Business Analytics is an art and science of developing key insights and understanding of business performance based on past data and statistical methods. Business Analytics can be classified broadly into the following categories.
'what happened in the past' : standard reporting
'why it happened' : statistical analysis
'what-if' the trends continue or change : simulation
'what will happen in the future' : predictive modeling
Financial Analytics focuses on income statement, balance sheet and cash flow statement related metrics for corporations. Financial Analytics focuses on pricing, order book, trading, clearing, and settlement related metrics for investment firms. They can be classified broadly into the following categories
financial ratios: margins, profitability, liquidity, activity, turnover, profitability etc.
trading metrics: volume, assets, volatility, latency, commissions, price impact, win-to- loss ratio, arrival price, relative cost etc.
order book metrics: spread, order sizes, bid, ask, depth, execution speeds etc.
clearing and settlement metrics: margins, success vs fails, root causes, discrepancies, magnitude and distribution of replacement costs etc.
Risk management area primarily focuses on financial risk with a focus on capital requirements, operational risk assessment, expected losses, probability given default, loss given default, beta distributions, credit risk models such as the Merton model. In addition, enterprise risk management and compliance assessments also cover areas such as SOX 404 compliance requirements, business continuity, disaster recovery, product risk, hazard risk to regular operations, regulatory risk and automated filings.
We define Business Intelligence (BI) as your ability to know more about your firm than what your competitors know about your firm. Unlike business analytics which is more strategic in nature, BI tends to be more technical and operational in nature. We have implemented Oracle Business Intelligence (financial analytics, procurement and spend analytics, order management and customized sales and supplier analytics), Business Objects, Spotfire, SAS and Micro Strategy. Data is collected from systems such as Oracle EBS, Hyperion, PeopleSoft, and various other finance databases and data warehouses.
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