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Business Analytics Pointers

Business analytics uses data to help businesses make conclusions and decisions. It focuses on financial and operational analysis. Big data involves analyzing large amounts of structured and unstructured data from various sources using automated machine processes. The evolution of business analytics saw its beginnings in the industrial age and has advanced with computers, data warehousing, the internet, and cloud computing. While business analytics provides benefits like predictive modeling and testing past decisions, it also presents challenges such as potential privacy invasions and chasing undefined problems. Following best practices such as defining objectives and validating models can help address these challenges.

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90 views

Business Analytics Pointers

Business analytics uses data to help businesses make conclusions and decisions. It focuses on financial and operational analysis. Big data involves analyzing large amounts of structured and unstructured data from various sources using automated machine processes. The evolution of business analytics saw its beginnings in the industrial age and has advanced with computers, data warehousing, the internet, and cloud computing. While business analytics provides benefits like predictive modeling and testing past decisions, it also presents challenges such as potential privacy invasions and chasing undefined problems. Following best practices such as defining objectives and validating models can help address these challenges.

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consume cion
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© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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Business Analytics pointers

Business Analytics (BA) – using the gathered data and information to create a proper conclusion or
action that a business or organization should take.
 focus on financial and operational analytics of the business.
Analytics – extensive use of data that drives decisions and actions.
Business Intelligence (BI) - process of collecting information from all sources to make data-driven
decisions in an organization.
Big Data - involved machine automation to analyze data.
 The main purpose of big data is to assess the best usage of the collected data. Furthermore, Big
data helps on business and systems’ growth, that resulted to a further develop society.
 SAS describes Big Data as “a term that describes the large volume of data – both structured
and unstructured – that inundates a business on a day-to-day basis.”
4 Aspects of Big Data
 Volume is about how huge the data sets are. (scale of data)
 Variety includes how many pieces of data gather together from all sorts of transactions that is
combined together to make one or more profiles for your customers. (forms of data)
 Velocity is the speed of data. (analysis of the flow of data)
 Veracity means having all of these different data, but we don’t know what to do with them.
(uncertainty of data)
The Evolution of Business Analytics
1800’s - the industrial age brought along business management as a scientific discipline. (Henry Ford)
(thus, business analytics became known or recognized)
1970’s - introduction of Decision Support Systems (along with computers) (Data warehouse - first
iteration of today’s server farms) (start of massive collection of data)
Internet, Big Data and the Cloud - analytics have become accessible and affordable to businesses of all
types and sizes. (due to being advance and complex BA help predict future trends and behavior in real-
time)
Benefits of Data-Driven Decision Making with Business Analytics
 Used to conduct data mining (explore data to find new patterns and relationships).
 Ability to complete statistical analysis and quantitative analysis to explain why certain results
occur.
 Test previous decisions using A/B testing and multivariate testing.
 Have the ability to use of predictive modeling and predictive analytics to forecast future results.

Challenges with Business Analytics


Penn State University’s John Jordan described the challenges with Business Analytics:
 A greater potential for privacy invasion.
 Greater financial exposure in fast-moving markets.
 Greater potential for mistaking noise for true insight.
 A greater risk of spending lots of money and time chasing poorly defined problems or
opportunities.
Business Analytics Best Practices
 Know the objective for using Business Analytics.
 Define your criteria for success and failure.
 Select your methodology and be sure you know the data and relevant internal and external
factors.
 Validate models using your predefined success and failure criteria.

Business analytics help us answer the following fundamental questions critical for decision
making:
1. What happened?
 What did the data tell us?
2. Why did a certain event take place?
 Why did it happen?
 What are the sources of problems?
3. Will the same event take place?
 Will the problem recur?
 Are there any noticeable patterns of the problem?
4. What will happen if we change what we used to do?
 How can we deal with the recurring problem?
 What is the value the change will bring?
5. How can we ensure that our changed practices actually work?
 Is there scientific evidence indicating the validity and usefulness of our changed
practices?

By answering the preceding questions, business analytics aims to accomplish these various
goals:
 By answering the preceding questions, business analytics aims to accomplish these various goals.
 Improving predictability.
 Identifying risk.
 Improving the effectiveness of communication.
 Enhancing operating efficiency.
Glossary
Data sets - a collection of related sets of information that is composed of separate elements but can
be manipulated as a unit by a computer.

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