Business Analytics

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Data and Statistics

Data are individual pieces of factual information recorded and used for
the purpose of analysis.

It is the raw information from which statistics are created.

Statistics are the results of data analysis - its interpretation and

presentation.

Some computation has taken place that provides some understanding of

what the data means.

Statistics are presented in the form of a table, chart, or graph.

 Analytics
Analytics is the data driven decision making
approach for a business problem.
 Business Analytics
Business analytics is a set of disciplines and technologies for solving business
problems using data analysis.

Analysing data to find out patterns that will be helpfulindevelopingstrategies.

Business analytics refers to:

• Taking in and processing historical business data
• Analysing that data to identify trends, patterns, and root causes
• Making data-driven business decisions based on those insights

“Change your strategy as trends change” - An excellent prescription for the successful business
Business Analytics is the process of transforming
data into insights to improve business decisions.

Data management, data visualization, predictive

modelling, data mining, forecasting simulation, and
optimization are some of the tools used to create
insights from data.
 Understand the story behind the data.

Future decisions Uncover new insights

 Decision Making

Decision making is simply the process of making a choice.

Managers’ responsibility:
To make strategic, tactical, or operational decisions.

Strategic decisions:
Involve higher-level issues concerned with the overall direction of the organization.
Define the organization’s overall goals and aspirations for the future.

Tactical decisions:
Concern how the organization should achieve the goals and objectives set by its strategy.
Are usually the responsibility of midlevel management.

Operational decisions:
Affect how the firm is run from day to day.
Are the domain of operations managers, who are the closest to the customer.
Decision making can be defined as the following process:

1.Identify and define the problem.

2.Determine the criteria that will be used to evaluate alternative solutions.
3.Determine the set of alternative solutions.
4.Evaluate the alternatives.
5.Choose an alternative.
Business analytics use cases
Marketing: Analytics to identify success and impact
Which customers are more likely to respond to an email campaign?

Human Resources: Analytics to find and share talent insights

What actually drives employee decisions regarding their career?

Sales: Analytics to optimize your sales

What is the critical moment that converts a lead to a sale?

Finance: Analytics to power predictive organizational budgets

How can you increase your profit margins?
 Descriptive Predictive Prescriptive
Analytics Analytics Analytics
What has happened what is going to
What should we do
in the past ?? happen in future.
Types of uses forecasting
use of optimization
Algorithm
Business techniques

Analytics
Summarizing raw data Predictive analysis Prescriptive Analysis is
to make it easily helps us in predicting used to give advices
understandable and the future course of and take actions to
interpretable by events and taking affect on possible
humans necessary measures outcomes
for the same
Descriptive analytics

Descriptive analytics is the analysis of historical data using two key methods –
data aggregation - summarize data from multiple sources and data mining -
which are used to uncover trends and patterns.

Descriptive analytics is concerned with representing what has happened in the

past. It is not used to draw inferences or make predictions about the future
from its findings

Descriptive analytics are often displayed using visual data representations like
line, bar and pie charts, reports and dashboards.

How can descriptive analytics help in the real world?

In a healthcare setting, for instance, say that an unusually high number of people are
admitted to the emergency room in a short period of time.

Descriptive analytics tells you that this is happening and provides real-time data with all
the corresponding statistics (date of occurrence, volume, patient details, etc.).
Examples of descriptive analytics

• Summarising past events such as sales and operations data or marketing

campaigns

• Social media usage and engagement data such as Instagram or Facebook likes

• Reporting general trends

• Collect and combine survey results

Predictive analytics

Predictive analytics is uses probabilities to make assessments of what could happen in the
future.

To make predictions, machine learning algorithms take existing data to solve problems and
identify opportunities for growth.

For example, organisations are using predictive analytics to prevent fraud by looking for
patterns in criminal behaviour, optimising their marketing campaigns by spotting
opportunities for cross selling and reducing risk by using past behaviours to predict which
customers are most likely to default on payments.

In hospital example, predictive analytics may forecast a sudden large increase in patients admitted in
the next several weeks. Based on patterns in the data, the illness is spreading at a rapid rate.
Examples of predictive analysis

The ways predictive analytics can be utilised to forecast possible events and trends across
industries and businesses is vast and varied.

The healthcare industry, as an example, is a key beneficiary of predictive analytics. In 2019,

RMIT University partnered with Digital Health Cooperative Research Centre to develop clinical
decision support software for aged care that will reduce emergency hospitalisations and
predict patient deterioration by interpreting historical data and developing new predictive
analytics techniques. The goal is that predictive analytics will allow aged-care providers,
residents and their families to better plan for the end of life.

•E-commerce – predicting customer preferences and recommending products to customers

based on past purchases and search history

•Sales – predicting the likelihood that customers will purchase another product or leave the
store

•Human resources – detecting if employees are thinking of quitting and then persuading
them to stay

•Healthcare – predicting staff and resource needs

What is Prescriptive Analytics?

Prescriptive analytics takes predictive data to the next level.

Now that you have an idea of what will likely happen in the future, what should you do?

It suggests various courses of action and outlines what the potential implications would be for each.

Back to our hospital example: now that you know the illness is spreading, the prescriptive analytics tool may
suggest that you increase the number of staff on hand to adequately treat the patients at entry level.

Examples of prescriptive analytics

•Manufacturing – improving equipment management, maintenance, price modelling, production and

storage

•Healthcare – improving patient care and healthcare administration by evaluating things such as rates
of readmission and the cost-effectiveness of procedures

•Insurance – assessing risk in regard to pricing and premium information for clients
Summary:
Both descriptive analytics and diagnostic analytics look to the past
to explain what happened and why it happened.

Predictive analytics and prescriptive analytics use historical data to

forecast what will happen in the future and what actions you can
take to affect those outcomes
Terminologies –

Data - Data are observations or measurements (unprocessed or processed) represented as text,

numbers, or multimedia.

Dataset – A dataset is a structured collection of data generally associated with a unique body of
work. Data collected for a particular study.

Database - A database is an organized collection of data stored as multiple datasets.

Data Warehousing - is process for collecting and managing data from varied sources to provide
meaningful business insights.

Data mining - is the process of analyzing dense volumes of data to find patterns, discover trends,
and gain insight into how that data can be used.
 Big Data

Big data is a combination of structured, semi structured and unstructured data

collected by organizations that can be mined for information

and used in machine learning projects, predictive modeling and other advanced
analytics applications.

Types of data - Example

•Structured data, such as transactions and financial records;

•Unstructured data, such as text, documents and multimedia files; and
•Semi structured data, such as web server logs and streaming data from sensors.
 Example of Big Data

Social Media

The statistic shows that 500+terabytes of new data get ingested into the databases of
social media site Facebook, every day. This data is mainly generated in terms of photo
and video uploads, message exchanges, putting comments etc.

The New York Stock Exchange is an example of Big Data that generates about one
terabyte of new trade data per day.
Big data is often characterized by the 6 V’s:

Data in doubt due to

inconsistency and
incompleteness
. Data dashboards are a type of _________ analytics.

a predictive b descriptive
.
c.prescriptive d decision
.
 Answer B

Descriptive analytics encompass the set of techniques

that describes what has happened in the past.
The extraction of information on the number of shipments, how much was included
in each shipment, the date each shipment was sent, and so on from the
manufacturing plant’s database exemplifies

a. spreadsheet models. b. data dashboards.

c. data mining. d. data queries.

 Answer D

A data query is a request for information with certain characteristics from

a database
A forecast that helps direct police officers to areas where
crimes are likely to occur based on past data is an example of

a. predictive analytics. b. decision analysis.

c. prescriptive analytics. d. descriptive analytics.

 Answer A
Predictive analytics consists of techniques that use models constructed
from past data to predict the future
Which of the following analytical techniques helps us arrive at
the best decision?

a. Predictive analytics b. Data mining

c. Prescriptive analytics d. Descriptive analytics

 Answer C
Prescriptive analytics indicate a best course of action to take; that is, the
output of a prescriptive model is a best decision
Which of the following sources of big data is not publicly
available?
a. Twitter
b. Weather data
c. Medical records
d. Sports records
 Answer C

While some sources of big data are publicly available (Twitter,

weather data, etc.), other sources contain private information.
Medical records, bank account information, and credit card
transactions, for example, are all highly confidential and must
be protected from computer hackers
A __________ decision involves higher-level issues
and is concerned with the overall direction of the
organization, defining the overarching goals and
aspirations for the organization’s future.

a. strategic
b. tactical
c. intuitive
d. operational
 Answer A

A strategic decision involves higher-level issues and is concerned

with the overall direction of the organization, defining the
overarching goals and aspirations for the organization’s future.
In order to manage an organization’s human resource
activities, such as hiring employees, tracking, and
influencing employee retention, HR personnel use

a. descriptive and b. descriptive and

predictive analytics. prescriptive analytics.
c. predictive and d. predictive analytics.
prescriptive analytics.
 Answer A

The HR analytics team uses descriptive and predictive analytics to

support employee hiring and to track and influence retention
Business Analysis Framework
A business analysis framework is a conceptual plan that describes all of the key
requirements for running a business.

It is based on the use of knowledge, the various techniques that make up the process, and
also critical analysis.

The main purpose of framework is to reference model that can use to understand your
processes and build a model or structure that ensures that the work is done efficiently and
is constantly monitored.
Applications
Thank you!
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