Unit 1 Business Analytics

UNIT 1
Business Analytics
◦ It 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.
◦ Business analytics is supported by various tools such as Microsoft

Excel and various Excel add-ins, commercial software packages
such as SAS or Minitab and more complex business intelligence
suites that integrate data with analytical software.
Business Analytics
Common type of decisions that can be enhanced by
using analytics include
Pricing
Customer segmentation
Merchandising
location
Types of business analytics
1) Descriptive analytics- Use of old data to understand past and
current business performance and make informed decisions. These
techniques categorize characterize ,consolidate and classify data to
convert it into useful information for the purposes of understanding and
analysing business performance.
◦ Techniques used :Percentage Analysis, Mean, Median ,Pie diagram, Graphs
Types of business analytics
2)Predictive analytics-Seeks to predict the future by examining historical
data, detecting patterns or relationships in these data and then
extrapolating these relationships forward in time.
◦ Techniques used: Decision tree, Regression
3)Prescriptive analytics-Uses optimization to identify the best alternatives

to minimize or maximize some objective.it is used in many areas of
business including operations, marketing and finance.
◦ Techniques used: Optimisation ,Simulation
Scope of Business Analytics
Data Collection and Management:
Data Analysis
Data Visualization
Business Communication: Business analysts play a crucial role in communicating data-driven

insights to non-technical audiences
Risk Management:
Competitive Advantage
Scope of Business Analytics
The scope of business analytics applies across various business functions, including:
• Marketing: Analytics helps identify target audiences, personalize marketing campaigns,

measure marketing effectiveness, and optimize customer acquisition strategies.
• Sales: Business analytics helps identify high-value leads, predict customer churn, and optimize
sales forecasting and pipeline management.
• Finance: Financial analytics helps assess financial risks, optimize resource allocation, and
make informed investment decisions.
• Operations: Business analytics helps improve operational efficiency, identify bottlenecks, and
optimize production processes.
• Human Resources: HR analytics helps identify top talent, improve employee retention, and
measure the effectiveness of training programs.
Components of business analytics
1)Processing
Defining objectives
Data Aggregation-Data collected, sorted and filtered
Data Cleaning-Removing the outliers
2)Analytics
Analytical Methodology-Determine which analytics will be used to achieve goal using various
analytical tools
Evaluation and Validation-Whether the results holds true in different situation
3)Post Processing
Reporting-Reporting the results in an understandable manner
Visualisation-Information is represented in graphical form,pie chart, graph or any other type of

visual presentation
Components of business
analytics(cont…)
Evolution of business analytics
◦ Modern evolution of analytics began with the introduction of computers in
the late 1940’s and their development through 1960s and beyond.
◦ Early computers provided the ability to store and analyse data in ways that
were either very difficult or impossible to do so manually.
◦ This facilitated the collection ,management, analysis and reporting of data

which is often called business intelligence(BI)a term that was coined in1958
by an IBM researcher Hans Peter Luhn.
Visual Perspective of Business
Analytics(Evolution of business analytics)
Evolution of business analytics(cont..)
◦ BI has evolved into the modern discipline we now call information systems
◦ Statistics has a long and rich history, but recently has it been recognized as
an important element of business
◦ Statistical methods allows us to gain a richer understanding of data that

goes beyond business intelligence reporting by not only summarizing data
briefly but also finding unknown and interesting relationships among the
data.
◦ Much of modern business analytics stems from the analysis of complex
decision problems using mathematical or computer based models-a
discipline known as operations research or management science.
◦ Many OR/MS applications use modeling and optimization techniques for

translating real problems into mathematics, spreadsheets or other
computer languages and using them to find the best solutions and
decisions.
◦ Decision support systems began to evolve in the 1960s by combining

business intelligence concepts with OR/MS models to create analytical
based computer systems to support decision making.
Evolution of business analytics (cont..)
◦ Decision support system include three components:
◦ Data Management-includes databases for storing data and allows the

user to input, retrieve, update and manipulate data.
◦ Model Management-consists of various statistical tools and

management science models and allows the user to easily build,
manipulate ,analyse and solve models.
◦ Communication system-The communication system component

provides the interface necessary for the user to interact with the data
and model management components.
Evolution of business analytics (cont..)
◦ Modern business analytics can be viewed as an integration of
BI/IS, statistics and modeling and optimization
◦ Data mining is focused on better understanding characteristics

and patterns among variables in large databases using a variety
of statistical and analytical tools
◦ Simulation and risk analysis relies on spreadsheet models and statistical
analysis to examine the impacts of uncertainty in the estimates and their
potential interaction with one another on the output variable of interest.
◦ Spreadsheets and formal models allow one to manipulate data to perform

what if analysis-how specific combinations of inputs will affect model outputs
◦ Visualisation- Visualising data and results of analyses provide a way of easily

communicating data at all levels of a business and can reveal surprising
patterns and relationships
◦ The most influential developments that propelled the use of business analytics
have been the personal computer and spreadsheet technology
Analytics Process
Analytics Process (cont…)
1)Defining the business needs
Understanding what the business would like to improve on or the problem it wants
solved.
Relevant data needed to solve these business goals are decided upon by the business
stakeholders, business users with the domain knowledge and the business analyst.
At this stage, key questions such as, “what data is available”, “how can we use it”, “do
we have sufficient data” must be answered.
Analytics Process(cont…)
2)Explore the data
This stage involves cleaning the data, making computations for missing data, removing
outliers, and transforming combinations of variables to form new variables.
Time series graphs are plotted as they are able to indicate any patterns or outliers. Once
the data has been cleaned, the analyst will try to make better sense of the data.
Summaries the data using appropriate visualisation and descriptive statistics (such as
mean, standard deviation, range, mode, median) that will help provide a basic
understanding of the data.
3)Analyse the data
Statistical analysis methods such as correlation analysis and hypothesis testing, the
analyst will find all factors that are related to the target variable.
The analyst will also perform simple regression analysis to see whether simple
predictions can be made.
In addition, different groups are compared using different assumptions and these are
tested using hypothesis testing.
4)Predict what is likely to happen
Involves deep analytics of past or historical data in order to estimate

product performance market condition or customer behaviour.
The analyst will then compare the predicted values to actual values
and compute the predictive errors.
5)Optimise (find the best solution)
The analyst will select the optimal solution and model based on the lowest
error, management targets and his intuitive recognition of the model
coefficients that are most aligned to the organization's strategic goal.
6)Make a decision and measure the outcome
The analyst will then make decisions and take action based on the derived
insights from the model and the organizational goals.
 An appropriate period of time after this action has been taken, the outcome of
the action is then measured.
7)Update the system with the results of the decision
Finally the results of the decision and action and the new insights
derived from the model are recorded and updated into the
database.
 The result is an evolving database that is continuously updated

as soon as new insights and knowledge are derived.
Challenges for business analytics
Business analytics depends on sufficient volumes of high quality data.
The difficulties in ensuring data quality.
Data warehousing needs a lot of storage space .
Technology infrastructure and tools must be able to handle the data

and business analytics processes.
Organisations should be prepared for the changes that business

analytics bring to current business and technology operations.
Security and privacy issues

Significance and usages of business
analytics/Importance
To make data driven decisions
Convert available data into valuable information
Up to date with the market trends
Clear Business Insights
Get insight into consumer behaviour
Impacts functioning of the whole organization
Measure performance and drives growth
Disadvantages of business analytics
Cost
Data quality
Complexity
Privacy and security
Inflexibility
Overview of data analysis
◦ Data analysis is the process of cleaning, changing, and processing
raw data and extracting actionable, relevant information that helps
businesses make informed decisions.
◦ Basically, this is the process of analyzing the past or future and
making a decision based on that analysis.

Purpose of data analysis
Get hidden insights
Generate reports
Perform market analysis
Improve business requirements

Importance of Data Analysis
Better Customer Targeting
You Will Know Your Target Customers Better:
Reduce Operational Costs:
Better Problem-Solving Methods:
You Get More Accurate Data

Data Analysis Process
Data Requirement Gathering
Data Collection:
Data Cleaning
Data Analysis:
Data Interpretation
Data Visualization
Data Analysis Methods
◦ Statistical analysis
◦ Data mining
◦ Machine learning
◦ Text analytics
◦ Data visualisation
Data Analysis Tools
◦ Tableau
◦ Python
◦R
◦ SQL
◦ Power BI
Data Analyst
Process and analyse the massive data set.
Gathering ,processing and analysing large amounts of data
Filter the data, apply statistical model and prepare the report
Ensure data quality and accuracy.
Once the report is generated ,their job is to design and present their findings in a way
that consumers and businesses could understand so that thy could still make better
decisions.
Soft skills such as professional knowledge, excellent communication and presentation

skills as well as hard skills such as computer knowledge, critical thinking and
visualization skills are required for data analyst.

Data analyst
Roles and responsibilities of data analyst
Business Analysts Role
Define ,document and analyse requirements in order to develop technical solutions to

business problems or increase sales revenue for a company.
Business Analyst skills
Technical abilities-Include stakeholder management, data modelling and IT

knowledge.
Analytical abilities-Must analyse large amounts of data as well as business operations

to generate ideas and solve problems
Communication
Problem solving
Research abilities
Responsibilities of data analyst
Analyse the existing business and identify areas that need to be improved
Through examination of the entire business process
To identify new advancements in information technology
Look for new ideas and present them at meetings
Staff members must be trained
Take initiatives based on business requirements and needs
To create projects and track their progress
Collaborating with senior management ,partners ,clients and technicians

Additional role and responsibilities of
data analyst
Need of a business-Comprehend the needs of all stakeholders. Once the
need has been identified ,it must be communicated to the developers.
Holding meetings with the development team and stakeholders.
System possibilities-Ensure what a project requires.
Present the company-Presenting company's ideas and goals to

stakeholders.
Present the details.-Developing the project down to the smallest of

details.
Additional role and responsibilities of data
analyst(cont…)
Implementation of the project-Incorporate whatever is being scheduled.
Testing-Test the product among users to determine its working capacity and
quality.
Decision making and problem solving-
Maintenance-
Building a team
Presentation and documentation of final project

Data Engineer
Data engineers deal with anything that happen to data before it
reaches the database.
Data engineers will be in charge of linking data and preparing it for

analytical use.
Their primary goal is to ensure that data is collected, stored, processed,

and made accessible in an efficient and reliable manner.
Role and Responsibilities of Data Engineer
How to extract information from various sources and route it to a single
destination for analysts and scientists to consume.
 Ensure that the data channel, collection, as well as database design are
optimized and cost effective for the company.
Ensure that the database used by analysts and scientist is up to date

confirmed and trustworthy.
Data engineers are also known as software engineers because like

software engineers, they are tasked with developing platforms at which
information is kept such as cloud computing.
Skills Required to Become a Data Engineer
1)SQL
Structured query language (SQL) is a programming language for storing and

processing information in a relational database. A relational database stores
information in tabular form, with rows and columns representing different data
attributes and the various relationships between the data values.
2) Data Warehousing
Data warehousing assists data engineers to aggregate unstructured data, collected

from multiple sources.
3)Data Architecture
Data engineers must have the required knowledge to build complex database
systems for businesses
Skills Required to Become a Data Engineer
4) Coding-programming skills-
5) Operating System-well-versed in operating systems like UNIX, Linux, and Windows.
6) Machine Learning-Machine learning is a growing technology which enables computers to

learn automatically from past data. Machine learning uses various algorithms for building
mathematical models and making predictions using historical data or information.
Data scientist
Data scientist works on new ways of capturing and analysing data to be used by the analysts.
They apply advanced analytics and machine learning techniques to extract predictive and
prescriptive insights.
Data scientist are classified as
1)Research focused
2)Business focused
Assist businesses in making data driven decisions. This involves
1)Comprehending the business problem
2)Comprehending how to use data to solve it
3)Development focused
Roles and responsibilities of data scientist
Exploring and analyzing large datasets to identify patterns, trends, and relationships.
Conducting exploratory data analysis to gain insights into the underlying data.
Create solutions and strategies to business problems
Evaluating and selecting appropriate machine learning algorithms based on the nature of
the data and the problem at hand.
Present data using various data visualization techniques and tools
To boost general effectiveness and performance, stay current with the newest tools, trends,
and technologies
Create analytics solutions for businesses by combining various tools, applied statistics, and
machine learning
Effectively communicating complex technical findings to non-technical stakeholders.

Business Analytics in Practice
The list of positions that were offered at large established companies:
Data Visualization Consultant(Accenture)
Data Analytics Manager(Deloitte)
Business Intelligence Analyst(UBS)
Compliance office Analyst(Citibank)
Data and Analytical consultant(Accenture)
Loan operations business Analyst(capital one)
Business intelligence Architect(Nike)
Customer intelligence Analyst(PSEG)
Business Analytics in Practice(cont…)
Business analytics skillset lies at the intersection of expertise from three
domains
Knowledge of specific business domain
Knowledge of technical data management and programming
Knowledge of statistics
◦ Business analytics require theoretical and practical knowledge of software packages

commonly used for statistical analysis, primarily SAS and R software.
◦ Job descriptions frequently call for experience with regression modelling techniques.
◦ Regression analysis requires an understanding of the statistical knowledge of

distribution, sampling and statistical inference.
Business Analytics in Practice (cont…)
The ability to locate ,extract and prepare data for analysis is required for business
analytics practitioners.
Technical data management skills range from basic structured query language
competency in popular relational database management systems.
Knowledge of data extraction ,transformation ,loading and cleaning is frequently used in

career data warehousing requirements.
Many jobs require knowledge of the python programming language as a data processing
and data analysis development platform.
Jobs almost universally considered necessary expertise in data visualization.
Many positions require Tableau software for data visualization but several positions also
suggested Qlikview as another potential data visualization software choice.
Business Analytics in Practice (cont…)
Four companies-incorporating data insights into their decision making
processes
1.Improving productivity and collaboration at Microsoft.
2.Enhancinng customer support at Uber
3.Forecasting orders and recipes at Blue Apron
4.Targeting Consumers at Pepsico

Business Analytics in Practice
Application of business analytics are as follows:
Customer service analysis
Predictive modelling
HR analytics
Marketing Analysis
Supply chain optimization
Financial analytics
Supply chain analytics

Career in business analytics
Career opportunities in business analytics are currently in high demand.
Business analytics aids in the expansion of a company.
It also helps in staying ahead of the competitors.
This is why a career in business analytics is a wise option in todays market and it is
in high demand.
Top business analytics careers:
1. Business Analyst
2. Data Analyst
3. HR analyst
4. Financial Analysts
5. Supply chain analyst
6. Marketing Analyst
7. Data scientist
Career in business analytics(cont..)
1.Business Analyst
Earns a median salary of 7.0LPA ,with salaries ranging from 3 lakhs per
annum to 15 lakh per annum.
Those with less than a year experience earn approximately INR 3.5 Lakh per
year, and those with four year experience earn INR 5 Lakh per year.
10-19 years experience-earn INR 10 lakh on an average
More than 20 years-earn INR 20 lakh on annually

Career in business analytics(cont…)
Role of business analyst
Improving the processes, products, services and systems of a company.
Strong research skills to identify the company’s weak points and make necessary
improvements
Effective communication skills
The following are a few industry applications of business analytics
E-commerce
Education
Finance
Banking
Agriculture
Career in business analytics (cont…)
2.Data Analyst
They work with data gathered either from primary or secondary sources to make
decision making easier, faster and more accurate.
Average salary of data analyst is 4.3 lakhs per year
Pay could be higher due to a variety of factors such as experience ,level of upskilling,
skill set ,location and other factors.
Data analyst with one to four years of experience earn an average of INR 5.2 lakhs per
year
5-9 years experience -6 lakh per year
10-19 years experience -9 lakh per year

Work done by a data analyst
Conduct surveys and collect the information required for the analysis
Responsible for presenting data in an understandable manner
Use Microsoft access ,SQL ,Excel and a variety of other technologies
Roles and responsibilities of data analyst
Collect data
Analyse data
Use statistical methods and techniques
Generate reports
Skills required for a data analyst
SQL
Data management
Data visualization
Data cleaning
Python
R
Linear algebra and calculus
3.HR analyst
Earns 4.7 lakhs per year on average
The average annual salary ranges from 2.9 lakhs to 10.6 lakhs
Pay could be higher due to a variety of factors such as experience , skill set
,level of education ,location and other factors
HR analyst with less than a year of experience earn an average of INR 3.7 Lakh
annually.
HR analyst with 5 to 9 years of experience earn INR 5.1 lakh annually on
average
Those with 10 or more years of experience earn 8 lakh per year

Work done by HR analyst
 Analyse human resource data using computer applications and techniques.
 They collect, research ,analyse and apply data to make better decisions in HR
 They assist the organization in finding better candidates, motivating current employees and resolving staffing issues
Role and responsibilities of HR analyst
 Trend analysis for employee purpose
 Statistics analyses
 Attrition identification
 Performance identification
 Relationship management
 Improving the hiring process
 Developing more productive work force
 Employee upskilling and training

4. Marketing Analyst
A marketing analyst earns an annual salary of 7.9 lakhs on average.
The annual salary ranges from 2.4 lakhs to13.1 lakhs
Those with less than a year of experience in this field earn INR 3.5 lakh per year on
average.
Those with one to four year of experience earn INR 4.5 Lakh per year on average
Marketing analyst with 5 to 9 years of experience earn INR 6 lakh per year.
Work done by a marketing analyst
In charge of assisting businesses in gathering marketing insights on their
products and services.
They use customer profiling ,data analysis, and predictive statistics to analyse
marketing programmes and industry trends.
Collaborate with other department within a company to prepare and present

findings to clients.
Look for new marketing campaign opportunities and generate sales forecasts.
Their insight assist businesses in acquiring new customers, retaining existing

customers and increasing revenue.
Roles and responsibilities for a marketing analyst
Analyse data
Identify the patterns or trends
Analyze sales funnels and customer intent
Measure ROI of online and offline advertising campaigns
Skills required of a marketing analyst
Market research
Marketing communications
Marketing strategy
MS Excel
Statistical literacy
Communication
5. Financial Analysts
Annual salary is approximately 4.0 lakh.
The average salary ranges from 2.1 lakh to 10.1 lakh.
Employment opportunities are also expected to grow with a 9% increase projected from 2021
to 2031.
Work done by a financial analyst
The business rely on financial analysts to determine the best ways to invest their profits
They must study recent trends, consider microeconomic and macroeconomic factors and
demographics to assist businesses in making appropriate investments
Advise companies on how to protect and expand their current wealth in difficult times.
They could assist the executive board in determining how risky a particular investment is in
order to make more informed decisions
Roles and responsibilities of financial analyst
Analyse the financial data and make predictions
Reports generation
Identify the investment opportunities and advice
Profit/loss analysis
Financial planning
Mergers and Acquisitions (M&A) Analysis:

Skills required for a financial analyst
Financial skills
Analytical skills
Financial modelling
MS Excel
6. Supply chain analyst
Earns an average annual wage of 5.5 lakhs.
The average salary for an employee ranges from 2.6 lakhs to 12 lakhs
Their pay is strongly influenced by their level of knowledge and skills
Role of supply chain analyst
Must look for ways to improve their company distribution network.
They collaborate with other organizational teams to determine whether the current
supply chain is optimal and how to improve it
They may identify flaws in their organization current warehousing system and
recommend a better one to improve the operations efficiency
Responsibilities of a supply chain analyst
Collecting the data
Analyzing the data
Operations management
Inventory analysis
Analyzing trends
Skills required from a supply chain analyst
Quantitative analysis
Analytical Skills
Problem solving
Decision making
Critical analysis-detailed examination and evaluation

7. Data scientist
They are regarded as one of the highest paying professions
Annual salary is on average 10.5 lakhs
Salary ranges from 4.5 lakhs per year to 25.2 lakhs per year
Some skills that pay well in this profession include:
SPSS
Artificial Intelligence
Software Development
Programming Skills:
Role of data scientist
Extracting valuable insights from large amounts of data to assist

their company in making more informed decisions
They gather insights from unstructured and structured data using

different processes, algorithms and scientific methods.
They carry out their responsibilities by utilizing machines learning

algorithms, deep learning and other technical skills
Career in business analytics
Skills required for a data scientist
Computing
Statistical analyses
Data visualization
Programming
Mathematics
Report generation
Communication
Data analysis
Introduction to R
R is a programming language and free software environment specifically designed for
statistical computing and graphics.
R is widely used by statisticians, data analysts, researchers, and scientists for tasks
such as data analysis, statistical modeling, machine learning, and visualization.
Introduced in 1993.
R is available for Windows, Unix, Linux and Macintosh platforms

Key Features of R
Data Manipulation
Statistical Analysis
Data Visualisation
Open source
Machine learning
Why R Programming Language
Leading tool for machine learning, statistics, and data analysis
Applied to all operating system
Open source language
R also allows us to integrate with other languages (C,C++).
Vast community of users and is growing day by day.
Most requested programming language in the data science job market that
makes it the hottest trend now a days.
Statistical features of R
Basic statistics-Measures of central tendency
Static graphics-Many Plot types
Probability distribution-
Data Analysis
Advantages of R
Open Source:
Rich Statistical Functionality
Data Visualization:
Integration with Other Tools:
Runs on any operating system

Disadvantages
Memory Management:
Speed: R can be slower than other languages, such as C++ or Python, when it comes
to execution speed.
Some users find R's error messages to be less informative compared to other
programming languages.
Applications
Finance
Banking
Healthcare
Social media
E Commerce
Manufacturing
Some more applications of R
Descriptive Statistics
Exploratory data analysis
Analysing continuous and discrete probability distribution
Hypothesis testing
Correlation
Interactive web application package called Rshiny
Develop predictive models

Real life uses of R
◦ Facebook
◦ Ford motor company
◦ Google
◦ Microsoft
◦ Twitter
◦ ANZ Bank

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UNIT 1

◦ Business analytics is supported by various tools such as Microsoft

3)Prescriptive analytics-Uses optimization to identify the best alternatives

Business Communication: Business analysts play a crucial role in communicating data-driven

• Marketing: Analytics helps identify target audiences, personalize marketing campaigns,

Data Aggregation-Data collected, sorted and filtered

Data Cleaning-Removing the outliers

Evaluation and Validation-Whether the results holds true in different situation

Reporting-Reporting the results in an understandable manner

Visualisation-Information is represented in graphical form,pie chart, graph or any other type of

◦ This facilitated the collection ,management, analysis and reporting of data

◦ Statistical methods allows us to gain a richer understanding of data that

◦ Many OR/MS applications use modeling and optimization techniques for

◦ Decision support systems began to evolve in the 1960s by combining

◦ Data Management-includes databases for storing data and allows the

◦ Model Management-consists of various statistical tools and

◦ Communication system-The communication system component

◦ Data mining is focused on better understanding characteristics

◦ Spreadsheets and formal models allow one to manipulate data to perform

◦ Visualisation- Visualising data and results of analyses provide a way of easily

Involves deep analytics of past or historical data in order to estimate

6)Make a decision and measure the outcome

 The result is an evolving database that is continuously updated

The difficulties in ensuring data quality.

Data warehousing needs a lot of storage space .

Technology infrastructure and tools must be able to handle the data

Organisations should be prepared for the changes that business

Security and privacy issues

Privacy and security

◦ Basically, this is the process of analyzing the past or future and

making a decision based on that analysis.

Perform market analysis

Improve business requirements

Better Customer Targeting

You Will Know Your Target Customers Better:

Reduce Operational Costs:

Better Problem-Solving Methods:

You Get More Accurate Data

Data Requirement Gathering

Gathering ,processing and analysing large amounts of data

Ensure data quality and accuracy.

Soft skills such as professional knowledge, excellent communication and presentation

visualization skills are required for data analyst.

Define ,document and analyse requirements in order to develop technical solutions to

Business Analyst skills

Technical abilities-Include stakeholder management, data modelling and IT

Analytical abilities-Must analyse large amounts of data as well as business operations

Through examination of the entire business process

To identify new advancements in information technology

Look for new ideas and present them at meetings

Staff members must be trained

Take initiatives based on business requirements and needs

To create projects and track their progress

Collaborating with senior management ,partners ,clients and technicians

Holding meetings with the development team and stakeholders.

System possibilities-Ensure what a project requires.

Present the company-Presenting company's ideas and goals to

Present the details.-Developing the project down to the smallest of

Decision making and problem solving-

Presentation and documentation of final project

Data engineers will be in charge of linking data and preparing it for

Their primary goal is to ensure that data is collected, stored, processed,

Ensure that the database used by analysts and scientist is up to date

Data engineers are also known as software engineers because like