Which element of business intelligence focuses on historical data analysis?

Descriptive analytics is the element of business intelligence that focuses on the analysis of historical data. It involves examining past data to identify trends and patterns, allowing businesses to understand what has happened over a specific period. This type of analysis helps organizations gain insights from historical performance, which can inform decision-making processes.

For instance, businesses might use descriptive analytics to generate reports on sales figures over the previous year, assessing which products performed well and which did not. This analysis often employs various statistical methods to summarize past events and outcomes, providing a foundation for further data exploration and decision-making.

Descriptive analytics is crucial for organizations because it provides the necessary context to evaluate their current standing and strategize for future growth based on past behaviors and outcomes. In contrast, predictive analytics anticipates future outcomes based on current and historical data, while prescriptive analytics recommends actions to achieve desired results. Transactional analytics would deal with data related to specific transactions rather than providing a broad overview of historical performance.