"Both Windows SharePoint Services Usage logging and Office SharePoint Usage Processing must be enabled to view usage reports. Please contact your administrator to ensure that these services are enabled."
You have to enable two options. Open “Central Administration” -> “Operation” and click on “Usage analysis processing” under “Logging and Reporting” and check “Enable Logging”. Then, move to “Shared Service Provider”, Click on “Usage reporting” under “Office SharePoint Usage Reporting” and check both options.
Credits for this solution goes to Meher Kanth's blog