Introduction to Business Analytics

By

Ms. Shweta Soni, Assistant Professor

 Introduction
• Analytics is a field which combines following into one -

1. Data,

2. Information technology,

3. Statistical analysis,

4. Quantitative methods and

5. Computer-based models
• This all are combined to provide decision makers all the possible
scenarios to make a well thought and researched decision.
 Meaning of Business Analytics

• Business analytics (BA) refers to

– “The skills, technologies, practices for continuous
developing new insights and understanding of business
performance based on data and statistical methods”.

– “the practice of exploration of an organization’s data with

emphasis on statistical analysis. Business analytics is used

by companies committed to data-driven decision making.

 Definitions
– “The statistical analysis of the data a business has acquired in
order to make decisions that are based on evidence rather than a
guess”.

– “A combination of data analytics, business intelligence and

computer programming. It is the science of analysing data to
find out patterns that will be helpful in developing strategies”
 Evolution of Business Analytics
• Business analytics has been existence since very long time
and has evolved with availability of newer and better
technologies.
• It has its roots in operations research, which was extensively
used during World War II. Operations research was an analytical
way to look at data to conduct military operations.

• Over a period of time, this technique started getting utilized for

business. Here operation’s research evolved into management
science. Again, basis for management science remained same
as operation research in data, decision making models, etc.
• As the economies started developing and companies became more
and more competitive, management science evolved into-

– Business intelligence,

– Decision support systems and into

– PC software.
Classification and Scope of Business
Analytics

• Business analytics has wide application and

usages-
– Descriptive Analysis

– Diagnostic Analysis
– Predictive Analysis
– Prescriptive Analysis
 Descriptive Analysis

• This branch of Business Analytics analyses and finds

answer to the question-

“What has happened in the past?”.

• Descriptive analysis/statistics performs the function of
“describing” or summarizing raw data to make it easily
understandable and interpretable by humans.
Diagnostic Analysis

• This branch of Business Analytics analyses used

to determine answer to the question-

why something happened in the past?

• It is characterized by techniques such as data

discovery, data mining and correlations.
Predictive Analytics

• This branch of Business Analytics, uses

forecasting techniques and statistical models to
find out-

What is going to happen in future?

• Predictive analysis helps us in predicting the
future course of events and taking necessary
measures for the same.
• Predictive analysis employ-

– Predictive modelling and Machine learning techniques.

• Predictive modeling uses statistics to predict outcomes.

• Machine l earning(ML) statistical is the scientific study of

algorithms and models that computer systems use to

perform a specific task without using explicit

instructions, relying on patterns and inference instead.

Machine learning algorithms build a mathematical model

based on sample data, known in order to make predictions

or decisions without being explicitly programmed

to perform the task.

Prescriptive Analytics

• This branch of Analytics, makes use of optimization and

simulation
 algorithms to find answer to the question-
 “Whatshould we do?”.
• Prescriptive Analysis is used to give advices on possible
outcomes.
• This is a relatively new field of analytics that allows
users to recommend several different possible solutions to the
problem and to guide them about the best possible course of
action.
The Business Analytic Process
 Components of Business Analytics

• There are 6 major components/categories in any

analytics solution:
Data Mining

Text Mining

Components of Forecasting
Business Analytics Predictive Analytics

Optimization

Visualization
• Data Mining – Create models by uncovering previously unknown
trends and pattern in vast amounts of data e.g. detect insurance claims
frauds, Retail Market basket analysis.
• There are various statistical techniques through which data mining is
achieved.

– Classification (when we know on which variables to classify the

data e.g. age, demographics)
– Regression
– Clustering (when we don’t know on which factors to classify
data)
– Associations & Sequencing Models
• Text Mining – Discover and extract meaningful
patterns and relationships from text collections.
E.g.

– Understand sentiments of Customers on social

media sites like Twitter, Face book, Blogs, Call
centre scripts etc. which are used to improve the
Product or Customer service or understand how
competitors are doing.
• Forecasting – Analyze & forecast processes that take place
over the period of time. E.g.

– Predict seasonal energy demand using historical trends,

– Predict how many ice creams cones are required
considering

• Predictive Analytics– Create, manage, demand and deploy

• predictive scoring models. E.g.

– Customer churn & retention,

– Credit Scoring,
– Predicting failure in shop floor machinery
SIGNIFICANCE And USAGES OF
BUSINESS ANALYITCS

• To make data-driven decisions

• Converts available data into valuable information.
• Eliminate guesswork
• Get faster answer to questions
• Get insight into customer behavior
• Get key business metrics reports when
and where needed
• It impacts functioning of the whole organization. And
hence, can-

– Improve profitability of the business

– Increase market share and revenue and
– Provide better return to a shareholder
– Reduce overall cost
– Sustain in competition
– Monitor KPIs (Key Performance Indicators) and
– React to changing trends in real time
Users Of Business Analytics
1. Students

2. Business man

3. Accountants and Auditors

4. Organization/Companies/Group of
industries/Small firm
Main Software Used For Business
Analytics
1. MS-EXCEL

2. SPSS

3. R

4. SAS

5. E-views
• SPSS-
– SPSS Statistics is a software package used for statistical
analysis. Long produced by SPSS Inc., it was acquired by
IBM in 2009. The current versions (2014) are officially
named IBM SPSS Statistics.

• MS-EXCEL-
– Microsoft Excel is a spreadsheet application developed by
Microsoft for Microsoft Windows. It features calculation,
graphing tools, pivot tables, and a macro programming
language called Visual Basic for Applications.
MS-EXCEL in Business Analytics
– Microsoft Excel is a spreadsheet application developed
by Microsoft for Microsoft Windows.

– It features

• Calculation,

• Graphing tools,

• Pivot tables, and

• A macro programming language called Visual Basic

• Optimization– Use of simulations techniques to
identify scenarios which will produce best results. E.g.

– Sale price optimization,

– Identifying optimal Inventory for maximum
fulfilment & avoid stock outs.
• Visualization– Enhanced exploratory data
analysis & output of modelling results with highly
interactive statistical graphics.
 Challenges For Business Analytics

• Business analytics depends on sufficient volumes of high

quality data.

• The difficulty in ensuring data quality.

• Data warehousing require a lot more storage space than it
did speed.

• Business analytics is becoming a tool that can influence

the outcome of customer interactions.
• Technology infrastructure and tools must be able to
handle the data and Business Analytics processes.

• Organizations should be prepared for the changes

that Business Analytics bring to current business and
technology operations.
Applications of Business
Analytics in Various
Aspects of Management
BY
SHWETA SONI, ASSISTANT PROFESSOR
Introduction to Business Analytics

 Business analytics involves data and statistical methods to gain

insights and make informed decisions.
 It is crucial in modern management to optimize processes and
drive strategic initiatives.
 Example: Amazon uses analytics for customer insights.
Types of Business Analytics

 Descriptive Analytics: Analyzes past data to understand trends and

patterns.
 Example: Sales reports.

 Predictive Analytics: Uses statistical models to forecast future

outcomes.
 Example: Sales forecasting.

 Prescriptive Analytics: Recommends actions based on predictive

models.
 Example: Inventory optimization.
Role of Business Analytics in Marketing

 Modern marketing is a data-driven process fueled by analytics.

 Without analyzing relevant key performance indicators (KPI),
businesses can't tell whether their marketing efforts provide the
expected return on investment (ROI).
 Marketing analytics is the key to evaluating past performance and
determining how to improve it going forward.
 Marketing analytics is a set of technologies and methods to transform
raw data into marketing insights.
 Marketing analytics aims to maximize ROI from an enterprise's
marketing initiatives.
 Marketing analytics encompasses tools for planning, managing, and
evaluating these efforts across every channel.
Cont..

 Marketing analytics Analytics helps

understand customer behavior, segmentation, and targeting,
leading to personalized marketing strategies.
 Example: Netflix’s recommendation engine.
 Case Study:
Coca-Cola uses data to personalize marketing campaigns, targeting
specific demographics with tailored messages and promotions.
Business Analytics in
Finance

 Financial analytics is a concept that provides different

views on the business’s financial data.
 It helps give in-depth knowledge and take strategic
actions against them to improve your business’s overall
performance.
 It plays a crucial role in calculating your business’ profit.
 It helps you answer every business question related to
your business while letting you forecast the future of
your business.
 Analytics in finance aids in risk management, fraud
detection, and financial forecasting.
 Example: Banks use analytics for credit scoring.
Case Study: Financial Analytics

 Capital One leverages data analytics to personalize financial

products for their customers, enhancing customer satisfaction
and loyalty.
Business Analytics in
Operations Management

 Operations analytics focuses on

optimizing inventory management,
supply chain processes, and overall
operational efficiency.

Walmart’s supply chain

 Example:
management system.
Case Study: Operations Analytics

 Toyota utilizes analytics in its Toyota Production System (TPS)

to streamline production processes and minimize waste.
Business Analytics in
Human Resources

 HR Analytics brings “analysis” and “statistics” together to find the application of

the data pool created by HR.
 It is a data-driven approach to managing employees.
 The purpose of HR analytics examples can be divided into two subgroups:
(i) Reaching Business Goals
 This dimension of HR analytics aims to provide the organization with insight into
the current state of operations. Such insights expedite the fulfillment of business
goals according to the set timeframes.
(ii) Data-Driven Strategy Building
 It helps build prediction models to identify the strategy that could lead to the
optimum return on investment (ROI) for its human resources.
 HR analytics makes it easy for the HR professional to create job offers that can
procure the best talent in the market and manage and retain them to boost ROI.
Cont…

 HR analytics tools collect data like:

(i) Employee performance
(ii) Employee attendance
(iii) Multi-rater or 360-degree reviews
(iv) Salary data
(v) Promotion data
(vi) Employee Retention Rate

 HR analytics tools help in a close alignment of employee data

and HR initiatives to direct them towards the achievement of
the organization’s goals.
Case Study: HR Analytics

 IBM employs analytics to predict employee turnover, allowing

them to implement proactive measures to retain top talent.
Business Analytics in
Retail analytics

 Retail analytics tracks business data, such as inventory

levels, consumer behavior, sales numbers, and more, to
make more informed, strategic decisions.
 This includes providing insights to understand and optimize
the retail business’s supply chain, consumer behavior, sales
trends, operational processes, and overall performance.
 Retail analytics translate real-world business activity into
quantifiable data to drive better business decision-making.
 This data can cover consumer behavior patterns, supply
chain information, and inventory updates.
 Retailers can operationalize these insights in numerous
ways.
Business Analytics in
Product Development

 Analytics in product development involves analyzing customer

feedback, conducting product tests, and tracking market trends.
 Example: Apple’s use of customer feedback for product
improvements.
Case Study: Product Analytics

 Procter & Gamble uses data analytics throughout their product

development process to ensure products meet customer needs
and preferences.
Business Analytics in
Customer Service

 Customer service analytics enhances the customer experience,

manages complaints effectively, and optimizes service
delivery.
 Case Study
Amazon employs analytics to continually refine its customer
service operations, ensuring high customer satisfaction.
Challenges in Implementing Business
Analytics

Common challenges in implementing business analytics include:

 Data quality issues
 Integration challenges
 Resistance to change
 Lack of technical skills among employees
 Data Security and Maintenance
 Integrity of Data
 Delivering relevant information in the given time
 Inability to address complex issues
 Costs involved in implementing Business Analytics
 Lack of a proper strategy to implement Business Analytics
Future Trends in Business Analytics

 Future trends in business analytics include:

 - AI and machine learning
 - Big data
 - Real-time analytics
 Example: Predictive maintenance in manufacturing using IoT
and analytics.
Conclusion

 Business analytics plays a crucial role in modern management

by providing insights that drive strategic decision-making.
 Organizations that effectively utilize analytics gain a
competitive advantage.
 Example: Analytics-driven decisions lead to improved
efficiency and profitability.
THANK YOU
Excel in Business Analytics

By- Shweta Soni

Assistant Professor
 BUSINESS ANALYTICS
BY
Ms. Shweta Soni
Analytics:

• Analytics is a body of knowledge consisting of statistical,

mathematical and operations research techniques, and Artificial
intelligence techniques such as machine learning and deep
learning algorithms, data collection and storage, data
management processes such as data extraction, transformation
and loading (ETL).
Data Science:

• Data Science is nothing short of magic, and a Data Scientist is a

magician who performs tricks with the data in his hat. Now, as
magic is composed of different elements, similarly, Data Science is
an interdisciplinary field. We can consider it to be an
amalgamation of different fields such as data manipulation, data
visualization, statistical analysis, and Machine Learning. Each of
these sub-domains has equal importance
Data Manipulation:

• With the help of data manipulation techniques, you can find

interesting insights from the raw data with minimal effort. Data
manipulation is the process of organizing information to make it
readable and understandable.
• Engineers perform data manipulation using data manipulation
language (DML) capable of adding, deleting, or altering data. Data
comes from various sources.
Importance of Data manipulation

• Consistency: Data manipulation maintains consistency across data

accumulated from different sources, giving businesses a unified view
that helps them make better, more informed decisions.
• Usability: Data manipulation allows users to cleanse and organize data
and use it more efficiently.
• Forecasting: Data manipulation enables businesses to understand
historical data and helps them prepare future forecasts, especially in
financial data analysis.
• Cleansing: Data manipulation helps clear unwanted data and keep
information that matters. Enterprises can clean up records, isolate, and
even reduce unnecessary variables, and focus on the data they need.
Data visualization:

• It is the practice of converting raw information (text, numbers, or

symbols) into a graphic format.
• The data is visualized with a clear purpose: to show logical
correlations between units, and define inclinations, tendencies,
and pattern
Bar chart :

• A bar chart is one of the basic ways to compare data units to each
other. Because of its simple graphic form, a bar chart is often used
in Business Analytics as an interactive page element.
• Bar charts are versatile enough to be modified and show more
complex data models. The bars can be structured in clusters or be
stacked, to depict distribution across market segments, or
subcategories of items. The same goes for horizontal bar charts,
fitting more for long data labels to be placed on the bars.
• When to use: comparing objects, numeric information. Use
horizontal charts to fit long data labels. Place stacks in bars to
break each object into segments for a more detailed comparison.
Pie chart

• One more common type of chart we see everywhere, is a pie

chart.
• This type of chart is used in any marketing or sales department,
because it makes it easy to demonstrate the composition of
objects or unit-to-unit comparison.
• When to use: composition of an object, comparing parts to the
whole object
Line Graph

• This type of visual utilizes a horizontal axis and a vertical axis to

depict the value of a unit over time. Line graphs can also be
combined with bar charts to represent data from multiple
dimensions.
• When to use: object value on the timeline, depicting tendencies in
behavior over time.
Box plot

• Our main elements here are minimum, maximum, and the median
placed in between the first and third quartile.
• What a box shows is the distribution of objects, and their
deviation from the median.
• When to use: Distribution of the complex object, deviation from
the median value
Scatter plot

• This type of visualization is built on X and Y axes. Between them,

there are dots placed around, defining objects.
• The position of a dot on the graph denotes which qualities it has.
As in the case of line graphs, dots placed between the axes are
noticed in a split second.
• The only limitation of this type of visualization is the number of
axes.
• When to use: showing distribution of objects, defining the quality
of each object on the
Radar or spider chart

• This type of chart is basically a line chart drawn in radial fashion.

It has a spider web form that is created by multiple axes and
variables.
• Its purpose is the same as for a line chart. But because of the
number of axes, you can compare units from various angles and
show the inclinations graphically.
• When to use: describing data qualities, comparing multiple
objects to each other through different dimensions.
Funnel charts

• These are perfect for showing narrowing correlations between

different groups of items. In most cases, funnels will utilize both
geometric form
• The example shows conversion results starting from total traffic
number and the number of subscribers This type of chart is also
handy when there are multiple stages in the process.
• On the example above, we can see that after the “Contacted
Support” stage, the number of subscribers has been reduced. and
colour coding to differentiate items.