UNIT-01: INTRODUCTION (EVOLUTION OF BUSINESS ANALYTICS):

1] Business Analytics Definition:

Business Analytics is the process by which businesses use statistical methods and technologies
for analysing historical data in order to gain new insight and improve strategic decision-
making.

As described in the Harvard Business, business analytics is “the use of math and
statistics to derive meaning from data in order to make better business decisions.”

1.A} Levels of Analytics Maturity.

An analytics maturity model is a sequence of steps or stages that represent the evolution of the
company in its ability to manage its internal and external data and use this data to inform
business decisions

Levels (Stages) of analytics maturity:

So, the path that companies follow in their analytical development can be broken down into 4
stages:
1. Descriptive analytics lets us know what happened, gathering and visualizing historical
data.
2. Diagnostic analytics identifies patterns and dependencies in available data,
explaining why something happened.
 3. Predictive analytics creates probable forecasts of what will happen in the future, using
machine learning techniques to operate big data volumes.
4. Prescriptive analytics provides optimization options, decision support, and insights
on how to get the desired result.

2} Evolution/Emergence of Business Analytics:

Today, every business irrespective of its size is on a lookout for different ways to make sense
of the vast amount of raw data available. This is because business analytics has been
transforming the way companies function for over a decade now.
Now, let us take a step back and analyse how did this all start? Why has this field gained
popularity just recently? Have the way businesses use data evolved over the years? What
did business analytics look like 20 years ago? You will have a brief idea of how business
analytics has evolved over the years.

Now, let’s get started with the history of business analytics with the help of a timeline, starting
from the 1800s to 2020.
How Business Analytics Has Evolved Over the Years
1. BA In the 1800s (1801-1899) The need to stay ahead:
During this time, Mr Richard Miller Devens described in his book how Sir Henry
Furnese, a banker, was always one step ahead by actively gathering information
and acting on it before any of his competitors. This makes it clear that
professionals such as Sir Furnese relied more on data and empirical evidence,
rather than gut instinct.

2. BA In the late 1800s (1890-1899 ) The Advent of Scientific Management:

During this time, Frederick Taylor introduced the first-ever system of business
analytics in the United States of America, and he called it scientific management.
The purpose of this system was to analyse the production techniques and labourers
body movements to identify greater efficiencies.

3. BA In the early 1900s (1900- 1909) The Transformation of the Manufacturing

Industry:
Frederick Taylor’s scientific management system inspired Henry Ford, who hired
Taylor as his consultant. Ford was willing to measure the time each component of
his Ford Model T took to complete on his assembly line. This analysis transformed
his work and the manufacturing industry across the globe.

4. BA In the 1950s (1950-1959) The first hard drive disk by IBM:

Computers weren’t accessible in the early 1900s but had a massive demand during
World War II. As they were still rudimentary, punch cards or tapes were used to
 store information. However, in 1956, the tech giant, IBM invented the first hard
disk drive. This allowed users to save a vast amount of data with better flexibility.

5. BA In the late 1900s (1980-1999)The Emergence of Business Intelligence:

Owing to the lower prices for storage space and better databases, the next
generation of business intelligence solutions was all set to step in. By now, there
was a considerable amount of data available but not a centralized place to store it.
To address this problem.

6. BA In the 21st Century:

Big data and cloud came along, real time analytics, automated analytics, ERP
(Enterprise Resource Planning) systems it handles day-to-day work of
organization, data warehouses.

3} Motivation for Studying Business Analytics:

1. Business analytics has a wide range of application and usages. It can be used for
descriptive analysis in which data is utilized to understand past and present situation,
predictive analytics, which show us what could happen, and finally, prescriptive
analytics, which inform us what should happen in the future.

For example, business analytics is used to determine pricing of various products in a

departmental store based past and present set of information.

2. Business analytics is a methodology or tool to make a sound commercial decision.

Hence it impacts functioning of the whole organization. Therefore, business analytics
can help improve profitability of the business, increase market share and revenue and
provide better return to a shareholder.

3. Facilitates better understanding of available primary and secondary data, which again
affect operational efficiency of several departments.

4. Provides a competitive advantage to companies. In this digital age flow of information

is almost equal to all the players. It is how this information is utilized makes the
company competitive.

5. Converts available data into valuable information. This information can be presented
in any required format, comfortable to the decision maker.

4} Making the Best use of Business Analytics:

Specialists, with the best of their experience & expertise, believe that businesses can make
business analytics useful, here are what business analytics is useful for.
1] Start a Business: Based on all the accurate reports & forecasts of any industry, you can
actually start a business in the most prepared manner, & u have the best chance of success.
2] Grow your Business: BA is the best & the safest way to grow your business & take away
all the risks. It gives you the best chance of to succeed.
3] Analyse Data: Tonnes of data is generated, but there aren’t many methods to analyse this
data efficiently. BA is the best way to process this data to get what information you need.
4] Create Business Strategies: The best business analytics tools will help you make business
strategies through prescriptive analytics.
5] Stay Updated to Business Trends: Trends change at a drop of a hat, but modern business
analytics tools help you stay updated on the changing trends & implement them into your
business.

5} Advantages of implementing BA in your organization

Following are the benefits of Business Analytics:
1. Accurately transferring information
2. Consequent improvement in efficiency
3. Help portray Future Challenges
4. Make Strategic decisions
5. As a perfect blend of data science and analytics
6. Reduction in Costs
7. Improved Decisions
8. Share information with a larger audience
9. Ease in Sharing information with stakeholders

6} Challenges of Business Analytics:

Following are the challenges in implementing business analytics in an organization:
1. Lack of technical skills in employees
2. Data Security and Maintenance
3. Integrity of Data
4. Delivering relevant information in the given time
5. Inability to address complex issues
6. Costs involved in implementing BA
7. Investment of staff time in implementation of BA
8. Lack of a proper strategy to implement BA
7} Managing a Business Analytics Project:
What does a business analytics project manager, to manage business analytics project in
business? Here it is discussed in brief as follows:
1] Delivery & Execution Orientation (Executor):
Both managers have a desire for meeting the deadlines of the project. Unlike traditional
managers who have a strong bias for planning, the business analytics project managers have a
high execution bias. In-other words, they are go-getters.
2] Value in use & value of learning focus (evaluator):
Gone are the days when one sticking to the original plan was considered great. A need to have
fresh learning requires regular changes in the form of a loop. It prevents from investing a lot
of time, money & effort on developing the ‘ideal plan’.
Here, ‘value in use’ refers to a parameter that measures the extent to which an asset
provides benefits to a party when used in a particular manner. It can be assessed in the form of
four dimensions including social, emotional, quality, & monetary values.
3] Gainer of commitment at work (commitment gainer):
The business analytics managers work to gain commitment of the stakeholders in the project.
This is often done by engaging them in various activities as much as possible as long as
possible.
The engagement helps the company align business processes with the analytics models.
Decision-makers handling such projects need to be technically, analytically sound.
4] Intelligent experimentation believer & promoter (experimenter):
Analytics managers considers experimentation as basis for learning. This experimentation
involves a four-step process, namely designing, building, running, & analysing the
experiments.
Here, intelligent experiments mean that the experiments must have clear goals & objectives
& measurable hypothesis & should follow standard treatment control procedures.
5] Emphasizing smart use of information technology (tech savvy):
Managers who work on analytics project believe in & leverage the potential of IT. The reason
is that a smart use of IT has the capability to facilitate recurring & faster analysis of raw
business data. This, in turn, would improve the efficiency of experimentation.
8} Analytics in Different Domains of Business:

{A domain is nothing but the area where the business analyst works in the industry}.

Today, analytics has become the backbone of a majority of business function.

 In financial management, it has found application in crucial areas such as credit risk
scoring & financial engineering. Bank & financial institutions expecting custom-designed
algorithms in loan forms in order to avoid risk.

 In the retail industry, analytics has all but changed the landscape of customer targeting &
product promotions. Pioneered by the e-commerce giants such as Amazon & Flipkart,
marketing analytics applied cluster analysis to predict customer buying behaviour patterns
to promote products and sales.

 One major contribution of analytics in marketing analytics has been targeting customer
with products based on their past buying behaviour. Example: if a customer is observed to
do some repeat purchasing of any product in Amazon, then they receive suggestions in
their registered page that it is about time for them to purchase the product again.

 In the Supply chain domain, the application of analytics is not new. Operation managers
were already using linear programming & other scheduling techniques to optimize
logistic functions of business. Like Analytical Hierarchical processing (AHP) &
computer-based simulation to predict future demand & supply trends.

 In HRM the scope for the application of analytics is immense. It helps HR managers
predict future attrition of employees, understand which recruitment or training process is
better than other alternatives for organization success.

 In telecom for simpler & faster processing of only relevant data, telecom need advanced
analytics driven data solution that will help them to achieve timely & accurate insights
using data mining & predictive analytics.

 In Consumer-Packaged Goods (CPG) or FMCG that are sold quickly & at relatively low
cast. BA offering unparalleled opportunities to empower every person in the organisation
to make smarter, faster & more accurate decisions.

 Powerful analytical tools for changing healthcare include data, statistical methods &
analyses, & quantitative approaches to decision-making about patients & their care. These
analytical tools are at the heart of ‘‘evidence-based medicine’’.

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