BIG DATA
and distance traveled. Owners who install
3Vs model by Laney
● Volume
● Variety
● Velocity of data
“datasets, which could not be captured,
managed, and processed by general
computers within an acceptable scope”.
McKinsey Global Institute – “datasets
whose size is beyond the ability of typical
database software tools to capture, store,
manage, and analyze”.
International Data Corporation (IDC ) “big
data technologies as new generation of
technologies and architectures, designed to
economically extract value from very large
volumes of a wide variety of data, by
enabling high-velocity capture, discovery,
and/or analysis”.
Huge size of unstructured data produced by
high-performance heterogenous group of
applications that spans from social network
to scientific computing applications.
The dataset range from a hundred
gigabytes to zetabytes that is beyond the
capacity of existing data management tools
to capture, store, manage and analyze.
Examples of Big Data
The following are summary examples of
how Big Data is being utilized: “Instead of
‘find my iPhone,’ some auto insurance
companies are offering a service that may
enable parents to ‘find my teenager.’
Progressive Insurance, for example, offers
the Snapshot, a tracking device that reports
on a car’s location, acceleration, braking,
the device can get a 10 to 15 percent
discount on their policy. Privacy activists,
however, fear the technology is ripe for
abuse.”
DIMENSIONS OF BIG DATA
➔ Volume: Magnitude of the data that
is being generated and collected.
➔ Velocity: Rate of the generation of
data. Big data should be processed
and analyzed in real-or-near-time to
make informed decisions.
➔ Variety: Refers to different types of
data being generated and captured.
They extend beyond structured data
and fall under the categories of
semi-structured and unstructured
data.
ADDED Dimensions of Big DATA
➔ Veracity: unreliability associated with
the data sources.
◆ SENTIMENT ANALYSIS
using social media
➔ Variability: Inconsistency in the big
data velocity leads to variation in
flow rate of data.
➔ Low-Value density: Data in its
original form is unusable. Data is
analyzed to discover very high
value. Ex. logs from website cannot
be used in its initial form to obtain
business value. It must be analyzed
to predict the customer behavior.
How to Measure Big Data and What’s a
BYTE?
★ A byte = one character, or a grain of
sand
★ A kilobyte = a sentence, or a couple
of pinches of sand •
★ A megabyte = a 20-slide PowerPoint
show, a small book, or a tablespoon
of sand
★ A gigabyte = 10 yards of books on a
shelf, or a shoebox full of sand •
★ A terabyte = 300 hours of good-
quality video, a tenth of the Library
of Congress, or a playground
sandbox •
★ A petabyte = 350,000 digital
pictures, or a mile-long stretch of
beach •
★ An exabyte = half the information
generated worldwide in 1999, or a
beach stretching from Maine to
North Carolina •
★ A zettabyte = unimaginable, or a
beach as big as all the coastlines in
the world
SIX STEPS
1. Ask - the analysts needed to define
what the project would look like and
what would qualify as a successful
result. These were the kinds of
questions they asked:
2. Solid Preparation - The group built
a timeline of three months and
decided how they wanted to relay
their progress to interested parties.
3. Process - The group sent the
survey out. The data analysts also
made sure employees understood
how their data would be collected,
stored, managed, and protected.
4. Analyze - From the completed
surveys, the data analysts
discovered that an employee’s
experience with certain processes
was a key indicator of overall job
satisfaction.
5. Share - This process gave
managers an opportunity to
communicate the results with the
right context. As a result, they could
have productive team conversations
about the next steps to improve
employee engagement.
6. Act - The last stage of the process
for the team of analysts was to work
with leaders within their company
and decide how best to implement
changes and take actions based on
the findings.
DECISION MODELS
➔ An abstraction or representation of a
real system, idea, or object
➔ Captures the most important
features
➔ Can be a written or verbal
description, a visual display, a
mathematical formula, or a
spreadsheet representation
Three Forms of a Model
The sales of a new product, such as a first-
generation iPad or 3D television, often
follow a common pattern.
● Sales might grow at an increasing
rate over time as positive customer
feedback spreads. (See the S-
shaped curve on the following slide.)
● A mathematical model of the S-
curve can be identified; for example,
S = aebect, where S is sales, t is
 time, e is the base of natural
logarithms, and a, b, and c are
constants.
DECISION MODELS
A decision model is a model used to
understand, analyze, or facilitate decision-
making.
Types of model input
❖ data
❖ uncontrollable variables
❖ decision variables (controllable)
Types of model output
❖ performance measures
❖ behavioral measures
A Sales-Promotion Model
In the grocery industry, managers typically
need to know how best to use pricing,
coupons, and advertising strategies to
influence sales.
Using Business Analytics, a grocer can
develop a model that predicts sales using
price, coupons, and advertising.
Descriptive Decision Models
★ What happened?
★ What is happening?
★ Well defined business problems
and opportunities
➔ Simply tell “what is” and describe
relationships
➔ Do not tell managers what to do
◆ Mathematical models for
Total Cost
◆ A Break-even Decision
Model
◆ A Linear Prediction Model
◆ A Nonlinear Prediction Model
Predictive Decision Models
★ What will happen?
★ Why will it happen?
★ Accurate projections of the future
states and conditions
➔ Predictive Decision Models often
incorporate uncertainty to help
managers analyze risk.
➔ Aim to predict what will happen in
the future.
➔ Uncertainty is imperfect knowledge
of what will happen in the future.
➔ Risk is associated with the
consequences of what actually
happens.
Prescriptive Decision Models
★ What should I do?
★ Why should I do it?
★ Best possible business decisions
and transactions
➔ Prescriptive Decision Models help
decision-makers identify the best
solution.
➔ Optimization - finding values of
decision variables that minimize (or
maximize) something such as cost
(or profit).
➔ Objective function - the equation
that minimizes (or maximizes) the
quantity of interest.
➔ Constraints - limitations or
restrictions.
➔ Optimal solution - values of the
decision variables at the minimum
(or maximum) point.
A Pricing Model
A firm wishes to determine the best pricing
for one of its products in order to maximize
revenue.
Analysts determined the following model:
Sales = -2.9485(price) + 3240.9
Total revenue = (price)(sales)
Identify the price that maximizes total
revenue, subject to any constraints that
might exist.
❖ Deterministic prescriptive models
have inputs that are known with
certainty.
❖ Stochastic prescriptive models have
one or more inputs that are not
known with certainty.
❖ Algorithms are systematic
procedures used to find optimal
solutions to decision models.
❖ Search algorithms are used for
complex problems to find a good
solution without guaranteeing an
optimal solution.
PROBLEM-SOLVING AND DECISION
MAKING
1. Recognizing the 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
competitors.
2. Defining the Problem
- Clearly defining the problem
is not a trivial task.
- Complexity increases when
the following occur:
- - large number of courses of
action
- - several competing
objectives
- - external groups are affected
- - problem owner and problem
solver are not the same
person
- - time constraints exist
3. Structuring the Problem
- Stating goals and objectives
- Characterizing the possible
decisions
- Identifying any constraints or
restrictions
4. Analyzing the Problem
- Identifying and applying
appropriate Business
Analytics techniques
- Typically involves
experimentation, statistical
analysis, or a solution
process
- Much of this course is
devoted to learning BA
techniques for use in Step 4.
5. Interpreting Results and Making a
Decision
- Managers interpret the
results from the analysis
phase.
- Incorporate subjective
judgment as needed.
- Understand limitations and
model assumptions.
with - Make a decision utilizing the
above information.
6. Implementing the Solution
- Translate the results of the
model back to the real world.
- Make the solution work in the
organization by providing
adequate training and
resources.
DESCRIPTIVE ANALYTICS
 - “Analytics are a subset of …
business intelligence: a set of
technologies and processes that use
data to understand business
performance … The questions that
analytics can answer represent the
higher-value and more proactive
end of this spectrum.” – Tom
Davenport, Competing on Analytics
FOUR CATEGORIES OF ANALYTICS
ANALYTICS: THE THREE LEVELS
● Descriptive Analytics: Classic Bl
○ Quantitative Assessment of
Past Business Results
○ Statistics, Exploratory Data
Analysis, Visualization
● Predictive Analytics
○ Quantitative Methods to
Predict New Outcomes
○ Forecasting, Prediction,
Classification, Association
● Prescriptive Analytics
○ Quantitative Methods to
Make Better Decisions
○ Decision Trees, Monte Carlo
Simulation, Optimization
CAN THIS HELP IN YOUR WORK?
➔ Optimization models can deliver
huge cost savings
➔ Simulation/risk analysis models can
help avoid disaster
➔ But very few business analysts have
the skills to do this
➔ If you can do this, your value to your
company will rise. Some analytic
models address operations, others
address strategic decisions
◆ Ex. whether to build a new
plant, and where to locate it
➔ Be prepared to present your work to
senior management
What is Descriptive Analytics
EXCEL
★ Key task: Data access/shaping –
Power Query does this
★ Excel + Power Pivot data model
holds Past Business Results
★ Pivot charts, Power View, Power BI
for data visualization
★ Formulas: Sum, Count, Average,
Min, Max, Var, StdDev
❖ Descriptive Analytics - The
backbone of business intelligence,
descriptive analytics answers the
fundamental questions of when,
where, what and how many. It
provides information about your
customers and your business to help
measure KPIs.
❖ Diagnostic Analytics - Diagnostic
analytics look at what already
happened to find out why something
occurred. It digs into the data to
better explain anomalies and find
hidden causal relationships.
❖ Predictive Analytics - Perhaps the
most common of the four, predictive
analytics understands correlations,
trends, and causation. It finds out
what will happen in the future.
❖ Prescriptive Analytics - Taking
predictive analysis, a step further is
prescriptive analytics, which informs
a business about what actions to
take. With the help of artificial
intelligence (AI), it tests variables to
provide the best course of action
before a company commits to
making a decision.
❖
 ➢ Descriptive analytics is the process
of parsing historical data to better
understand the changes that have
occurred in a business.
➢ Using a range of historical data and
benchmarking, decision-makers
obtain a holistic view of performance
and trends on which to base
business strategy.
➢ Descriptive analytics can help to
identify the areas of strength and
weakness in an organization.
➢ Descriptive analytics is now being
used in conjunction with newer
analytics, such as predictive and
prescriptive analytics.
➢ In its simplest form, descriptive
analytics answers the question,
"What happened?"
➢ Descriptive Analytics, the
conventional form of Business
Intelligence and data analysis, seeks
to provide a depiction or “summary
view” of facts and figures in an
understandable format, to either
inform or prepare data for further
analysis.
➢ It uses two primary techniques,
namely data aggregation and data
mining to report past events. It
presents past data in an easily
digestible format for the benefit of a
wide business audience.
How does descriptive analytics work?
➔ Data aggregation and data mining
are two techniques used in
descriptive analytics to discover
historical data.
➔ Data is first gathered and sorted by
data aggregation in order to make
the datasets more manageable for
analysts.
➔ Data mining describes the next step
of the analysis and involves a
search of the data to identify
patterns and meaning. Identified
patterns are analyzed to discover
the specific ways that learners
interact with the learning content and
within the learning environment.
EXAMPLES
● Summarizing past events such as
regional sales, customer attrition, or
success of marketing campaigns.
● Tabulation of social metrics such as
Facebook likes, Tweets, or ollowers.
● Reporting of general trends like hot
travel destinations or news trends.
Examples of descriptive analytics exist in
every aspect of the business, from finance
to production and sales, including the
following.
● Business reports of revenue and
expenses, cash flow, accounts
receivable and accounts payable,
inventory and production.
● Financial metric and other business
KPIs are examples of descriptive
analytics. These include metrics that
assess the health and value of a
business, such as the price to
earnings ratio, current ratio and
return on invested capital.
● Social media engagement:
Descriptive analytics generates
metrics that help determine the
return on social media initiatives,
such as growth in followers,
engagement rates and revenue
attributable to specific social media
platforms.
● Surveys: Descriptive analytics
produces summaries of internal and
 external survey results, such as a
net promoter score.
5 Steps in Descriptive Analytics
1. Business Metrics and KPIs
2. Data Collection and Aggregation
3. Data Extraction
4. Data Analysis
5. Data Presentation
How is Descriptive Analytics Used?
● Reports: The key financial metrics
included in a company’s financial
statements are generated by
descriptive analytics. Other common
reports also use descriptive analytics
to highlight aspects of business
performance.
● Visualizations: Displaying metrics
in charts and other graphic
representations can more efficiently
communicate their impact to a wider
audience.
● Dashboards: Executives,
managers, and other employees
may use dashboards to track
progress and manage their daily
workload. Dashboards present a
selection of KPIs and other
important information tailored to the
needs of each person.
Why is it important?
➔ Descriptive analytics helps everyone
in the company make more informed
decisions that guide the business in
the right direction.
➔ It reveals patterns that might
otherwise be hidden in raw data,
enabling managers to see at a
glance how well the business is
performing and where
improvements may be needed.
➔ Descriptive analytics also helps
businesses communicate
information among departments and
to people outside the company.
➔ Potential lenders and investors, for
example, may want to scrutinize
revenue, profit, cash flow, and debt
metrics before they put money into a
business.
What does it Tell Us?
★ Current business performance
★ Historical trends
★ Strengths and weaknesses
DRAWBACKS OF DESCRIPTIVE
ANALYTICS
- The primary drawback of descriptive
analytics is that it simply reports
what has happened, without
exploring the causes or attempting
to predict what will happen next. It’s
also generally limited to relatively
simple analyses that examine the
relationships between two or three
variables.
TYPES
❖ Measures of Frequency:
➢ Count, Percent, Frequency
➢ Shows how often something
occurs
➢ Use this when you want to
show how often a response
is given
❖ Measures of Central Tendency
➢ Mean, Median, and Mode
➢ Locates the distribution by
various points
➢ Use this when you want to
show how an average or
most commonly indicated
response
 ❖ Measures of Dispersion
Variation
➢ Range, Variance, Standard
Deviation
➢ Identifies the spread of
scores by stating intervals
➢ Range = High/Low points
➢ Variance or Standard
Deviation = difference
between observed score and
mean
➢ Use this when you want to
show how "spread out" the
data are. It is helpful to know
when your data are so
spread out that it affects the
mean
❖ Measures of Position
➢ Percentile Ranks, Quartile
Ranks
➢ Describes how scores fall in
relation to one another.
Relies on standardized
scores
❖ Use this when you need to
compare scores to a normalized
score (e.g., a national norm)
or • Data and technology should be made
available at every corner of an enterprise to
develop and nurture a widespread data-
driven culture.
• If data and analytics are aligned with
overall business goals, then day-to-day
business decisions will be more driven by
data-driven insights.
• As people drive businesses, the
manpower engaged in Data Analytics must
be competent and adequately trained to
support enterprise goals.
• A centrally managed team must lead the
analytics production and consumption
efforts in the enterprise to bring behavioral
change towards a data culture.
• The concept of Data Analytics must be
spread through both formal data centers
and informal social networks for an inclusive
growth.

According to a recent Forbes study titled

EY-Forbes-Insights: Data and Analytics
Impact Index“people and culture” can
influence the intelligence gathered from
Business Analytics.

This study conducted jointly by

Forbes Insights and EY interviewed
global executives and concluded that:

• Every modern business needs to build its

Data Analytics framework, where the latest
data technologies like Big Data play a
crucial role.