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The first stage of business analytics is descriptive analytics, which still accounts for the majority of all business analytics today.<ref>{{cite journal|last=Davenport, Tom |title=The three '..tives' of business analytics; predictive, prescriptive and descriptive|journal=CIO Enterprise Forum|date=November 2012}}</ref> Descriptive analytics looks at past performance and understands that performance by mining historical data to look for the reasons behind past success or failure. Most management reporting – such as [[sales]], [[marketing]], [[Business operations|operations]], and [[finance]] – uses this type of post-mortem analysis.
[[File:Three Phases of Analytics.png|thumb|right|Prescriptive Analytics extends beyond predictive analytics by specifying both the actions necessary to achieve predicted outcomes, and the interrelated effects of each decision.]]
The next phase is predictive analytics. Predictive analytics answers the question of what is likely to happen. This is where historical data is combined with rules, [[algorithms]], and occasionally external data to determine the probable future outcome of an event or the likelihood of a situation occurring. The final phase is prescriptive analytics,<ref>{{cite journal|last1=Haas|first1=Peter J.|author1-link=Peter J. Haas (computer scientist)|last2=Maglio|first2=Paul P.|last3=Selinger|first3=Patricia G.|author3-link=Patricia Selinger|last4=Tan|first4=Wang-Chie|issue=12|journal=Proceedings of the VLDB Endowment|title=Data is Dead…Without What-If Models|volume=4|year=2011|pages=1486–1489|doi=10.14778/3402755.3402802|s2cid=6239043}}</ref> which goes beyond predicting future outcomes by also suggesting actions to benefit from the predictions and showing the implications of each decision option.<ref>{{cite journal|author1=Stewart, Thomas. R. |author2=McMillan, Claude, Jr. |name-list-style=amp |title=Descriptive and Prescriptive Models for Judgment and Decision Making: Implications for Knowledge Engineering|journal=NATO AS1 Senes, Expert Judgment and Expert Systems|year=1987|volume=F35|pages=314–318}}</ref>
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