Course Name : Business Analytics

Topic: Business Analytics Basic

Course Owner :
Prof. Asif Naikawadi

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 Contents
Unit 1 Business Analytics Basics:
Definition of analytics, Evolution of analytics, The Growing Role of
Business Analytics

Business analytics vs business analysis, Business intelligence vs Data

Science, Data Analyst Vs Business Analyst

Types of Analytics - Descriptive, Diagnostic, Predictive, Prescriptive

Concept of insights. Importance of data in business analytics, Differences

between data, information and knowledge, Quality of data, 5Vs of Big
Data, Big Data Collection and Ethics, Data sources and collection methods,
Data privacy, security, and ethical considerations.

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 Definition

Analytics:
Analytics is the process of discovering, interpreting, and
communicating significant patterns in data.
Business Analytics is the process of transforming data into
insights to improve business decisions.

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 The 4 eras of analytics: Evolution

• Analytics 1.0
• The practice as we recognize it started in the 1950s, with
individual companies collecting their own offline data and
manually analyzing it to look for ways to improve their
operations
• Data analyst’s role was mostly as a technician
• The work was slow, heavily manual, and only informed by
limited data sources.

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 Cambridge electrical system in 1950

Before computers, we relied on t-squares, rulers & ink.

Workers map Cambridge electrical system in 1950.

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 Evolution

• Analytics 2.0
• The start of the 2000s saw the era of early big data initiatives,
as computers and connectivity started to become pervasive
among businesses.
• Any business that was working with a digital infrastructure
could start digging into large data sets to find meaningful,
more timely insights.
• analysts became key personnel who could report on progress
and trends, and make recommendations based on the data
they were processing

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 Evolution

• Analytics 3.0
• The range of possible data sources grew hugely in the late
2000s and early 2010s, driven by the explosion of connected
devices, widespread data collection initiatives, and
increasingly intelligent analytics technologies
• In this era, organizations started to think critically about how
their data and analytics practice could translate into
meaningful change for employees, customers and business
processes.

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 4.0

• Analytics 4.0
• Analytics 4.0, though still in its early days, has seen
organizations adopt predictive analytics and advanced
decision simulations at scale
• sources into highly sophisticated analytics programs and
deploy largely automated decision-making tools using cloud
and big data technologies.
• Analytics 4.0 is enabling them to make intelligent, insight-
driven recommendations for how businesses can adapt their
market strategies, digital transformation initiatives, and more

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 Scope of Business Analytics

1)Data Collection and Management

2)Data Analysis
3)Predictive Modeling
4)Data Visualization
5)Decision-Making Support
6)Customer Behavior Analysis
7)Market Research
8)Inventory Management
9)Financial Forecasting

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 Scope of Business Analytics

10) Operations Optimization

11) Sales and Marketing Analysis
12) Supply Chain Optimization
13) Financial Analysis and Reporting
14) Human Resource Management and Analysis
15) Operations and Process Improvement

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Use cases of Business Analytics

Netflix
Content analysis: They analyze data to determine which content to produce and
license, including genre, budget, and target audience.

Customer behavior: They track viewing habits, search and browsing behavior,
and preferences to make recommendations and personalize the user experience.

Pricing and subscription: Netflix uses analytics to determine optimal pricing

and subscription plans, monitor customer churn, and understand the impact of
changes

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 Netflix

Marketing: They analyze the effectiveness of marketing campaigns and adjust

them accordingly.

International expansion: They use data to determine which markets to

expand into, what content to offer, and how to localize the user experience.

Overall, Netflix leverages analytics to drive informed decision-making and

optimize their operations, user experience, and revenue

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 Amazon

Amazon uses business analytics in several ways:

Sales and revenue: They analyze sales data to understand trends, customer
behavior, and revenue growth.

Inventory and supply chain: Amazon uses analytics to optimize inventory

levels, manage the supply chain, and ensure timely delivery of products.

Customer behavior: They track customer behavior, including browsing,

search, and purchase history, to make recommendations and personalize the
user experience.

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 Amazon

Pricing: Amazon uses data and analytics to determine optimal pricing for
products and to track competitor pricing.

Marketing: They analyze the effectiveness of marketing campaigns,

advertising, and promotions to make informed decisions about where to
allocate budget.

Fraud detection: Amazon uses analytics to detect fraudulent activity and

protect the security of customer data and transactions.
Overall, Amazon leverages analytics to drive informed decision-making and
optimize their operations, customer experience, and revenue.

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 Uber/Ola

Uber uses business analytics in several ways:

Demand forecasting: To predict demand for rides and optimize pricing

and driver incentives.
Customer segmentation: To better understand and target different
customer segments.
Driver performance evaluation: To measure driver performance and
identify areas for improvement.
Route optimization: To determine the best routes for drivers and
passengers, reducing travel time and costs.

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 Uber/Ola

Fraud detection: To identify and prevent fraudulent activities, such as

fake rides and fake drivers.

Marketing and promotions: To measure the effectiveness of

marketing campaigns and promotional offers.

Market expansion: To analyze new markets and determine the

viability of expanding into new cities and regions.

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 • business analytics : data and reporting
• business analysis : functions and processes

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 Business Analysis and Business Analytics

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 Business intelligence vs Data Science

Sr no Business intelligence Data Science

1 (Concept) It is basically a set of technologies, It is a field that uses mathematics,

applications and processes that are used statistics and various other tools to
by the enterprises for business data discover the hidden patterns in the data.
analysis.
2(Skills Basic statistics and business knowledge, More technical skillset like coding, data
requirements) as well as data transformation and mining, as well as more advanced
visualization skills statistics and domain knowledge

3(Data Designed to manage well-organized data Designed to manage a large volume of

collection and dynamic and less structured data
management)
4(Complexity) More practical in daily business More complex in terms of capacity for
management; less costly and requires forecasting, ability to manage dynamic
fewer resources data, and requirements for more
advanced skills
5(Data) It mainly deals only with structured data. It deals with both structured as well as
unstructured data.
6(Tools) It’s tools are Insight Squared Sales It’s tools are SAS, BigML, MATLAB,
Analytics, Klipfolio, ThoughtSpot, Cyfe, Excel, etc.
TIBCO Spotfire, etc

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 Data Analyst Vs Business Analyst

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 Types of Analytics - Descriptive, Diagnostic, Predictive, Prescriptive

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 Types

• Descriptive Analytics: Descriptive analytics involves examining past data to understand

what has happened. It summarizes historical data and provides insights into patterns, trends,
and key metrics.

• Diagnostic Analytics: Diagnostic analytics goes beyond descriptive analytics by aiming to

understand why something happened. It involves delving into the data to identify the root
causes of a particular outcome.

• Predictive Analytics: Predictive analytics involves using historical data and statistical
techniques to predict future events or outcomes. It utilizes patterns and relationships found
in the data to estimate what might happen in the future.

• Prescriptive Analytics: Prescriptive analytics takes data analysis further by recommending

specific actions to optimize outcomes based on predictive models and business objectives. It
uses advanced algorithms, optimization techniques, and simulation to generate actionable
insights.

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 Types of Analytics

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 Insights

• Concept of Insights
• Definition:
Insights refer to the valuable understanding or interpretations derived from data analysis.
They are not just the raw data itself but the actionable takeaways that help businesses make
informed decisions.
• What Insights Provide:
• Clarity on trends and patterns in customer behavior, operations, or market conditions.
• Actionable recommendations that can guide strategic decisions.
• Understanding of causal relationships between different business activities.
• Role in Business:
• Insights help in refining business strategies, improving customer experience, and
optimizing operational processes.
• By transforming data into insights, businesses can find opportunities for growth and
areas of improvement.

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 Importance of BA

• Importance of Data in Business Analytics

• Informed Decision-Making: Data provides insights that help businesses make better
decisions. Without data, decisions may rely on intuition, which can be risky.
• Identifying Trends: Analyzing historical data allows businesses to identify trends and
patterns. This can help in forecasting future outcomes and market behaviors.
• Performance Measurement: Businesses can measure key performance indicators (KPIs)
through data analytics, enabling them to evaluate their effectiveness and efficiency.
• Customer Insights: Data helps in understanding customer preferences and behaviors, which
is essential for targeted marketing and improving customer satisfaction.
• Risk Management: By analyzing data, companies can identify potential risks and develop
strategies to mitigate them.
• Operational Efficiency: Data analysis can uncover inefficiencies in processes, leading to
cost savings and improved operational workflows.

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 E- Commerce

Example: E-Commerce Business

Scenario: An e-commerce company wants to improve its sales and customer retention.

Data Utilization
1)Customer Purchase Data:.
2)Web Analytics
3)Customer Feedback

Outcome
1)Targeted Marketing
2)Inventory Management
3)Improved User Experience

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 Differences between data, information and knowledge

Data
Definition: Raw facts and figures without context or meaning.
Characteristics: Unprocessed, unorganized, quantitative or qualitative.
Example: Numbers like 23, 45, 67 or survey responses like "yes," "no," "maybe.“

Information
Definition: Data that has been processed or organized to provide meaning.
Characteristics: Contextualized, structured, relevant to a specific situation.
Example: "The average score is 45," or "70% of survey respondents said 'yes.'“

Knowledge
Definition: Information that has been understood and internalized, allowing for informed decision-making or problem-solving.
Characteristics: Insightful, actionable, based on experience and understanding.
Example: A manager decides to increase product inventory based on the knowledge that customer preferences favor certain
products.

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•y
Quality of data

Ensuring high data quality involves monitoring these dimensions to support effective analysis,
reporting, and decision-making. High-quality data leads to better insights and outcomes.

Parameters of quality of data

1)Accuracy
2)Completeness
3)Consistency
4)Timeliness
5)Relevance
6)Validity
7)Reliability
8)Uniqueness
9)Integrity
10)Accessibility

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 5Vs of Big Data

➢ The term “Big Data” was first introduced to the computing world by Roger Magoulas from
O’Reilly media in 2005.
➢ Big Data as: "data that’s too big, too fast, or too hard for existing tools to process.”

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 Big data types

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 5V of big data

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 5V

Volume
business processes, machines, social media platforms, networks, human interactions, and many more.
Facebook (billion messages) (4.5 billion "Like“) (350 million new posts)

Variety
Big Data can be structured, unstructured, and semi-structured
Data will only be collected from databases and sheets in the past, But these days the data will comes in array forms,
that are PDFs, Emails, audios, SM posts, photos, videos, etc.

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 5V OF BIG DATA

Structured data: In Structured schema, along with all the required columns. It is in a tabular form. Structured
Data is stored in the relational database management system.

Semi-structured: In Semi-structured, the schema is not appropriately defined, e.g., JSON, XML, CSV, TSV,
and email. OLTP (Online Transaction Processing) systems are built to work with semi-structured data. It is
stored in relations, i.e., tables.

Unstructured Data: All the unstructured files, log files, audio files, and image files are included in the
unstructured data. Some organizations have much data available, but they did not know how to derive the value
of data since the data is raw.

Quasi-structured Data:The data format contains textual data with inconsistent data formats that are formatted
with effort and time with some tools.Example: Web server logs, i.e., the log file is created and maintained by
some server that contains a list of activities.

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 5V OF BIG DATA
Prof. Asif Naikawadi

Veracity
Veracity means how much the data is reliable. It has many ways to filter or translate the data. Veracity is the
process of being able to handle and manage data efficiently. Big Data is also essential in business development.
For example, Facebook posts with hashtags.

Value
Value is an essential characteristic of big data. It is not the data that we process or store. It
is valuable and reliable data that we store, process, and also analyze.

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 5v of big data
Prof. Asif Naikawadi

Velocity
real-time. It contains the linking of incoming data sets speeds, rate of change,
and activity bursts. The primary aspect of Big Data is to provide demanding data rapidly.
Big data velocity deals with the speed at the data flows from sources like application
logs, business processes, networks, and social media sites, sensors, mobile
devices, etc.

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 Big Data Collection and Ethics

Big Data Collection

Big data is collected from a variety of sources, including:
Social Media: Platforms like Facebook, Twitter, and Instagram gather data on users' interactions,
preferences, and behaviors.
Web and Mobile Applications: Companies collect data from user interactions on websites and
apps, including browsing history, search queries, and location data.
IoT Devices: Devices like smart thermostats, fitness trackers, and connected home appliances
continuously gather data about their users.
Transaction Data: E-commerce websites, banks, and payment platforms collect data on
purchases, payment methods, and transaction histories.
Sensors: Sensors in vehicles, industrial equipment, and cities collect data on traffic,
environmental conditions, and more

Ethical considerations : Privacy Concerns, Informed Consent, Data Ownership, Bias and
Discrimination, Transparency and Accountability, Security and Data Breaches

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 Data sources

Internal Data Sources :

1)Transactional Data: Data from internal systems such as CRM, ERP, and POS (Point of Sale)
systems that track sales, customer interactions, and supply chain movements.
Example: Customer purchases, inventory levels, supplier orders, and payment transactions.
2) Operational Data: Data related to the day-to-day activities of a business, such as production
schedules, workflow management, and employee activities.
3) Financial Data: Information related to the company’s financial health, including revenue,
expenses, profits, and budgeting.
4) Customer Feedback

External Sources
1) Market data 2) Third Party data 3) Social data 4) Govt data/Public data

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 collection methods

• Primary data Collection methods

Quantitative Methods Qualitative methods

1) Questionnaires 1) Interviews

2) Experiments 2) Focus Groups

3) Observational Studies 3) Observations

4) Longitudinal Studies 4) Case Studies

5) Structured Observations 5) Ethnography

6) Existing Data Analysis 6) Document Analysis

7) Online Polls 7) Narrative Inquiry

8) Geospatial Data Collection 8) Open-ended Surveys

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 Secondary data collection

Internal Secondary Data Sources External Secondary Data Sources

1) Sales Records 1) Government Publications and Reports

2) Financial Records 2) Academic Research and Journals

3) Customer Databases 3) Industry Reports

4) Employee Data 4) Commercial Databases

5) Employee Data 5) News and Media Sources

6) Internal Reports 6) Internet and Online Sources

7) Public Records and Open Data

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 Data privacy, security, and ethical considerations

Data Privacy Data Security Ethical Considerations

Informed Consent Data Encryption Respect for Privacy

Data Minimization Access Control Avoiding Bias and

Discrimination

Transparency Authentication and Authorization Anonymization and De-

identification

Data Subject Rights Data Breach Response Plan Purpose Limitation

Compliance with Regulations Regular Security Audits Transparency and Accountability

Data Backup Avoiding Harm, Fair Use of Data

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