HOLY NAME UNIVERSITY

College of Engineering and Computer Studies

ga
Tagbilaran City, Bohol

f
i x
gy
Introduction to Business Analytics
FBA101

&
Introduction to
Business Analytics
(Part II)
FBA101

Fundamentals of Business Analytics

Analytical Models
Gartner Analytic Ascendancy Model

DIFFICULTY
b * Gartner

Page 1 of 13
Scope
Use data to understand past and current business a
performance and make informed decisions

Examine historical data, detect patterns and

relationshipsin these data and extrapolate
relationships forward in time to predict the future

identify the best alternativesto minimize or

maximize some objective

Tools
Spreadsheet (MS Excel)
Database Queries and Analysis (SQL)
Data Visualization
Dashboards

Page 2 of 13
 Examples of Data Sources
Internal
Annual reports
Accounting audits
Financial analysis
Operations Management Performance
Human Resource Measurements

External
Economic Trends 4
Marketing Research

New Developments: Web behavior — social media — mobile - |OT

Page views, visitor's country, time of view, length of time, products searched for
and viewed, products purchased, etc.

Oe

Data that can be measured

with
fuerbers,
such as duration or speed

2 = ae
BN NT Ordinal
Whole numbers that can! = Numbersthat can be broken Osta used fornaming —-— Data used to describe Re onder
be broken down, such as Gown, such a5 height or variables, such as hai colou’ of values,
such as | = hagpy, 2
a nurber of dens weyt = reutal,
3 = unhaogy
A

Numbers with known diflerences Numbers that have measurableintervals

between variables, such as time where difference can be determinedsuch
as height
or waht

Page 3 of 13
 Measurement Scales

» Categorical (nominal) data - sorted into

categories according to specified
characteristics.

» Ordinal data - can be ordered or ranked

according to some relationship to one another.

» Interval data - ordinal but have constant

differences between observations and have
arbitrary Zero points.

» Ratio data - continuous and have a natural

zero v

, __ ih

oa
~
-

| Parcheve Orders
||
|

| '

|
|
? b |
1 Sepia _
4 any Frestenaes
Crmg 01o_ tam1 Athos
am aetton_ten«86§ Ct1 Quy
MS
evi RIMote_AP Tame x oteooCite «wm
Ard ot
5 Mam Seer ayo Aes $i OS Ome x om = ae
6 Fes-Tie Aaroapace i x Po
1 FeshTie Aaroapace Ce) % wet et
4 Swape he, my — Cth ft TS Ow x om =m
$ FaseTh Aanapace Maye] Cate $I MS Oe x O21 = ae
Nt Swepe be. my eto 6} STD x a | ie
11 Qwrable Poodacts i es i & re al
12 FamT Aanapace Ag AR Oy $ if ims 3160 x ee
1) Fash Tle Aaroapace mt = Site § IM OMS OEM x rt a
14 Seeipe be. mgt = SD Pied Catioh = § LMS NH % o7tt= caes
1$ ghey Festeren magia = acre Corree $1 OS OW x om | (at

Page 4 of 13
 '
—
wh
oh

eti
oso

Categorical
ge
rr
Fast-Tie Aerospace
a
a
if ‘Durrable Products
12 Fast-Tie Aerospace
13 Fast-Tle Aerospace
14 Steelpin inc.
15 Hulkey Fasteners

@
Order No.
Augi1001
Aug 11002
Aug11003
Aug 11004
Aug1100$
Aug 11006
Awg11007
Aug 11008
Aug 11009
Augi1010
Augi1011
Aug1012

Categorical

Page 5 of 13
10,000
23,000
21,500
17,500 Cost per order
22,500 82,875.00
eww
wwvwewewuvevewewuv

4,250 42,500.00
100 24,150.00
1,300 22,575.00
22,500 19,260.00
18,100 23,625.00
5,600 15,937.50
9,000.00
3,185.00
23,625.00
19,910.00
7,000.00

Page 6 of 13
 @
Order Date
OB/0S/11
08/08/11
OBr10r11
oeris/11
06/20/11
08/20/11
0a/28/11
06/25/11
08/25/11
06/25/11
0ar25/11
06/25/11

Arrival Date
08/1411
08/14/11
08/15/11
08/22/11
08/31/11
08/26/11
09/01/11
08/28/11
09/04/11
09/02/11
09/05/11
06/29/11

Page 7 of 13
 Problem-Solving with Analytics
1 Recognize
a problem. AP

—- -
— 3. Structure the problem. —

ne Ls
"5. Interpret results and make decision. =
6. Implement the solution. —

Recognize a Problem

Problems exist when there is a gap between what is

happening and what we think should be
happening.

» For example, costs are too high compared with

competitors.
Page 8 of 13
Define the Problem

» Clearly defining the problem is not a trivial task.

» Complexity increases when the following occur:

- large number of courses of action
- the problem belongs to a group and not an_ individual
- competing objectives
- external groups are affected
- problem owner and problem solver are not the
same person
- time limitations exist

Structure the Problem

» Stating goals and objectives

» Characterizing the possible decisions
» Identifying any constraints or restrictions

Page 9 of 13
Analyze the Problem

» Analytics plays a major role.

» Analysis involves some sort of experimentation or

solution process, such as evaluating different
scenarios, analyzing risks associated with various
decision alternatives, finding a solution that meets
certain goals, or determining an optimal
solution.

Interpret Results and Make a Decision

» What do the results found by the model mean for .

the application?

» Models cannot capture every detail of the real

problem. Managers must understand the
limitations of models and their underlying
assumptions and often incorporate judgment into
making a decision.
Page 10 of 13
Implement the Solution

» Translate the results of the model back to the real

world.

» Requires providing adequate resources,

motivating employees, eliminating resistance to
change, modifying organizational policies, and
developing trust.

Ethical Implications

Feeley
Data Privacy Act
Vee lealilis
of 2012
orale mur ts

Page 11 of 13
 Awareness, Disclosure and Privacy

V
* Disclosure of customer data is!
prevalent in day-to-day business
and the internet via social media
and searches.
* Most individuals are unaware
that their digital traces can be
used to profile them without
their consent and violate their
privacy by modeling their
preferences, locations, and
decisions.

Data Ownership and Control

* Since data traces can be freely

obtained in the public domain,
data ownership and control is a
gray area.
* For example if you post your
preferences in social media, or
perform a search on Google,
those information stay on the
servers of these providers but
pertain to your activities.

Page 12 of 13
Discrimination and Self-Determination

* Data is often used by institutions to

profile and segment people based
on their demographics and
behavior.
* This profiling and segmentation can
be used to determine marketing
messages, access to products and
services, and interaction.
* From a certain perspective this is
tantamount to auto-discrimination
which can violate basic human
rights.

Liabilities in Algorithmic Decision Making

* Once decisions are automated
based on algorithms, human ingut
is minimized but the consequences
of those decisions remain. If any
loss or liability results from the
outcomes of these automated
decisions, it can be a gray area on
who is accountable.
* The pervasive use of analytics to
drive decisions can also have
massive consequences with little
regulation or certification on the
individuals implementing analytics
and the responsible use of data.

Page 13 of 13