Business Analytics (22-23)

Question & Answer

Q.1 Define Business Analytics. Discuss the Need and Components of Business Analytics
with relevant examples

Ans. Business Analytics refers to the process of using statistical and quantitative methods to
gather insights and make data-driven decisions for a business. It involves gathering,
processing, and analyzing large sets of data in order to identify trends and patterns that
can be used to make informed business decisions. This can help companies to
optimize their operations, improve profitability, and gain a competitive edge in their
respective industries. The need for business analytics is becoming increasingly
important in today's business landscape, as companies are producing more data than
ever before. With the rise of big data, businesses are able to gather vast amounts of
information about customer behavior, market trends, and operational efficiency.
However, the challenge is to make sense of this data and turn it into actionable insights
that can drive business growth.

The components of business analytics may include the following:

1. Data collection: The first step in the business analytics process is to gather
relevant data from various sources such as databases, social media platforms,
customer reviews, and surveys.

2. Data analysis: The collected data is analyzed using statistical models and
techniques to identify patterns and trends. This can help to identify areas for
improvement, risks, and opportunities for growth.

3. Data visualization: Once the data has been analyzed, it is presented in a visual
format such as graphs, charts, and diagrams to make it easier to interpret and
communicate.

4. Predictive modeling: Business analytics can be used to develop predictive

models that can forecast future trends and outcomes, based on historical data.

5. Decision making: The insights gained from the business analytics process can
help businesses make informed decisions about marketing strategies, product
development, operational efficiency, and more.
 For example, a retail company may use business analytics to analyze customer
data from their e-commerce website and identify which products are selling the
most, which pages on the website receive the most traffic, and how long visitors
are spending on each page. This information can then be used to optimize the
website to improve sales and customer engagement. In another example, a
manufacturing company may use business analytics to analyze production data
to identify inefficiencies in the production process and optimize the supply chain
to reduce costs and improve product quality. Overall, the use of business
analytics can help companies to stay ahead of the competition by making more
informed decisions based on data-driven insights.

Q.2 How can business managers use the Descriptive, Predictive and Prescriptive
Analytics for making better business decisions? Discuss with examples.

Ans. Descriptive Analytics:

Descriptive analytics uses historical data to identify patterns and trends. This
type of analytics helps business managers to understand what happened in the
past and why it happened. Business managers can use this information to
optimize their existing strategies and processes. For example, a retail business
manager can use descriptive analytics to understand which products are selling
the most in their store. They can also use it to identify the most profitable time of
the day or week to open their store.

Predictive Analytics: Predictive analytics uses statistical algorithms and

machine learning techniques to predict future outcomes based on historical data.
This type of analytics helps business managers to make strategic decisions
based on anticipated future events. For example, a manufacturing business
manager can use predictive analytics to forecast the demand for their products.
They can also predict the impact of external factors such as economic changes,
political events, and weather. This can help them to adjust their production plans
accordingly.

Prescriptive Analytics:

Prescriptive analytics uses data-driven insights to recommend the best course of

action for a given situation. This type of analytics helps business managers to
make proactive and informed decisions. For example, an e-commerce business
manager can use prescriptive analytics to recommend the best pricing strategy
 for their products based on factors such as customer behavior, market trends,
and competition. They can also suggest the most effective channels for
marketing and advertising their products. In conclusion, business managers can
use descriptive, predictive, and prescriptive analytics to gain insights and make
data-driven decisions. By using these analytics tools, they can optimize their
strategies, improve operational efficiencies, and enhance customer experiences.

Q.3 "Define and list the important differences between OLTP and OLAP operations
and uses for business purposes. List some Data models for OLTP and OLAP."

Ans. OLTP (Online Transaction Processing) and OLAP (Online Analytical Processing)
are two types of database management systems having different architectures,
operations, and uses.

The main differences are:

1. Purpose:
OLTP is designed to process high volumes of transactional data, whereas
OLAP is intended for complex queries and analysis of large datasets.

2. Data Size:
OLTP databases typically hold smaller amounts of data, while OLAP
databases may hold vast quantities of data.

3. Workload:
OLTP caters to frequently accessed data, while OLAP responds to ad-hoc
queries and summary data.

4. Data Structure:
OLTP databases have atomic data structures, while OLAP databases have
dimensional data structures.

Using OLTP for business purposes involves managing day-to-day transactions,

such as customer orders, invoice processing, and inventory control. In contrast,
OLAP supports analytics and decision-making, for instance, analyzing sales
 trends or comparing performance across regions. Common data models for
OLTP include Hierarchical, Relational, and Network data models. OLAP systems
often use Star Schema, Snowflake Schema, or the Hybrid Schema model. The
choice of which database system to use depends on the organization's specific
needs and data structure, as well as the type of data and analysis required.

LTP vs. OLAP: side-by-side comparison

OLTP OLAP

Characteristics Handles a large number of small Handles large volumes of data with
transactions complex queries
Query types Simple standardized queries Complex queries
Operations Based on INSERT, UPDATE, DELETE Based on SELECT commands to
commands aggregate data for reporting
Response time Milliseconds Seconds, minutes, or hours
depending on the amount of data to
process
Design Industry-specific, such as retail, Subject-specific, such as sales,
manufacturing, or banking inventory, or marketing
Source Transactions Aggregated data from transactions
Purpose Control and run essential business Plan, solve problems, support
operations in real time decisions, discover hidden insights
Data updates Short, fast updates initiated by user Data periodically refreshed with
scheduled, long-running batch jobs
Space Generally small if historical data is archived Generally large due to aggregating
requirements large datasets
Backup and Regular backups required to ensure Lost data can be reloaded from OLTP
recovery business continuity and meet legal and database as needed in lieu of regular
governance requirements backups
Productivity Increases productivity of end users Increases productivity of business
managers, data analysts, and
executives
Data view Lists day-to-day business transactions Multi-dimensional view of enterprise
data
User examples Customer-facing personnel, clerks, online Knowledge workers such as data
shoppers analysts, business analysts, and
executives
Database design Normalized databases for efficiency Denormalized databases for analysis
Q.4 Compare and Contrast the sources, storage, characteristics and limitations of
Unstructured and Structured Data with relevant examples

Ans. Structured data and unstructured data differ in several ways in terms of their sources,
storage, characteristics, and limitations.

Sources:

 Structured data: It is typically generated by machines or software systems. For

example, transactional data, log files, customer demographics, and financial
records.
 Unstructured data: It is generated by humans in various forms and formats. For
example, emails, social media posts, images, videos, audio recordings, and
documents.

Storage:

 Structured data: It can be stored in a database or a spreadsheet, and is organized in

tables and rows with specific fields and data types.
 Unstructured data: It can be stored in various types of files such as Word
documents, PDFs or image files. It is usually stored in a non-relational database or
a data lake.

Characteristics:

 Structured data: It is highly organized, easy to analyze, and easy to process through
automated tools such as machine learning algorithms. It is usually homogeneous
and consistent in format, making it easy to extract insights and make decisions
based on data analysis.
 Unstructured data: It is varied in format, volume, velocity, and complexity. It is
difficult to analyze and process because of its non-standardized nature. It may
contain rich contextual information that is difficult to process through traditional
methods.

Limitations:

 Structured data: Its limitations include scalability and flexibility, as structured formats
may not be able to accommodate new types of data or changes to data structures. It
 can also be limited in the amount of information it can capture, as it is often restricted to
predetermined fields or categories.
 Unstructured data: It is limited by its difficulty in processing and extracting insights. It is
also often more time-consuming to analyze as it requires more involved data
preparation and analysis.

Example:

A social media platform generates both structured and unstructured data. The structured
data may include user demographics, posts, likes, shares, and comments. The
unstructured data may include free-text comments, emojis, and multimedia files. The
platform can use the structured data to identify user preferences and patterns to improve
user experience and engagement. The platform can also use unstructured data to
understand users' sentiments and emotions towards various topics, products, or
campaigns. However, analyzing unstructured data may require more sophisticated data
analysis tools such as Natural Language Processing (NLP) and sentiment analysis tools.

Q.5 What is a Data Warehouse? Explain some of the important characteristics of Data
Warehousing.

Ans. A data warehouse is a large, centralized repository of data that is commonly used by
businesses to support decision-making processes. It is designed to store and manage
large volumes of data from a wide range of sources, and to enable fast and efficient
querying and analysis of that data. Here are some of the important characteristics of
data warehousing:

1. Subject-oriented: Data warehouses are organized around specific subject areas, such as
sales, finance, or marketing. This allows users to focus on the data that is relevant to
their needs.

2. Integrated: Data warehouses bring together data from various sources and integrate it into
a unified, consistent format. This allows users to obtain a complete view of the data,
regardless of where it came from.

3. Time-variant: Data warehouses include historical data as well as current data, which allows
users to analyze trends and identify patterns over time.
4. Non-volatile: Data warehouses are designed for read-only access, which means that data
cannot be modified once it has been loaded. This ensures data integrity and
consistency over time.

Q.6 What is a Business Report? What are the main characteristics of a Business Report?

Ans. A business report is a document that presents factual information regarding a specific
business aspect to a target audience. It provides an analysis of a particular problem,
presents findings and conclusions, and recommends necessary actions. Business
reports are commonly used to make informed decisions, measure performance, and
solve problems.

The main characteristics of a business report include:

1. Purpose - A business report should have a clear purpose that is well-defined and specific.

2. Audience - A business report should be tailored to its intended audience, using language
and terminology that is easily understood by the targeted audience.

3. Structure - A business report typically follows a structured format and contains clear
headings and subheadings to identify the main sections of the report.

4. Objectivity - Business reports aim to present factual and unbiased information. It should
avoid making assumptions and should only rely on evidence-based data.

5. Conciseness - A business report should be concise and to the point, avoiding unnecessary
information that does not contribute to the report's main objective.

6. Ethical considerations - A business report must adhere to ethical considerations such as

confidentiality, integrity, and credibility. It should include proper citations and references
to avoid copyright violation.

Q.7 Define and explain the important differences between Data Visualization and Visual
Analytics.

Ans. Data visualization and visual analytics are two related but distinct concepts in data
analysis.
Here are the key differences between the two:

1. Definition:
Data visualization is the process of creating visual representations of data, such as
charts, graphs, and maps, to help people understand and interpret complex
information.
On the other hand, visual analytics is a more advanced form of data visualization
that involves interactive tools and techniques to help users explore and analyze data
in real-time.

2. Purpose:

Data visualization is mainly used for communicating data insights to a broader

audience. It is often used to highlight patterns and trends in the data to help
decision-makers make informed choices.

Visual analytics, on the other hand, is much more focused on discovering insights
and answering specific questions with data.

3. Tools:
Data visualization uses static visuals such as bar charts, line charts, and pie
charts, etc., which are meant to convey a clear and straightforward message.
In contrast, visual analytics employs dynamic and interactive tools such as
dashboards, heat maps, and filters, which allow users to ask new questions and drill
down into the data to discover new insights.
4. Users:
Data visualization is designed for anyone who needs to quickly grasp essential
information from complex data.
Visual analytics, in contrast, is typically used by data analysts and researchers
who need to analyze and understand complex data sets in greater detail.

In summary, data visualization and visual analytics both play a critical role in data
analysis, but they serve different purposes and use different tools. Data visualization
is best suited for communicating and summarizing data quickly, while visual
analytics provides more in-depth insights by allowing the user to ask specific
questions and interact with the data in real-time.
 Q.8 List and explain the steps of the process of Data Mining. Discuss some business applications of
Data Mining

What is data mining?

Data mining is the process of sorting through large data sets to identify patterns and
relationships that can help solve business problems through data analysis. Data mining
techniques and tools enable enterprises to predict future trends and make more-informed
business decisions.

Data mining is a key part of data analytics overall and one of the core disciplines in data
science, which uses advanced analytics techniques to find useful information in data sets. At
a more granular level, data mining is a step in the knowledge discovery in databases (KDD)
process, a data science methodology for gathering, processing and analyzing data. Data
mining and KDD are sometimes referred to interchangeably, but they're more commonly
seen as distinct things

The process of data mining involves the following steps:

 Business Understanding: This involves identifying and defining the business problem that needs to
be solved using data mining techniques. It also involves identifying the objectives of the analysis.

 Data Understanding: This step involves understanding the data that will be used for the analysis.
This includes determining the quality of the data and the completeness of the dataset.

 Data Preparation: In this step, data is cleaned, transformed and pre-processed to make it more
suitable for analysis.

 Data Modeling: This step involves the use of statistical and machine learning algorithms to build and
test predictive models.

 Results Evaluation: The output of the modeling process is evaluated using various metrics such as
accuracy, precision and recall.

 Deployment: Finally, the model is deployed as a solution for the business problem.
 Some business applications of data mining include:

 Customer Segmentation: This involves dividing customers into groups based on their
behavior, preferences, and demographics. This helps businesses create targeted marketing
campaigns.

 Fraud Detection: Data mining can help identify patterns of fraudulent behavior in financial
transactions, such as credit card fraud or insurance fraud.

 Predictive Maintenance: Data mining can be used to analyze data from sensors to predict
when machines or equipment are likely to fail, allowing organizations to schedule maintenance
and avoid downtime.

 Market Basket Analysis: This involves identifying which products are frequently bought
together. This information can be used to optimize store layouts and promotions.

 Churn Analysis: This helps businesses identify customers who are likely to leave and take
action to retain them.

In summary, data mining is an important tool for businesses that want to gain insights from their
data. By following the steps outlined above, organizations can use data mining to solve a wide
range of business problems.

Q.9 Define Text Analytics and Text Mining. List and explain some of the practical applications of
Text Mining in the areas of Marketing, Security, Bio-Medical and Academics.

Ans. Text analytics and text mining are two related fields that involve the use of statistical and machine
learning methods on large volumes of textual data in order to extract useful information and insights.
Text analytics refers to the process of analyzing unstructured text data, such as social media
messages, customer reviews, news articles, and emails, to identify patterns and trends. This
includes tasks such as sentiment analysis, topic modeling, and entity recognition. Text mining, on
the other hand, is a broader term that encompasses the process of extracting useful knowledge
from large volumes of textual data, including text analytics methods as well as techniques from
natural language processing, machine learning, and information retrieval.

Some practical applications of text mining in different areas are:

 Marketing: Text mining can be used to analyze social media data in order to understand
customers' opinions and preferences about products or services. Sentiment analysis can be
used to understand how customers perceive a brand, while topic modeling can be used to
 identify popular topics of discussion, allowing companies to tailor their marketing campaigns
accordingly.
 Security: Text mining can be used in security applications to detect anomalous behavior in
communications, such as emails or instant messages, by identifying patterns of suspicious
keywords or phrases.
 Bio-medical: Text mining can be used in biomedical research to analyze large volumes of
scientific literature and extract relevant information about genes, diseases, and treatments.
This can be used to identify potential drug targets or to develop new therapies.
 Academics: Text mining can be used in academic research to analyze large volumes of
academic publications and extract insights regarding trends in research, the impact of
funding, and the evolution of scientific ideas. This can help researchers to identify emerging
research fields and topics.

Q. 10 Discuss the characteristics of Big Data. How Big Data can help business managers make effective
decisions for their organizations? Explain with practical examples

Ans. The characteristics of big data are often described using the 4Vs:

1. Volume refers to the vast amount of data that is generated and available for analysis. Big data is
typically measured in terabytes or petabytes.

2. Velocity refers to the speed at which data is generated and needs to be processed. Big data
often comes in real-time or near-real-time, requiring fast processing and analysis.

3. Variety refers to the different types and sources of data. Big data can come from a wide range of
sources, including structured and unstructured data, social media, sensors, and more.

4. Veracity refers to the accuracy and trustworthiness of the data. Big data can be messy and
incomplete, requiring careful cleaning and processing to ensure accuracy.

Big data can help business managers make effective decisions for their organizations by providing
insights into customer behavior, market trends, and operational efficiency.

For example:

1. Retail companies can use big data to analyze customer purchase history and behavior to
understand their preferences and tailor their marketing campaigns accordingly. This can lead to
increased customer loyalty and sales.

2. Healthcare organizations can use big data to analyze patient data and clinical trials to develop
more effective treatments and drugs, improving patient outcomes and reducing costs.

3. Logistics companies can use big data to optimize their routes and delivery schedules, reducing
fuel costs and improving customer satisfaction. Overall, big data can help businesses make data-
driven decisions, improve operations, and stay ahead of the competition by leveraging the vast
amount of data available in today's world.
Q.11 Define Business Performance Management. Explain the concept and distinguishing features
of Key Performance Indicator and Dashboards.

Ans. Business Performance Management (BPM) refers to the set of processes, methodologies,
and technologies deployed by organizations to monitor and align their business strategies
with their day-to-day operations.

The primary goal of BPM is to monitor and improve business performance by measuring
and analyzing key data points and operational metrics.

Key Performance Indicators (KPIs) are the quantitative metrics that organizations use to
measure progress towards their strategic goals. These metrics are selected based on their
relevance, measurability, and alignment with business objectives. KPIs help organizations to
evaluate and improve their performance, identify areas for improvement, and make data-
driven decisions.

Dashboards, on the other hand, are visual representations of data that provide a quick and
user-friendly view of KPIs, metrics, and other performance data. Dashboards are designed
to provide real-time insight into business performance across departments and functions.
They enable managers and decision-makers to evaluate data trends, identify opportunities
for improvement, and make informed decisions to drive organizational growth and success.

In summary, KPIs and dashboards are important components of BPM that help
organizations measure and visualize performance data to drive continuous improvement
and growth. KPIs help define what to measure, while dashboards help visualize this data to
enable better decision making.