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Big Data & Business Analytics

Module (03) – Business Analytics Types
Big Data & Business Analytics
Course Name Module
Module 3: Name
Business Analytics Types
Module 02
Module 3 Learning Objectives
Module Objectives:
Understand the difference between the four data analysis types (descriptive, diagnostic,
predictive, prescriptive)
Provide real-case examples for each analytics type
Introduction to Rapidminer

What to Study for Exam:

Module 3 Lecture Notes (with emphasis on above topics)

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Big Data & Business Analytics
Course Name Module
Module 3: Name
Business Analytics Types
Module 02
Module 3 1st What is Big Data Analytics
• Big data analytics is the process of using software to uncover trends,
patterns, correlations or other useful insights in those large stores of data.

• Data analytics is not new. It has been around for decades in the form of
business intelligence and data mining software.

• Over the years, that software has improved to handle much larger data
volumes, run complex queries more quickly and perform more advanced
algorithms (for example artificial neural networks/ deep learning).

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Module 3 2nd Types of Business Analytics
Business analytics tools can be classified into four categories:

Descriptive analytics:
the use of data to understand past and current business performance and make
informed decisions. They create simple reports and visualizations that show what happened. These
are the least advanced analytics tools.

Diagnostic Analytics:
Diagnostic tools explain why something happened. More advanced than descriptive reporting tools,
but no prediction of upcoming future, for example no prediction of future sales amounts, trends,
customer base expansion, etc.

Predictive analytics:
predict the future by examining historical data to detect patterns or relationships in these data, and
then extrapolating these relationships through mathematical modelling forward in upcoming time.

Prescriptive analytics:
identify the best alternatives to minimize or maximize some objective function; for example minimize
cost, maximize customer base, etc. (optimization problem). A few solutions on the market today offer
true prescriptive capabilities.
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Module 3 2nd Types of Business Analytics

Source: https://www.datamation.com/big-data/what-is-big-data-analytics/
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Module 3 2nd Types of Business Analytics

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Module Business Analytics Types
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Module 3 2nd Types of Business Analytics

Most department stores clear seasonal inventory by reducing prices.

Key question: When to reduce the price and by how much to maximize revenue?

Potential applications of analytics:

Descriptive analytics: examine historical data for similar products (prices,
units sold, advertising, …)
Predictive analytics: predict sales based on price
Prescriptive analytics: find the best sets of pricing and advertising to
maximize sales revenue

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Big Data & Business Analytics Module 3: Name
Module Business Analytics Types
Course Name
Module 02
Module 3 3rd Descriptive Analytics Examples
Descriptive Analytics
• Descriptive analytics uses simple maths and statistical tools, such as
arithmetic, averages and per cent changes, rather than the complex maths
necessary for predictive and prescriptive analytics.
• Visual tools such as line graphs and pie and bar charts are used to present
findings
• Examples include:
o Summarising past events such as sales and operations data or marketing
campaigns
o Social media usage and engagement data such as Instagram or Facebook likes
o Website visits analysis
Source: https://studyonline.unsw.edu.au/blog/descriptive-predictive-prescriptive-analytics

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Module 3 4th Predictive Analytics Examples
Predictive Analytics is based on probabilities using a variety of techniques such
as:
o Statistical modelling : mathematical relationships between variables to
predict outcomes also known as regression, and also correlations
o Machine learning algorithms : classification, regression, clustering techniques
o Examples include:
o E-commerce – predicting customer preferences and recommending products to
customers based on past purchases and search history
o Sales – predicting the sales revenues for coming years
o IT security – identifying possible security frauds
o Healthcare –diagnosing a disease

Source: https://studyonline.unsw.edu.au/blog/descriptive-predictive-prescriptive-analytics
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Module 3 5th Prescriptive Analytics Examples
Prescriptive Analytics anticipates what, when and, importantly, why something
might happen.
After considering the possible implications of each decision option,
recommendations can then be made in regard to which decisions will best take
advantage of future opportunities or mitigate future risks (optimization).
Source: https://studyonline.unsw.edu.au/blog/descriptive-predictive-prescriptive-analytics

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Module Business Analytics Types
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Module 3 5th Prescriptive Analytics Examples
Prescriptive Analytics Examples include:
o Oil and manufacturing – tracking fluctuating prices
o Manufacturing – improving equipment management, maintenance,
production and storage
o Healthcare – improving patient care and healthcare administration by
evaluating things such as rates of re-admission and the cost-effectiveness of
procedures
o Insurance – assessing risk in regard to pricing and premium information for
clients
o Pharmaceutical research – identifying the best testing and patient groups for
clinical trials.
Source: https://studyonline.unsw.edu.au/blog/descriptive-predictive-prescriptive-analytics

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Module 3 6th Big Data Analytics European Union Survey
A survey has been
undertaken by the
European Commission in
2016 to uncover 103
governmental enterprises in
the European Union with
the aim to examine their big
data analytics activities.
Sample of the enterprises
are shown in the figure.
Results are in the following
slides.

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Module Business Analytics Types
Course Name
Module 02
Module 3 6th Big Data Analytics European Union Survey

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Big Data & Business Analytics Module 3: Name
Module Business Analytics Types
Course Name
Module 02
Module 3 6th Big Data Analytics European Union Survey

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Course Name Module
Module 3: Name
Business Analytics Types
Module 02
Module 3 7th Rapid Miner Studio Demos/Videos

Rapidminer Demos Repository

https://academy.rapidminer.com/learning-paths/get-started-with-rapidminer-and-
machine-learning
o Introduction to Rapidminer Studio
(How to create a process and add a ‘Retrieve’ Object to import data from an excel sheet)
https://academy.rapidminer.com/learn/video/rapidminer-studio-gui-intro
o Data visualization in Rapidminer
https://academy.rapidminer.com/learn/video/visualizing-data-in-rapidminer
o Import data from excel or csv file in Rapidminer
https://academy.rapidminer.com/learn/video/data-loading-via-a-process

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Module 3 Questions

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Module 3

 Module Completed

Module 03