BUSINESS ANALYTICS

INTRODUCTION

Each month more than 197 million people around the world get on their devices and visit
Amazon.com

India's digital commerce revolution Flipkart has registered customer base of more than 400
million

TCS is a top employer globally, and our 556,986 employees represent 156 nationalities across 46
countries.

INFOSYS total no of employees: 259,619

HUL is the market leader in Indian consumer products with 700 million Indian consumers using
its products.

SBI has 41 crore savings bank accounts

HDFC has more than over 4.90 crore customers.

The country with the most Facebook users is India with over 0.34 billion active users

Facebook is the largest social media platform globally with 2.85 billion monthly active users
worldwide.

YouTube follows with 2.2 billion users world wide

MEANING

Business Analytics is the process by which businesses use statistical methods and technologies
for analyzing historical data in order to gain new insight and improve strategic decision-making.

DEFINITION

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”.

Data-driven companies treat their data as a business asset and actively look for ways to turn it
into a competitive advantage. Success with business analytics depends on data quality, skilled
analysts
Business analytics implies a narrower focus and has functionally become more prevalent and
more important for organizations around the globe as the overall volume of data has increased.

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.

USES OF BUSINESS ANALYTICS:

A) Finance

Business Analytics can help financial organizations to optimize budgeting, determine

creditworthiness in case of a loan, and also suggest the chances of a customer defaulting on a
loan. Business Analytics plays an important role in raising red flags in time.

B) Credit Card business

Business Analytics helps in extracting crucial information hidden behind the credit and debit
transactions and lets the business know, the spending habits, lifestyle preferences, and financial
standing, raising red flags wherever there is a probability of loss of business.

Credit card companies can decide on the fly which customers they can extend a line of credit to
and by how much.

C) CRM- Customer Relationship Management:

Business analytics built into today’s CRM systems, enable businesses to gain deep insights into
demographics, socio-economic information and lifestyle of their customer groups and what
would be the best fit strategy to retain and increase the customer base.

D) Manufacturing

Equipment downtime, delays in raw material supply, the inventory levels to maintain, and the
maintenance expense of machines among others.
Optimum levels of inventory to maintain and how much to make up for equipment downtime
and keep production at optimum levels and much more.

E) Marketing

Business analytics plays an important role in determining the effectiveness of marketing

campaigns by generating insights on which kind of campaign is most effective and which one is
most penetrative in the market.

How much each type of campaign should be invested in to gain maximum benefits and cut losses

F) E Retailing

Today the e-retailing business is expanding like never before with more and more people
preferring to order online than visit brick-and-mortar stores with covid pandemic attenuating it
further.

Business analytics and more recently Data Science comes to the rescue. The better a business
applies its strategy basis the outcomes of Business Analytics the better it will fare in the market.

The main components of a typical business analytics dashboard include:

DATA AGGREGATION: prior to analysis, data must first be gathered, organized, and filtered.

Data aggregation is the process where data is collected and presented in a summarized format for
statistical analysis

For example, a store may want to look at the sales performance for different regions, so they
would aggregate the sales data based on region.

Data Aggregation is done with mathematical functions:

Sum : the query for the sum of sales of a product in a month.

Average: Average sales for the past 6 month

Maximum – Maximum amount of sales in past 6 month

Minimum – Lowest amount of sales in past 6 month.

Count – Counting on each category

DATA MINING: Data mining for business analytics sorts through large datasets using
databases, statistics, to identify trends and establish relationships.

Simply put, data mining is the process that companies use to turn raw data into useful
information. It pulls out information from data sets and compares it to help the business make
decisions.

DATA MINING USAGES:

Classification: using attributes of data to move them into a specific categories, using attributes
of data to move them into categories. Supermarket data mining may use classification to group
the types of groceries customers are buying, like produce, meat, bakery items,

Clustering. Cluster groups are less structured than classification groups, making it a more simple
option for data mining. In the supermarket example, a simple cluster group could be food and
non-food items instead of the specific classes.

Association Rule: In the supermarket example, this may mean that many customers who buy a
specific item may also buy a second, related item. Organizing products in online stores.

Regression analysis: Regression is used to plan and model, identifying the likelihood of a
specific variable. The supermarket may be able to project price points based on availability,
consumer demand, and their competition.

Association and Sequence Identification: the identification of predictable actions that are
performed in association with other actions or sequentially

TEXT MINING: explores and organizes large, unstructured text datasets for the purpose of
qualitative and quantitative analysis

Widely used in knowledge-driven organizations, text mining is the process of examining large
collections of documents to discover new information or help answer specific research questions.

FORECASTING: analyzes historical data from a specific period in order to make informed
estimates that are predictive in determining future events or behaviors

PREDICTIVE ANALYTICS: Predictive business analytics uses a variety of statistical

techniques to create predictive models, which extract information from datasets, identify
patterns, and provide a predictive score for an array of organizational outcomes
OPTIMIZATION: once trends have been identified and predictions have been made,
businesses can engage simulation techniques to test out best-case scenarios

DATA VISUALIZATION: provides visual representations such as charts and graphs for easy
and quick data analysis

BA FOR CREATING COMPETITIVE ADVANTAGE:

Pricing ◦ setting prices for consumer and industrial goods, government contracts, and
maintenance contracts

Customer segmentation ◦ identifying and targeting key customer groups in retail, insurance, and
credit card industries

Merchandising ◦ determining brands to buy, quantities, and allocations

Location ◦ finding the best location for bank branches and ATMs, or where to service industrial
equipment

Social Media ◦ understand trends and customer perceptions; assist marketing managers and
product designers

SCOPE / TYPES OF BUSINESS ANALYTICS:

Descriptive analytics: the use of data to understand past and current business performance and
make informed decisions.

Predictive analytics: predict the future by examining historical data, detecting patterns or
relationships in these data, and then extrapolating these relationships forward in time.

Prescriptive analytics: identify the best alternatives to minimize or maximize some objective

EXAMPLE:

Most department stores clear seasonal inventory by reducing prices.

Key question: When to reduce the price and by how much to maximize revenue?

POTENTIAL APPLICATIONS OF ANALYTICS:

Descriptive analytics: examine historical data for similar products (prices, units sold, advertising,

Predictive analytics: predict sales based on price

Prescriptive analytics: find the best sets of pricing and advertising to maximize sales revenue.