While there are a few different possible answers to the question: “data dashboards are a type of _________ analytics“, there is only one correct answer in this particular context. Note that this question is commonly asked on business analytics exams.
Question: data dashboards are a type of _________ analytics
Depending on which platform you are using or even which person you are talking to, the answer to this question will vary. Before we share the most common answer, let’s first define the three main categories of analytics:
- Descriptive Analytics – At the highest level, this is looking into the past to understand what has happened.
- Predictive Analytics – This typically uses statistical models and forecasting to look at what could happen.
- Prescriptive Analytics – Using simulations and related techniques to recommend what we should do.
Why is “Descriptive Analytics” the correct answer?
As noted above, this kind of analytics looks at historical information. Most commonly business or data dashboards (for example, Domo dashboards) are measuring what has happened in this business, looking at historical information that has been aggregated and prepared for analytics use cases. Dashboards typically show higher-level historical metrics (even if updated daily or intra-day). Many times dashboard users look at the analysis over time with various date dimensions like year-over-year, month-over-month. Since descriptive analytics answers the question, “what happened?” by communicating trends and changes over a period of time, the answer to the question is Descriptive Analytics.
Descriptive analytics is being leveraged by most companies today, typically using business intelligence (BI) tools like Domo or even Excel to create visualizations that help better understand the business and act on what is learned in time to make a difference.
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Check out our article, What is a Graph Database? for more info.