Module 1

Introduction to
Business Analytics

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What Is Business Analytics? - YouTube
What is Business Analytics (BA)?
Business analytics is a set
of automated data analysis
practices, tools and services
that helps one understand both
what is happening in the
business and why, to improve
decision-making and help in
planning for the future.
AllBusiness.com
What is Business Analytics (BA)?

Business analytics is the use of data, information

technology, statistical analysis, quantitative methods
and mathematical or computer-based models to help
managers gain improved insight about their business
operations and make better fact-based decisions.
 What is Business Analytics (BA)?
The term
“business analytics”
is often used in
association with
business
intelligence (BI) and
big data analytics.
https://financesonline.com/uploads/2019/10/business-analytics-head-image.png
 Evans

A glimpse about big data Copyright © 2013 Pearson Education, Inc.

publishing as Prentice Hall

MULTIPLES OF BYTES
NAME (SYMBOL) VALUE BINARY USAGE
kilobyte (kB) 103 210
megabyte (MB) 106 220
gigabyte (GB) 109 230
terabyte (TB) 1012 240
petabyte (PB) 1015 250
exabyte (EB) 1018 260
zettabyte (ZB) 1021 270
yottabyte (YB) 1024 280
A glimpse about big data
Evans
Copyright © 2013 Pearson Education, Inc.
publishing as Prentice Hall

•A zettabyte (symbol ZB, derived from the SI prefix zetta-) is a unit of information or
computer storage equal to one sextillion bytes.

•As of April 2012, no storage system has achieved one zettabyte of information. The
combined space of all computer hard drives in the world was estimated at approximately 160
exabytes in 2006.[6] This has increased rapidly however, as Seagate reported selling 330
exabytes worth of hard drives during the 2011 Fiscal Year.[7]

•As of 2009, the entire World Wide Web was estimated to contain close to 500 exabytes.[8]
This is a half zettabyte.

•1,000,000,000,000,000,000,000 bytes = 10007 bytes = 1021 bytes

The term "zebibyte" (ZiB), using a binary prefix, is used for the corresponding power of 1024
According to CISCO:
• In 2016, Cisco Systems stated that the Zettabyte Era was now a
reality.
• Further, it mentioned that by the year 2023,

(https://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-
vni/vni-hyperconnectivity-wp.html#_Toc484556816)
3 key competencies people need to
successfully compete in the BA world
1. Information management skills to manage data. This
competency involves expertise in a variety of techniques for
managing data to achieve quality data.
2. Analytics skills and tools to understand the data.
3. Data-oriented culture to act on the data. Within the
organization, everyone involved must believe strongly in
fact-based decisions arrived at using analytical methods.
From Harvard Business School

9 Skills Every Business Analytics Professional Needs - Harvard Business Analytics Program (hbs.edu)
From Harvard University
A great business analytics professional could be described as:
- A good communicator
- Inquisitive
- A problem solver
- A critical thinker
- A visualizer
- Both detail-oriented and a big picture thinker
From Harvard University
Top Tools for Business Analytics Professionals
- SQL
- Statistical Languages like R, for statistical analysis, and Python,
for general programming
- Statistical software like SPSS, SAS, Mathematica, Excel, etc.
Business analytics by James Evans
Some applications of Business Analytics
1. Direct marketers analyze enormous customer
databases to see which customers are likely to respond
to various products and types of promotions.
Marketers can then target different classes of customers
in different ways to maximize profits – and given their
customers what they want.
Some applications of Business Analytics
2. Hotels and airlines, through the analysis of enormous
databases, have been able to devise very clever pricing
strategies, where different customers pay different
prices for the same accommodation. For example,
seats are reserved for business travelers at a higher
price since these travelers makes a plane reservation
closer to the time of travel than a vacationer would.
Some applications of Business Analytics
3. Financial planning services have a virtually unlimited
supply of data about security prices and have customers
with widely differing preferences for various types of
investments. Financial planners are under extreme
pressure to analyze masses of data to provide informed
decisions to their customers since they can easily pull-
out and divert their investments if good decisions are
not made on their behalf.
 Some common types of decisions that can be
enhanced by using analytics:
•Pricing
•Customer segmentation
•Merchandising
•Location
•Social Media
Business analytics by James Evans
Business analytics by James Evans
 Four Types of Analytics

 Descriptive analytics (What has happened?)

 Uses data to understand the past and the present
 Diagnostic analytics (What is causing it?)
 Determines the cause behind business problems
 Predictive analytics (What could happen in the future?)
 Analyzes past performance
 Prescriptive analytics (What should be done?)
 Uses optimization techniques

Business analytics by James Evans

 Scope of
Business
Analytics

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Business analytics by James Evans
Business Analytics in Practice (Camm et al)
• Financial Analytics
• Use of predictive models to forecast future financial performance, assess the
risk of investment profiles and projects, and construct financial instruments
such as derivatives.
• Use of prescriptive models to construct optimal portfolios of investments,
allocate assets, and create optimal capital budgeting plans.
• Human Resource (HR) Analytics
• Use of descriptive and predictive analytics to support employee hiring and to
track and influence retention.
Business Analytics in Practice
• Marketing Analytics
• Descriptive, predictive, and prescriptive analytics are used heavily to
understand consumer behavior through the use of scanner data and data
generated from social media.
• Predictive analytics is also used to support pricing decisions.
• Health Care Analytics
• Descriptive, predictive, and prescriptive analytics are used to improve patient,
staff, and facility scheduling; patient flow; purchasing, and inventory control.
• The use of prescriptive analytics for diagnosis and treatment was also
developed to determine the optimal placement of radioactive seeds for the
treatment of prostrate cancer.
Business Analytics in Practice
• Supply Chain Analytics
• Descriptive, predictive, and prescriptive analytics are used heavily to provide
optimal sorting and efficient delivery of goods, vehicle and staff scheduling,
and vehicle routing.
• Predictive analytics is also used to support pricing decisions.
• Web Analytics
• Involves the analysis of online activity, which includes, but is not limited to,
visits to Websites and social media sites such as Facebook and Linked.
• Analytics is applied to collect data in online experiments to determine the
best way to configure Web sites, position ads, and utilize social networks to
promote products and services.
Business analytics by James Evans
 Types of Data
In general, data are compilations of facts, figures, or other
contents, both numerical and nonnumerical. An important
step for making decisions is to find the right data and prepare
it for analysis.
Data that have been organized, analyzed, and processed
in a meaningful and purposeful way become information.
We use a blend of data, contextual information,
experience, and intuition to derive knowledge that can be
applied and put into action in specific situations.

Business analytics by Jaggia, et al (2021)

 Types of Data

Business analytics by Jaggia, et al (2021)

 Types of Data
In most instances, it is not feasible to collect data that
comprise the population of all elements of interest for two
main reasons:
1. Obtaining information on the entire population is
expensive.
2. It is impossible to examine every member of the
population.
Therefore, a subset of data, or a sample, is used for the
analysis.
Business analytics by Jaggia, et al (2021)
 Types of Data:
Cross-Sectional and Time Series
Sample data are generally collected in two ways:
1. Cross-sectional data are those collected by recording a
characteristic of many subjects at the SAME POINT IN
TIME.
2. Time-series data refer to data collected over several time
periods focusing on certain groups of people, companies,
specific events, or objects.

Business analytics by Jaggia, et al (2021)

 Types of Data:
Cross-Sectional and Time Series

Business analytics by Jaggia, et al (2021)

 Types of Data:
Structured and Unstructured Data
Data come in multiple forms:
1. Structured data reside in a predefined row-column format.
Spreadsheets and database applications are used to enter,
store, query, and analyze structured data.
2. Unstructured data tend to be textual (e.g. written reports,
email messages, videos, and audio data). Examples are
social media data from Twitter, Facebook, and blogs.

Business analytics by Jaggia, et al (2021)

 Types of data

Business analytics by James Evans

 Types of Data: BIG DATA
Big data is a catchphrase, which means a massive
volume of both structured and unstructured data that are
extremely difficult to manage, process, and analyze using
traditional data-processing tools.
More formally, it is “high-volume, high-velocity and/or
high variety information that enables enhanced insight,
decision-making, and process automation.

Business analytics by Jaggia, et al (2021)

Types of Data:
BIG DATA

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big-data-volume-velocity-and-variety&psig=AOvVaw18dxIwC87T6Am-
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Business analytics by Jaggia, et al (2021) AABAD
 • https://cdn.ttgtmedia.com/rms/onlineimages/
data_management-big_data_vs_mobile.png

Business analytics by Jaggia, et al (2021)

 The 7Vs of Big Data

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Data-Volume-Velocity-Variety-Variability-Veracity-Value-and_fig1_341622174&psig=AOvVaw18dxIwC87T6Am-
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Business analytics by Jaggia, et al (2021)

 Types of data

Business analytics by James Evans

Measurement scales
Measurement scales (Jaggia et al, 2021)