Business Analytics

Definition
• Popular definition from authors Michael J Beller and Alan Barnett,
“Business analytics refers to the skills, technologies, and practices for
continuous iterative exploration and investigation of past business
performance to gain insight and drive business planning”. 
PROBLEM: EXPECTATIONS-ACTUAL RESULT=DIFFERENCE
 What do business analysts do?
• Business analysts help identify problems, opportunities, and solutions for their
organizations. They do this by:
• Evaluating a company’s current functions and IT structures
• Reviewing processes and interviewing team members to identify areas for
improvement
• Presenting findings and recommendations to management and other key stakeholders
• Creating visuals and financial models to support business decisions
• Training and coaching staff in new systems
ANALYTICS
Importance Of Business Analytics
SCOPE OF BA
DATA FOR BUSINESS ANALYTICS
DATA FOR BA
PROBLEM SOLVING AND DECISION
MAKING
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STEP: 3
STEP: 4
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STEP: 6
 What does Analytics answer?
• Analysis of data can reveal correlations and patterns. With the data analytics in
the picture, there becomes a less need for the people to rely on hunches and
intuitions. Also, the analysis of data can help us answering the following
questions:
• Descriptive: What has happened?
• Diagnostic: Why did it happen?
• Predictive: What is likely to happen?
• Prescriptive: Is there anything I can do about it?
 Importance of Business Analytics
• Organizations employ Business analytics so they can make data-driven
decisions.
• Business analytics also offers adequate support and coverage for
businesses who are looking to make the right proactive decisions.
• One of the apparent importance of business analytics is the fact that it
helps to gain essential business insights. It does this by presenting the
right data to work it.
 To be continued…
•  Business analytics collates a considerable volume of data in a timely
manner, and also in a way that it can easily be analyzed. This allows
businesses to make the right decisions faster.
• Business analytics help organizations to reduce risks. By helping them
make the right decisions based on available data.
 Benefits of Business Analytics
1. Improve Customer Service
• Customers are spoiled by the number of choices available. They turn to analytics to ensure organizations can maintain their
client base. Companies should examine the relationship between consumers and prior buying behaviors, for example.
2. Make Informed Decisions
• Companies also outsource some of their operations to increase productivity. When choosing a vendor to do so they must know
which vendor would offer additional revenues.
3. Reduce the Sales of Employees
• Instead of staff onboarding and turnover, businesses have to pay considerable expense per year. HR practitioners may use
predictive methods to save time and expenses to determine the probability of an employee who is aligned with the business
community and how well they are satisfied with the current job and related considerations.
 To Be Continued…
4. Performance Enhancement
• The productivity of workers is not always limited. Businesses should also evaluate other tools and
understand more. For example, by simply measuring the temperatures of in-store coolers, the grocery
store chain has lowered cooling costs. It was noticed that many degrees less than required were kept in the
refrigerators, thereby increasing the power consumption. Thus the cost of energy decreased without
impacting healthy food storage by raising the temperature.
5. Fraud Identify
• Finance businesses have been using fraud reduction analytics. One way of doing this by using data in an
audit of past consumer sales to detect possible suspicious purchases. To determine the consumer profiles
and risk level, the businesses use predictive analytics. The importance of business analytics methodology
helps to assess the probability of losses and to create better consumer connections with the customers.
Difference between BA AND DA
 Difference between Business Analytics and Business
Analysis
Business Analysis
Primary focus on processes, techniques and functions
It is used to solve complex business problems and give
efficient solutions
Functional, business and domain knowledge is
required to for analyzing business requirement.
It assists to improve performance by standardizing
various processes.
Defining and standardizing business processes across
the business units for a company.
Business Analytics
Primary focus is on data and statistical analysis
It is used to predict future states and drive business
decisions
This requires statistical, mathematical and
programming knowledge for performing business
analytics
The process lead to findings, which helps into further
improvement opportunities.
Making a dashboard to track the main performance
metrics using statistical methods to predict future sales
based on past sales
 Kinds of Business Analytics
• Descriptive Analytics: It helps in describing or summarizing what has happened in
the past.
• Diagnostic Analytics: This focuses on the past performance to ascertain why
something has happened.
• Predictive Analytics: Using all the past gathered data tells what is likely to happen
on a granular level. The prediction of the possible outcome is made using statistical
models and machine learning techniques.
• Prescriptive Analytics: It is a type of predictive analytics used to recommend one or
more courses of action on analyzing the data.
Data Visualization
 Definition
• Data visualization is the presentation of data in a pictorial or graphical
format. It enables decision makers to see analytics presented visually, so
they can grasp difficult concepts or identify new patterns. With interactive
visualization, you can take the concept a step further by using technology
to drill down into charts and graphs for more detail, interactively changing
what data you see and how it’s processed.
 Why do we need data visualization?

• Analyzing the Data in a Better Way

• Faster Decision Making
• Making Sense of Complicated Data
 Challenges and considerations when applying Data
Visualization into your design:

1⃣ Selecting proper visual metaphors

2⃣ Legibility without too much reliance

legends and labels
 To be continued…
3⃣ Data density
and credibility
Data density refers to
the large sample set of
data within a statistical
graphic.
 Types of Data Visualization

1. Bar Graphs
2. Line charts
3. Pie Charts
4. Quantagrams
5. Typography
 Purpose of Data Visualization

• Data visualization strengthens the impact of messaging for your audiences

and presents the data analysis results in the most persuasive manner. 
• It helps to understand the data better to measure its impact on the business
• Available data and insights enable decision-makers to aid decision
analysis.
 Data Sources
• 1. Primary data:
Few methods of collecting primary data:
1. Interview method: 2. Survey method: 3. Observation method:
4. Experimental method:
• 2. Secondary data:
1. Internal Sources 2. External Sources
 Other sources:

• Sensors data: With the advancement of IoT devices, the sensors of these devices collect
data which can be used for sensor data analytics to track the performance and usage of
products.
• Satellites data: Satellites collect a lot of images and data in terabytes on daily basis
through surveillance cameras which can be used to collect useful information.
• Web traffic: Due to fast and cheap internet facilities many formats of data which is
uploaded by users on different platforms can be predicted and collected with their
permission for data analysis. The search engines also provide their data through keywords
and queries searched mostly.
 Data Quality
There are many definitions of data quality. The two predominate ones are:
• Data is of high quality, if the data is fit for the intended purpose of use
• Data is of high quality, if the data correctly represent the real-world
construct that the data describes
• High-quality data is collected and analyzed using a strict set of guidelines
that ensure consistency and accuracy. Meanwhile, lower-quality data often
does not track all of the affecting variables or has a high-degree of error. 
Figure 2
 Quality data in warehouse.

• Measures for data quality: A multidimensional view

• Accuracy: correct or wrong, accurate or not
• Completeness: not recorded, unavailable, …
• Consistency: some modified but some not, dangling, …
• Timeliness: timely update?
• Believability: how trustable the data are correct?
• Interpretability: how easily the data can be understood?
 Benefits Of Quality Data
• Make good business decisions fast
• Work across teams
• Get a holistic view of the customer
 The Problem with Bad Data
• High Costs
• Wrong Decisions
• Strained Customer Relationships
 Missing Data
Understand the reason why data goes missing:-
• Missing at Random (MAR): Missing at random means that the propensity for a data point to
be missing is not related to the missing data, but it is related to some of the observed data
• Missing Completely at Random (MCAR): The fact that a certain value is missing has
nothing to do with its hypothetical value and with the values of other variables.
• Missing not at Random (MNAR): Two possible reasons are that the missing value depends
on the hypothetical value (e.g. People with high salaries generally do not want to reveal their
incomes in surveys) or missing value is dependent on some other variable’s value (e.g. Let’s
assume that females generally don’t want to reveal their ages! Here the missing value in age
variable is impacted by gender variable)
 Ways to Handle Missing Values
1. Ignore the tuple: This method is not very effective, unless the tuple contains several
attributes with missing values. It is especially poor when the percentage of missing values per
attribute varies considerably.

2. Fill in the missing value manually: This approach is time-consuming and may not be
feasible given a large data set with many missing values.

3. Use a global constant to fill in the missing value: Replace all missing attribute values by the
same constant, such as a label like “Unknown”.
 Ways to Handle Missing Values

4. Use the attribute mean to fill in the missing value: For example, suppose that the
average income of customers is $56,000. This value to used to replace the
missing value for income.

5. Use the attribute mean for all samples belonging to the same class as the given
tuple: For example, if classifying customers according to credit risk, replace
the missing value with the average income value for customers in the same
credit risk category as that of the given tuple.
 Data Cleaning
• Importance
• “Data cleaning is one of the three biggest problems in data warehousing”—Ralph Kimball
• “Data cleaning is the number one problem in data warehousing”—DCI survey
http://www.dciexpo.com/customer/aboutdci.htm

• Data cleaning tasks

• Fill in missing values
• Identify outliers and smooth out noisy data
• Correct inconsistent data
• Resolve redundancy caused by data integration