 Master’s in Business
upselling, and advertising targeting especially for
Analytics programs highlighted a focus on “hands-
online and in social media.
on” or “real-world” experiences for students taking
There are many interesting and innovative uses of
these courses. This section examines data from the
business analytics. An especially interesting example
MSc in Business Analytics program at UCD on cap-
is a use at Coca-Cola Amatil, the largest bottler and
stone analytics projects. These are usually real-world
distributor of non-alcoholic, bottled beverages in the
projects proposed by and in collaboration with part-
Asia-Pacific. Staff developed the Trax Retail
ners in industry and the public sector. Looking at the
Execution application. According to Faggella (2018):
content of these projects can assist in creating an
Coca-Cola Amatil sales reps used Trax Retail Execution extensional definition of business analytics
image-based technology to take pictures of store’s (McDermott, 2017).
shelves with their mobile devices; these images were A dataset consisting of the projects undertaken by
sent to the Trax Cloud and analyzed, returning action-
able reports within minutes to sales reps and providing
students of the UCD MSc in Business Analytics over a
more detailed online assessments to management. 6-year period (2011–2017) was created and analysed.
The projects were manually labelled by industrial sector,
Sales reps could quickly identify performance gaps by business function, and by analytics method(s) used.
and take corrective actions in the store. Almost all sectors of the economy are represented, from
As CMGA report (2016) notes: obvious candidates like finance and transport to sports,
At Unilever, the finance function has created a data agriculture and forestry, and the public sector. The data
dashboard that draws upon a diverse set of sources, on industry sectors are presented in a Word Cloud in
from social media through to market research agen- Figure 10.
cies, to provide a set of KPIs that are globally rele- These analytics projects are in most business func-
vant, consistent and tangible. Critically they can be
tions – from core functions and operations through
linked back to P&L reporting and cash flows.
to sales, CRM, and HR.
According to Revionics Press Release (2018), Lenta, A wide variety of analytical methods are used in
one of the largest retail chains in Russia, plans to deploy projects, as shown in Figure 11.
Revionics price optimisation across all of its Methods range from descriptive statistics, to a tradi-
Hypermarkets and Supermarkets in 2018. Chris tional tool like regression analysis, to more advanced
Newbery, Lenta’s Customer Loyalty Director, reported machine learning. Supervised and unsupervised learn-
that: ing are popular tools. There is continued interest in
optimisation methods, both “classical” and metaheur-
with Revionics analytics and machine learning opti-
mization we are able to review our store zones, istic. Decision analytics also remains popular. These
improve our KVI lists and define specific roles for topics reflect a broad interpretation of analytics in the
every single category, all the while delivering very UCD program, and also reflect its roots in the fields of
focused competitive pricing that engages customers operations research and management science.
and inspires loyalty. Text processing and time-series methods appear
According to Teradata Press Release (2018): also either as stand-alone methods or as inputs to
other algorithms. Projects also often include more
Overstock.com Inc. is using Teradata Path Analysis as niche methods including spatial analytics, recom-
part of its customer journey analytics. Overstock, a
mender systems, network models, and simulation
leader in online retail, needed a path analysis solution
to visually analyse customer data from multi-channel methods. Over time, there has been an increased
marketing campaigns and key customer milestones in interest in extracting value from the text, spatial,
their journeys. With the overall goal of reducing unne- network, and other forms of non-tabular data. This
cessary marketing spend and identifying loyalty reflects business intuition that value can be extracted
opportunities, Overstock is leveraging a pathing inter- from such data, and a recognition that basic tools and
face developed by Teradata to put advanced path ana-
lysis, once solely the domain of specialists and data approaches like linear regression are a poor fit for
scientists, directly into the hands of marketers, busi-
ness analysts and non-technical professionals.

Specific examples of a phenomenon can provide a

basis for generalising a definition of a phenomenon.
The above examples of business analytics broadly
defined help identify the boundaries and content to
enumerate an operational definition. These concrete
examples provide a basis for abstraction of the Figure 10. Industry sectors for UCD MSc business analytics
Business Analytics phenomenon. projects.
 JOURNAL OF BUSINESS ANALYTICS 49

Figure 11. Methods used in UCD business analytics projects.

such problems. The dominance of supervised learn- are two primary categories of business analytics: (1)
ing suggests that there are opportunities for deep routine or routinised business analytics that may be
learning and other advanced algorithms which can incorporated in decision support and decision auto-
go beyond the performance of standard regression mation systems and (2) non-routine, special study
and classification techniques. Overall, there is conti- business analytics used by an analyst to prepare
nuing evidence of novel applications and methods in recommendations in a non-recurring decision
projects each year. situation.
Defining “Business Analytics” has a political
dynamic. Many software vendors want their software
6. Discussion of prior analyses and business
positioned as a BA tool or as a core BA technology.
analytics
Industry analysts like Gartner define BA to create a
This qualitative, interpretive research article describes context for their services. Also, academic administra-
an empirical approach to creating both a nominal, tive stakeholders define their BA program so that it is
denotative definition of Business Analytics and an recognised as reputable, or as the best, or as innovative
intensional, connotative definition. Both types of defi- or leading edge. Journals and conferences use the term
nition help better understand this phenomenon. BA to attract people to read, download, and cite arti-
There are useful definitions in academic textbooks cles and papers and attend conferences. Academic
like Sharda et al. (2014) that provide nominal, deno- researchers want to be the first to understand a
tative definitions. Sharda et al. (2014) define Business “new” phenomenon, to advance our knowledge, and/
Analytics as “the application of models directly to or to impact teaching or practice. Stakeholders have
business data. Business analytics involve using DSS diverse interests in the definition of a “new” phenom-
tools, especially models, in assisting decision makers enon. Creating a shared understanding of the business
(p. 393).” This definition is narrowly focused and analytics concept must recognise that the definition
more appropriate for instruction than it is for creat- might vary depending upon context and usage. For
ing a measure or identifying skill deficiencies. example, an academic program in BA might explain
From a connotative perspective, business analytics the term in a different way than a vendor explaining
differs from the general concept of analytics by their approach to business analytics.
requiring business relevance and actionable insights Even though the approach used in this study was
from analyses, and business analytics is especially decidedly empirical, a decision support bias likely
focused on improving performance. From a more influenced the interpretations. Word Clouds and
denotative perspective, BA uses statistical and opera- word occurrences must be interpreted. This analysis
tions analysis tools with a specific dataset. Business has been wide ranging and the focus has been upon a
analytics can provide evidence for decision-making. rich understanding of the business analytics
An examination of the examples suggests that there phenomenon.
50 D. J. POWER ET AL.

Concerning future research in business analytics, Several researchers have focused on specific
it may be useful to divide it into three types, which application areas of business analytics, e.g., health
we term “tools”, “implementation”, and “organiza- care (Chen et al., 2012; Gupta & Sharda, 2013),
tional impact”. Research on tools consists of location (Pick, Turetken, Deokar, & Sarkar, 2017),
research situated in one of the component disci- education (Chen et al., 2012), sports analytics
plines of BA. BA practice and instruction relies (Davenport, 2006), insurance (Hopkins & Brokaw,
upon many academic disciplines including statistics, 2011), and hospitality/entertainment (Chen et al.,
operations research, management and decision 2012; Davenport, 2006). Given the data-intensive
sciences, and computer science. Each discipline nature of most types of modern business, it is
contributes tools and methods for performing data unsurprising that BA is a differentiating factor
analyses, modelling situations, and supporting deci- between organisations operating in the same indus-
sion-making. For example, the development of try (Davenport, 2006). At the heart of every busi-
improved methods for regression is a topic for ness, managers have decision-making needs and
research in statistics and machine learning, and these may be met by designing, developing, testing,
the development of new database and processing and refining effective business analytics approaches,
infrastructures is a topic for research in information selecting the right mix of BA tools and techniques
technology. Both count as business analytics for the right decision problem.
research since these disciplines are subsumed The healthcare sector is data/information/
under BA. They respond to a BA need. Business knowledge intensive with multiple stakeholders.
analytics researchers and practitioners interested in It is considered nuanced and complex.
this research agenda will draw on the literature Healthcare analytics can support a wide mix of
specific to the discipline in question, sometimes operational and clinical managerial decision-mak-
making relatively little contact with the BA litera- ing including monitoring financial performance,
ture per se. Lim, Chen, and Chen (2012) outline a operational efficiency, patient treatment, and
“business intelligence and analytics” research patient health outcomes. We are only beginning
agenda focusing on this type of research. to scratch the surface on the potential for busi-
Research on BA implementation is concerned ness analytics in the healthcare domain. In indus-
with taking known tools from the component dis- tries where operational efficiency and data-driven
ciplines and applying them to real problems. Thus, it metrics have been incorporated in business prac-
often consists of BA case studies. These are more tices, certain organisations are using BA to
integrative than studies of the first type, with more achieve further improvements beyond the current
emphasis on business outcomes than purely techni- best industry standard. For example, Hopkins and
cal ones. Brokaw (2011) reported on Assurant Solutions
Research on organisational impact has a more IS significant customer retention improvement and
flavour. It asks a very different set of questions: how upselling of credit insurance and debt protection
can we measure BA project success and added value? products when non-conventional parameters were
What factors are associated with BA project success? taken into account when routing calls in their call
What is the impact on organisational structure and centre.
on society of adopting BA? Several researchers have Finally, “What is the financial impact of business
identified these questions, surveyed the literature, and analytics?” In an interview with Power (2006) many
framed BA (sometimes in combination with big data years ago, Henry Morris, Fellow for International
or business intelligence) as a development in the field Data Corporation’s (IDC) Worldwide Big Data,
of IS, to be studied using the frameworks of that field. Analytics and Cognitive Software Research and foun-
Grover, Chiang, Liang, and Zhang (2018) surveyed der of the Analytics program, was asked this
the question of how business value is created by “big question.
data and analytics”. Abbasi, Sarker, and Chiang Morris’s response in 2006 was:
(2016) proposed a framework for research into the
“information value chain” in the context of big data, Three years ago IDC published a study on the finan-
cial impact of business analytics. We examined 42
using three IS research traditions (“behavioral,
analytics projects across North America and Europe
design, and economics of IS”). In their editorial to a in a variety of industries, collecting metrics from
special issue, Sharma, Mithas, and Kankanhalli (2014) business users and IT. There was a significant return
foresaw a trend from one-off decisions informed by on investment. The benefits we could measure had to
analytics to a more pervasive change in decision- do with labour productivity improvements and busi-
making processes. They therefore called for more ness process enhancement (i.e., driving more rev-
enue or reducing business costs). The biggest
research into “behavioural, organizational and strate- challenge of the study was finding organizations
gic issues” to help understand impact on that had maintained metrics that we could examine.
organisations. And this raises an important point – the need to
 JOURNAL OF BUSINESS ANALYTICS 51

clarify objectives and capture data that will enable an track data about business analytics projects, moni-
analysis of the business impact of an analytics tor results, and continually improve and expand
project. the use of analytics. Analytics has become part of
In the 2002 IDC study, Morris et al. (2003) found that: the job of every manager.
Any BA program occupies a place in the spec-
a business analytics implementation generates a trum between Computer Science/Mathematics/Data
median five-year return on investment (ROI) of
Science (on one hand) and Business and
112% with a mean payback of 1.6 years on average
costs of $4.5 million. Of the organizations included Management (on the other). Business analytics
in this study, 54% have an ROI of 101% or more. requires both technical and business knowledge. A
major problem in designing a BA curriculum is
Morris et al. (2003) concluded “Business analytics that the boundaries are not distinct. This “pro-
solutions are the next step in using technology to blem” does permit and encourage academic entre-
support the decision-making process. These solu- preneurs to create a differentiated program of
tions provide trend analysis and performance feed- study.
back and facilitate decisive actions that result in Is “Business Analytics” an emerging discipline, a
measurable gains in cost efficiency or revenue research area or a field of study? Is it a subfield of
growth.” something called Data Science or Management
The presumption has been that using data with Science? It is too soon to answer these questions
quantitative models can generate evidence and results definitively, but business analytics is more than
that will influence choices and improve decision qual- buzz or a faddish marketing term. So what defini-
ity and business performance. Are organisations tion is appropriate for a broad set of purposes and
achieving these results? Are the Morris et al.’s uses including creating a measure for empirical
(2003) results still achievable? studies?
Business Analytics is a systematic thinking pro-
cess that applies qualitative, quantitative, and sta-
7. Conclusions tistical computational tools and methods to
The concept of business analytics is still evolving. analyse data, gain insights, inform, and support
There is no single, widely known, authoritative defi- decision-making. Any particular analysis may use
nition of business analytics. That goal seems unrea- a variety of techniques including diagnostic, pre-
sonable to expect given the varied usages of the term dictive, prescriptive, and optimisation models.
in practice, academic programs, and research. Also, Both business analytics and data analytics are spe-
what we teach as “Business Analytics” varies among cialised subtypes of analytics. The concepts diagnos-
universities. tic, predictive, and prescriptive analytics refer to types
In 2012, Chen et al. wrote an extensive review of of models, and all three are shared subtypes of both
business intelligence and analytics research that was business and data analytics.
included in the special issue of MIS Quarterly they Perhaps, this definition could have been pro-
edited. They started a conversation about: posed without any empirical analysis by an expert,
but the background, text analysis, and literature
how the IS discipline can better serve the needs of search results provide context. Also, the prior sec-
business decision makers in light of maturing and
emerging BI&A technologies, ubiquitous Big Data,
tions provide evidence about the meaning of this
and the predicted shortages of data-savvy managers evolving phenomenon. Our objective was to
and of business professionals with deep analytical inductively lead readers through analyses to help
skills. How can academic IS programs continue to them assess the meaning of business analytics. Our
meet the needs of their traditional students, while overall objective is promoting understanding not
also reaching the working IT professional in need of encouraging memorisation of a definition. So how
new analytical skills? (p. 1185)
does the above definition improve upon the more
The field of business analytics has matured than 20 definitions in this article? The proposed
since 2012, but much more needs to be done to definition builds upon concrete examples, prior
address the questions they raised. Business analy- research, and search results. The focus and scope
tics does involve IS, but it is a cross-disciplinary are on business decision-making in general, there
area of research and practice that has evolved is some detail about analytics, but every possible
rapidly. method and tool is not enumerated, the definition
Business analytics covers many activities and is concrete enough to assist in developing mea-
tasks. The results from implementing business sures, and finally, the construction of the sen-
analytics seem to vary by the amount of use and tences and word choice are understandable and
the commitment to using business analytics in succinct. This definition is a brief stopping point
decision-making. It is important for managers to on a journey.
52 D. J. POWER ET AL.

Notes Extensional_and_intensional_definitions#Intensional_
definition
1. We use Business Analytics when referring to the Davenport, T. H. (2006). Competing on analytics. Harvard
definition or the specific search term, otherwise we Business Review, 84(1), 98.
use business analytics or BA. Davenport, T. H., & Harris, J. G. (2007). Competing on
2. worditout.com/word-cloud/. analytics: The new science of winning. MA: Harvard
3. https://worditout.com/word-cloud/create. Business School Press.
Dictionary.com. (2018, July 21). “-ics”. Retrieved from
http://www.dictionary.com/browse/-ics.
Acknowledgments Faggella, D. (2018, June 1). Business intelligence & analy-
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Cork and University College Dublin who provided com- ness-intelligence-analytics-case-studies-across-industry
ments, feedback and suggestions following a presentation Gabelli School of Business. (2018). Define Business
of many of the analyses and ideas included in this article. Analytics. Retrieved from https://www.fordham.edu/
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https://www.gartner.com/it-glossary/business-analytics.
No potential conflict of interest was reported by the
Gnatovich, R. (2007). Making a case for business analytics.
authors.
Strategic Finance, 88(8), 46.
Grover, V., Chiang, R. H. L., Liang, T. P., & Zhang, D.
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