Unit I

Data Analytics Overview

What is Data Analytics?
• Analytics- Analytics is the discovery , interpretation, and communication of
meaningful patterns or summary in data.
• Analytics is not a tool or technology, rather it is the way of thinking and
acting on data.
• Data Analytics (DA) is the process of examining data sets in order to draw
conclusion about the information it contains
• Data analytics converts raw data into actionable insights.
• It includes a range of tools, technologies, and processes used to find trends
and solve problems by using data.
• Data analytics can shape business processes, improve decision-making, and
foster business growth.
What is Data?
• Data- Data is a set of values of qualitative or quantitative variables. It
is information in raw or unorganized form. It may be a fact, figure,
characters, symbols etc.
• Information- Meaningful or organized data is information, comes
from processing data
What Kinds of Data are Collected?
• First-party data: The data a company collects about its customers.
• Second-party data: The data a company gets from a known
organization that collected it originally.
• Aggregated data: The data a company buys from a marketplace.
Business Analysts VS Data Analysts
• The difference is what they do with it. Business analysts use data to
make strategic business decisions.
• Data analysts gather data, manipulate it, identify useful information
from it, and transform their findings into digestible insights.
Evolution of Data Analytics
• The use of data to make decisions started as business analytics in the
mid 1950’s.
• Was adopted because it could generate and capture large amount of
information and detect patterns from it faster than a human could do
it manually without the assistance of any technology
Analytics era 1.0
• The first era is also known as the era of ‘Business Intelligence’.
• Analytics 1.0 was a time of real progress in gaining an objective, deep
understanding of important business phenomena and giving managers the
fact-based comprehension to go beyond intuition when making decisions.
• For the first time, data about production processes, sales, customer
interactions, and more were recorded, aggregated, and analyzed.
• Data sets were small enough in volume and static enough in velocity to be
segregated in warehouses for analysis.
• Analysts spent much of their time preparing data for analysis and relatively
little time on the analysis itself- analysis was painstaking and slow, often
taking weeks or months to perform
Analytics era 2.0
• Also known as the era of ‘Big Data’.
• The analytics 1.0 era lasted until the mid- 2000’s and as analytics entered
the 2.0 phase, the need for powerful new tools and the opportunity to
profit by providing them quickly became apparent.
• Example: LinkedIn, created numerous data products, including People You
May Know, Jobs You May Be Interested In, Groups You May Like, Companies
You May Want to Follow, Network Updates, and Skills and Expertise and to
do so, it built a strong infrastructure and hired smart, productive data
scientists.
• Innovative technologies of many kinds had to be created, acquired, and
mastered in this era. Big data could not fit or be analyzed fast enough on a
single server, so it was processed with Hadoop,
Analytics era 3.0
• Analytics 3.0 marks the stage of maturity where leading organizations
realize measurable business impact from the combination of
traditional analytics and big data.
• High-performing companies will embed analytics directly into
decision and operational processes, and take advantage of machine-
learning and other technologies to generate insights in the millions
per second rather than an “insight a week or month.”
• Data architectures (i.e., Hadoop) will augment the traditional
approaches removing scale barriers.
Current scenario of Analytics and Future
projections
• Currently, 89% of business leaders believe Big Data will revolutionize
the way businesses are operated, the same way internet did and 83%
of them have pursued Big Data projects in order to gain a competitive
edge.
Trends pushing the frontiers of Data Analytics
• Current advancements in technology are paving the way for the
future of analytics.
• Customers are seeking integrated hardware and software for analytics
workloads,
• R- open source programming Language- for computational statistics and
visualization is becoming pervasive,
• Visual Interfaces are making Advanced Analytics more accessible to business
users
• Data Visualization is becoming a business requirement,
• Organizations are infusing data analytics into all decision making activities
• Companies are turning to PMML- Predictive Model Markup Language- a
standard for statistical and data mining models
Future of Big Data or Analytics 3.0
• It is predicted that the
• Volumes of data will continue to grow,
• SQL and Spark will continue to improve the way data is analyzed
• Prescriptive analytics will be built in to business analytics software,
• Real-time streaming insights into data will play a major role,
• Algorithm markets will emerge,
• Cognitive computing and analytics will emerge as game changers
• More companies will drive value and revenue from their data
• Businesses applying analytics will witness $430 Bn in productivity benefits
over their competitors not using data analytics by 2020
• fast and actionable data will replace big data
Overview of Business Analytics
Pyramid of Analytics
Definition
• Business analytics is a set of statistical and operations research
techniques, artificial intelligence, information technology and
management strategies used for framing a business problem,
Collecting data, and analysing the data to create value to
organizations.
Types of Data Analytics
Descriptive Analytics
• Descriptive analytics is the simplest form of analytics that mainly uses
simple descriptive statistics, data visualization techniques, and
business related queries to understand past data.
• One of the primary objectives of descriptive analytics is innovative
ways of data summarization.
• Descriptive analytics is used for understanding the trends in past data
which can be useful for generating insights.
Descriptive Analytics
Descriptive Analytics
• Descriptive analytics using visualization identifies trends in the data
and connects the dots to gain insights about associated businesses.
• In addition to visualization, descriptive analytics uses descriptive
statistics and queries to gain insights from the data.
Diagnostic Analytics
• Diagnostic analytics is a form of advanced analytics that examines
data or content to answer the question, “Why did it happen?”
• It is characterized by techniques such as drill-down, data discovery,
data mining and correlations.
Predictive Analytics
• Predictive analytics is the process of using data to forecast future
outcomes.
• The process uses data analysis, machine learning, artificial
intelligence, and statistical models to find patterns that might predict
future behavior.
• It aims to predict the probability of occurrence of a future event such
as forecasting demand for products/services, customer churn,
employee attrition, loan defaults, fraudulent transactions, insurance
claim, and stock market fluctuations.
Predictive Analytics
Prescriptive Analytics
• Prescriptive analytics is the use of advanced processes and tools to
analyze data and content to recommend the optimal course of action
or strategy moving forward. Simply put, it seeks to answer the
question, “What should we do?”
Overview
BIG DATA ANALYTICS
• Big data is a class of problems that challenge existing IT and
computing technology and existing algorithms.
• Traditionally, big data is defined as a big volume of data (in excess of 1
terabyte) generated at high velocity with high variety and veracity.
Importance and Benefits of Data Analytics
• Increased Efficiency and Productivity
• Data analytics enables organizations to increase efficiency and productivity by
automating and streamlining processes, maximizing resource allocation, and
minimizing manual labor. Businesses can streamline their workflows by
locating bottlenecks and getting rid of duplication.
• Enhanced Customer Experience
• By giving organizations useful insights into customer behavior, preferences,
and needs, data analytics enables businesses to identify areas where they can
improve their customer experience–such as lowering wait times, enhancing
customer service, or streamlining user interfaces. Data analytics thus helps
businesses tailor their offerings to meet consumers’ unique needs, thus
forging closer ties with them and fostering greater customer loyalty.
Importance and Benefits of Data Analytics
• Improved Risk Management
• Businesses can find patterns and correlations in data from various sources
that point to potential risks. Data analytics can, for instance, assist companies
in identifying potential fraud, online threats, or operational risks. Businesses
can also take preventative action to mitigate potential risks by monitoring
data in real-time.
• Competitive Advantage
• Businesses can gain a competitive edge using data analytics to make more
informed, data-driven decisions. Analyzing data from various sources allows
businesses to understand market trends, consumer behavior, and competitor
activities. Businesses can use this information to improve their strategies,
spot new opportunities, and set themselves apart from the competition.
Different Applications of Analytics in Business
• Applications of Analytics in Business
• Business Analytics assists financial managers in managing their finances
optimally and then taking relevant measures. Implementing business
analytics in various sectors of finance(such as investment banking and
budgeting) can prove to be highly fruitful for the finance industry.
• It helps in building future strategies for a new product by observing similar
products and methodologies.
• In addition to this, business analytics can also be used to predict future loan
defaulters.
Different Applications of Analytics in Business
• HUMAN RESOURCES MANAGEMENT (HRM)
• Human Resource Management is the process or practice of managing, hiring,
organizing, training, and directing people in an organization in a strategic
manner. Human Resources (or HR) professionals use business analytics in
several ways.
• It helps them in analyzing large amounts of data to understand employees’
needs and grievances and therefore assist them accordingly.
• Business analytics can be used by HR in determining the right candidates, the
expected salaries as well as the trending retention rates in the industries.
• Moreover, HR professionals can leverage business analytics to forecast the
trajectory of the organization and thus efficiently design appropriate training
and development programs for trainees or employees.
Different Applications of Analytics in Business
• PRODUCTION AND INVENTORY MANAGEMENT
• Management is a key element in every organization. It aims to enhance the
profits and productivity of an organization all the while trying to reduce
overall costs.
• Business Analytics serves as a great tool for management and manufacturing.
It is involved in every phase of product development. It supports analyzing
the inventory measures and designing business solutions that are most
suitable for products.
• It can help determine the costs and gauge the expected sales of products.
This way the organizations can adapt to the latest styles and opportunities in
the industry.
• Hence, business analytics stands as a boon for the diverse sectors of
management, be it inventory management or product management.
Different Applications of Analytics in Business
• CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
• Customer Relationship Management or CRM is the process of building and
managing the organization’s relationships as well as interactions with
customers.
• Business analytics can be used in customer relationship management to
understand the customer base better and therefore, implement
corresponding strategies. This helps significantly drive sales and amplifies the
organization’s profits.
• Customers’ purchasing patterns, needs, buying behaviors, issues, feedback,
and all the other indicators can be obtained and analyzed through business
analytics methodologies. These indicators can then be used to foster long-
lasting and loyal relationships between clients and the organization.
Different Applications of Analytics in Business
• MARKETING
• Marketing, when combined with business analytics can prove to be one of the
best strategies an organization can implement.
• Business analytics helps the organization to know its users, their needs,
behaviors, and purchasing styles to design and modify suitable plans and
schemes.
• Sales can be optimized and user experience can be enhanced. Business
analytics can help marketers know their target audience and their interest.
• It can also be used to evaluate and determine how well a product or a
marketing strategy is performing in the market. Considering these factors,
organizations can modify their strategies and implement better planning.
• A Guide: Text Analysis, Text Analytics & Text Mining | by Michelle
Chen | Towards Data Science
Text Analytics
• Text analysis is the process of using computer systems to read and
understand human-written text for business insights. Text analysis
software can independently classify, sort, and extract information
from text to identify patterns, relationships, sentiments, and other
actionable knowledge.
Text Analytics
text analysis vs text mining vs text analytics
• Text analysis, text mining and text analytics are one and the same,
and are often used interchangeably.
difference between text analysis and natural
language processing (NLP)
• Text analysis is about examining large collections of text to generate
new and relevant insights.

• Natural language processing (NLP), or more specifically, natural

language understanding (NLU), helps machines “read”, “understand”
and replicate human speech.
difference between text analysis and natural
language processing (NLP)
• In the process of text analysis, various analysis methods are used to
derive insights, and natural language processing is one of them. NLP is
actually an interdisciplinary field between text analysis,
computational linguistics, AI and machine learning.
• The key difference between text analysis and NLP lies in the goals of
each field.
Web Analytics
• Web analytics is the process of analyzing the behavior of visitors to a
website. This involves tracking, reviewing and reporting data to
measure web activity, including the use of a website and its
components, such as webpages, images and videos.
Uses
• Determine the likelihood that a given customer will repurchase a
product after purchasing it in the past.
• Personalize the site to customers who visit it repeatedly.
• Monitor the amount of money individual customers or specific groups
of customers spend.
• Observe the geographic regions from which the most and the least
customers visit the site and purchase specific products.
• Predict which products customers are most and least likely to buy in
the future.
Web Analytics Steps
Two main categories of web analytics
• Off-site web analytics
• The term off-site web analytics refers to the practice of monitoring visitor
activity outside of an organization's website to measure potential audience.
• Off-site web analytics provides an industrywide analysis that gives insight into
how a business is performing in comparison to competitors.
• It refers to the type of analytics that focuses on data collected from across the
web, such as social media, search engines and forums.
Two main categories of web analytics
• On-site web analytics
• On-site web analytics refers to a narrower focus that uses analytics to track
the activity of visitors to a specific site to see how the site is performing.
• The data gathered is usually more relevant to a site's owner and can include
details on site engagement, such as what content is most popular.
• Two technological approaches to on-site web analytics include log file analysis
and page tagging.
Web
Analytics
Tools
• Google
Analytics.
• Optimizely
Skills for Business Analytics
• A good communicator
• Inquisitive
• A problem solver
• A critical thinker
• A visualizer
• Both detail-oriented and a big picture thinker