BUSINESS ANALYTICS

Business analytics is the process of transforming data into insights to improve business
decisions. Data management, data visualization, predictive modeling, data mining,
forecasting simulation, and optimization are some of the tools used to create insights from
data.

HISTORY AND EVOLUTION OF BUSINESS ANALYTICS

PREHISTORIC (STONE AGE) – Earliest humans would use sticks and stones to predict sales
trends of new invention.
INDUSTRIAL (1800s) – Brought along business management as a scientific discipline.
INFORMATION AGE (MID 20TH CENTURY) – Computers played a huge role in the
advancement of business analytics with the introduction of Decision Support Systems in the
1970s. Data warehouses also became popular.
INTERNET AGE (21ST CENTURY) – Internet, Big Data, and the cloud came along. Analytics
become accessible, affordable, complex and advanced, that help predict future trends and
behavior in real-time.

Parameters Business Intelligence Business Analytics

Understanding a Company’s past Predicting future outcomes of actions
Definition and present taken by the Company

Its tools focus on data management Its tools focus on data analysis
Focus

BI tools are designed to give insight BA tools are designed to help make
Applications in a company over time better decisions about optimizing
operations for the future

Microsoft Tools Google docs

Tool Used

Descriptive Statistics Predictive and Prescriptive Analysis

Approach
 Enterprise Wide reporting across Detailed analysis of specific areas within
Usage multiple department and teams an Organization.

Presenting information in an easy Presenting information in an easy way for

Examples way to understand for people within outside of an Organization
the Organization
Mainly used by IT Mainly used by Business Departments
Roles

DATA DRIVEN DECISION MAKING – Provides businesses with capabilities to generate real time
insights and predictions it is defined as using facts, metrics, and insights to guide strategic business.
It is a process that involves analyzing collected data.

Why is it important?

• Continual Organization Growth – The core importance of data in decision lies in consistency and
continual growth.

• Knowledge and Innovation – Companies that approach decision making collaboratively tend to
treat information as a real asset more than companies with other, more ambiguous approaches.

• New Business Opportunities – Decision making based on data leads to the discovery of new and
exciting business opportunities.

• Better Communication – Working with a data driven decision management mindset, you will
become a better leader.

• Unrivaled Adaptability – One of the prime benefits of data driven decision making is that will drive
your business to be incredibly adaptable.
BIG DATA AND BUSINESS ANALTICS
Big data as a term that describes the large volume of structured and unstructured data

Analytics – It is a widespread and important to make better decision for businesses. It involves
analyzing past data patterns and applying them to make predictive.

Application of Business Analytics

Finance
– Assist financial managers in managing their finances optimally.
Human Resources Management (HRM)
– Can be used by HR in determining right candidates and the expected salaries
Marketing
– Can help marketers know their target and audience and their interest.
Customer Relationship Management (CRM)
– To understand the customer base better and therefore, implement customer strategies.
Production and Inventory Management – It serves as a great tool for management and
manufacturing. It is involved in every phase of product development.

BUSINESS ANALYTICS

– It focus on financial and operational analytics of the business.

BIG DATA

– It involved machine automation to analyze data.

o It is not on how much data you have, but what you do with those data.

There are four aspects that define big data;

• Volume – The amount of data being processed

• Variety – The different kind of data being used

• Velocity – The speed that data is process and analyze

• Veracity – The accuracy of data

Challenges in handling business

 Lack of proper understanding of Big Data - Companies fail in their Big Data initiatives due to
insufficient understanding. Data professionals may know what is going on, but others may
not have a clear picture.
 Data Growth Issues - One of the most pressing challenges of Big Data is storing all these
huge sets of data properly.
 Confusion while Big Data tools selection - Companies often get confused while selecting the
best tool for Big Data analysis and storage.
 Lack of proper data professionals - To run these modern technologies and Big Data tools,
companies need skilled data professionals.
  Securing Data – Securing these huge sets of data is one of the daunting challenges of Big
Data.
 Integrating Data from a Variety of Sources - Data in an organization comes from a variety of
sources.

Big Data Investment by Numbers

 Refers to the amount of money being invested in the acquisition and analysis of large
volumes of data.

Big Data Market Worth

 The big data market is worth $56 billion. This is based on the market’s annual revenue in
2020.

Companies Use Big Data Analytics

 24% of companies use big data analytics. While 97.2% of companies say they’re investing in
big data and AI projects, just 24% describe their organizations as data-driven.

Big Data Provider

 Typically have the infrastructure and technology in place to collect, process and analyze
large amounts of data in real-time.

Top Big Data Providers in the World

1. N-iX

2. ScienceSoft

3. FAYRIX
FRAMEWORK FOR BUSINESS ANALYTICS
The process of turning raw data into business action is the framework for Business Analytics

There are 3 steps in turning data into analytics

Data Extraction - Refers to the process of retrieving data from one format into a more useful format
for further processing

2 Types of Data Sources

o Digital Data – One of the most common sources of data in modern time
o Physical Data – Usually exist in physical media

Data Warehousing - It is the place where companies store their valuable data assets including
customer data, sales data, and employee data and so on

5 Features of Data Warehouse

o Subject Oriented
o Integrated
o Time Relevant
o Non volatile
o Summarize

Extract, Transform, or Load Processes (ETL) - It is the process that extracts the data from different
source system

Extraction – Raw data is copied or exported from source location to a staging area during
data extraction.

Transform – In this stage, raw data undergoes data processing. In this first step, the data is
processed and consolidated for its intended analytical use case.

Load – The converted data is moved from the staging area into the target data warehouse in
this final stage.

Three (3) types of Analytics

Descriptive – Is not used to draw inferences or make predictions about the future from its
findings; rather it is concerned with representing what has happened in the past.
Analysis of Historical Data using two (2) key methods
o Data Aggregation
o Data Mining
- which are used to uncover trends and patterns
Predictive – A more advanced method of data analysis that uses probabilities to make
assessments of what could happen in the future.
Prescriptive – shows companies the raw results of their potential actions, prescriptive
analytics shows companies which option is the best.
Data Sources and Collection

– Data Source is a vital component that provides raw data for analysis

– A Data Source is a location or system that stores and manage data.

Data Sources Types

o Machine Data Sources - The machine data source is created on

the client machine, be it a computer, a phone, an Internet of
things, or another device.
 They can be further categorized
A. User data sources
B. System data sources

o File Data Sources – File Data Sources are not assigned to

machines, applications, systems, or users

Data Collection

– Data collection is the process of collecting and evaluating information

– It is an essential phase in all types of research, analysis, and decision-making

Methods of Collecting Data

1. Interviews

2. Questionnaires and Surveys

3. Observations

4. Focus Groups

Data Processing and Cleaning

– Data preprocessing involves transforming raw data to well-formed data sets so that data
mining analytics can be applied.

Processing Involves

o Data Validation – Assess whether the data in question is both

complete and accurate
o Data Imputation – Correct errors and input missing values

Data in Real World is Dirty

- Incomplete
- Noisy
- Inconsistent
Major task in Data Processing

Data Integration – Data integration is the process of combining data from different sources
into a single, unified view.

Data Transformation – Data transformation is the process of converting, cleansing, and

structuring data into a usable format

Data Cleaning - Data cleaning is the process of fixing or removing incorrect, corrupted,
incorrectly formatted, duplicate, or incomplete data within a dataset.

How to Clean Data?

1. Remove Duplicate or irrelevant Observation

2. Fix Structural Errors

3. Filter out unwanted outliers

4. Handle Missing Data

5. Validate your data

Data Reduction – Data reduction is a technique used in data mining to reduce the size of a
dataset while still preserving the most important information.
DATA QUALITY AND DATA GOVERNANCE
Data – Data is a critical asset for organizations in the modern digital age. Two key aspects of
managing data effectively are Data Quality and Data Governance

Focused on ensuring the data adheres to our data quality dimensions

5 Key Dimension of Data Quality

 Complete
 Reliable
 Accurate
 Timely
 Consistent

It is a set of policies, processes, and standards that ensure the effective management and use of an
organization's data assets.

5 Key Components of Data Governance

 Policies
 Procedures
 Data Stewards
 Data Linage
 Data Security

Machine Learning - learning is a branch of artificial intelligence (AI) and computer science which
focuses on the use of data and algorithms to imitate the way that humans learn, gradually improving
its accuracy.

Types of Machine Learning

1. Supervise Learning - Supervised learning is one of the most basic types of machine learning.

Supervised learning algorithms are used for several tasks, including the following:

Binary classification - Divides data into two categories.

Multiclass classification - Chooses between more than two types of answers.

Ensembling - Combines the predictions of multiple ML models to produce accurate

prediction.

Regression modeling - Predicts continuous values based on relationships within data.

2. Unsupervised Machine Learning – Unsupervised machine learning holds the advantage of being
able to work with unlabeled data.

Unsupervised learning algorithms are good for the following tasks:

Clustering – Splitting the data set into groups based on similarity using clustering algorithms.

Anomaly detection – Identifying unusual data points in a data set using anomaly detection

algorithms.
 Association rule – Discovering sets of items in a data set that frequently occur together
using

association rule mining.

Dimensionality reduction – Decreasing the number of variables in a data set using

dimensionality reduction techniques.

3. Semi-supervised learning – Semi-supervised learning comprises characteristics of both supervised

and unsupervised machine learning. It uses the combination of labeled and unlabeled datasets to
train its algorithms.

Semisupervised learning can be used in the following areas, among others:

Machine translation – Teaches algorithms to translate language based on less than a full

dictionary of words.

Fraud detection - Identifies cases of fraud when there are only a few positive examples.

Labeling data - Algorithms trained on small data sets learn to apply data labels to larger sets

automatically.

4. Reinforcement learning – Reinforcement learning directly takes inspiration from how human
beings learn from data in their lives.

It features an algorithm that improves upon itself and learns from new situations using a trial-and-
error method. Favorable outputs are encouraged or ‘reinforced’, and non-favorable outputs are
discouraged or ‘punished’.

Reinforcement learning is often used in the following areas:

Robotics – Robots learn to perform tasks in the physical world.

Video gameplay – Teaches bots to play video games.

Resource management – Helps enterprises plan allocation of resources

Business Analytics – Business analytics is a fascinating field that harnesses the power of data and
statistical methodologies to decipher and make sense of crucial business information.

ANALYTICS TOOLS AND SOFTWARE

Analytics Tools and Software – It refers to a broad category of applications that enable
organizations to collect, process, and analyze data to gain insights and make informed decisions.

Web Analytic Tools – These tools help website owners and marketers understand the performance
of their websites and make informed decisions to improve user experience and achieve their
business goals.
Business Intelligence Tools – BI are software applications that are used to analyze raw data and
convert it into actionable insights for businesses.

Predictive Analytic Tools – Are software applications and techniques that use historical data to
predict future outcomes and trends

Big Data Analytic Tools – Are software applications and platforms that are specifically designed to
process and analyze large and complex data sets commonly referred to as big data.