Business Analytics READING MATERIAL MBA SEM - 2

MODULE – 1
Q – 1 What is Business Analytics? Explain overview of Business Analytics.
Ans
• 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.
• Business analytics is the practice of iterative, methodical exploration of
an organization’s data with emphasis on statistical analysis.
• Business Analytics is used by companies committed to data-driven
decision making.
• 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 analyzing the data to create value to organizations.
• The analysis of enterprise data from multiple perspectives and enhance
the performance of business.
• Business Analytics is heavily dependent on data.
• For its successful implementation, business analytics requires a high
volume of high quality data.
The challenge faced by business analytics remains the storage, integration,
reconciliation of data from multiple disparate sources across several business
functions and the continuous updates to the data warehouse.

Business Analytics is “the study of data through statistical and operations

analysis, the formation of predictive models, application of optimization
techniques, and the communication of these results to customers, business
partners, and college executives.” Business Analytics requires quantitative
methods and evidence-based data for business modelling and decision making;
as such, Business Analytics requires the use of Big Data.

ByAsst.Prof. Aaska Bhatt Page 1

Business Analytics READING MATERIAL MBA SEM - 2

Overview of Business Analytics:

• Business Analytics allows you to view statistical information about the
unstructured, Big Data in your environment, such as files and emails.
• With this information, you can quickly assess the current state of your
Big Data, take actionable steps to retrieve valuable storage space, and
mitigate the risk of compliance-related issues.
• Some examples of how the information provided by Business Analytics
can help you manage Big Data include:
• Locating older files or emails that can be moved to less expensive
archival storage
• Identifying and deleting extra copies of large files and databases
• Removing unauthorized file types (such as multimedia and personal
photos)
• Deleting outdated emails to reduce compliance risk
Q – 2 What is Business Analytics? Explain need of Business Analytics.
OR
What is Business Analytics? Why Business Analytics?
Ans
• 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.
• Business analytics is the practice of iterative, methodical exploration of
an organization’s data with emphasis on statistical analysis.
• Business Analytics is used by companies committed to data-driven
decision making.
• 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 analyzing the data to create value to organizations.
• The analysis of enterprise data from multiple perspectives and enhance
the performance of business.

ByAsst.Prof. Aaska Bhatt Page 2

Business Analytics READING MATERIAL MBA SEM - 2
• Business Analytics is heavily dependent on data.
• For its successful implementation, business analytics requires a high
volume of high quality data.
The challenge faced by business analytics remains the storage, integration,
reconciliation of data from multiple disparate sources across several business
functions and the continuous updates to the data warehouse.
Need or Why Business Analytics?
• Increase of storage capacities
• Increase of processing power
• Availability of Data
• Analyze data from multiple sources
• Use advanced analytics and statistics to find hidden patterns in large
datasets
• Disseminate information to relevant stakeholders through interactive
dashboards and reports.
• Monitor KPIs and react to changing trends in real-time.
• Justify and revise decisions based on up-to-date information.
• Examining large amount of data
• Business analysis helps in structuring the findings from different sources
of data.
Q – 3 What is Business Analytics? Explain Components of Business Analytics.
Ans
• 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.
• Business analytics is the practice of iterative, methodical exploration of
an organization’s data with emphasis on statistical analysis.
• Business Analytics is used by companies committed to data-driven
decision making.
• 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 analyzing the data to create value to organizations.
ByAsst.Prof. Aaska Bhatt Page 3
Business Analytics READING MATERIAL MBA SEM - 2
• The analysis of enterprise data from multiple perspectives and enhance
the performance of business.
• Business Analytics is heavily dependent on data.
• For its successful implementation, business analytics requires a high
volume of high quality data.
The challenge faced by business analytics remains the storage, integration,
reconciliation of data from multiple disparate sources across several business
functions and the continuous updates to the data warehouse.
Components of Business Analytics
Business Analytics can be broken into 3 components:
1) Business Context
2) Technology
3) Data Science
Business Context: Business analytics projects start with the business context
and ability of the organization to ask the right questions. The following
business knowledge manifests the importance of pregnancy prediction from a
retailer’s perspective:
1. Pregnant women are likely to be price-insensitive, so they become the
Holy Grail for retailers such as Target. Expectant women are usually
willing to spend more for their comfort as well as the babies’.
2. For many customers shopping is a habit, and most do not respond to
promotions since shopping is a routine for them. The shopping
behaviour changes during special events such as marriage and
pregnancy and it becomes easy to target them during these special
events.
The ‘pregnancy prediction’ is based on the insights about price-insensitive
customers and the market size of baby products. In analytics, knowledge of
business context is important for the ability to ask the right questions to start
the analytics project.
Another good example of business context driving analytics is the ‘did you
forget feature’ used by the Indian online grocery store bigbasket.com. Many
customers have the tendency to forget items they intended to buy. A reported
that on average, customers forget 30% of the items they intend to buy.
Forgetfulness can have significant cost impact for the online grocery stores.
The customers may buy the forgotten items from a nearby store where they
live, but since she/he is already in the store she/he may buy more items
resulting in reduction in basket size in the future for online grocery stores such
as bigbasket.com.
Another problem that online grocery customers face while ordering the items
is the time taken to place an order. Unlike customers of Amazon on Flipkart,
online grocery customers order several items each time; the number of items
in an order may cross 100. Searching for all the items that a customer would
like to order is a time-consuming exercise, especially when they order using
smart phones. Thus, bigbasket created a ‘smart basket’ which is basket
consisting of items that a customer is likely to buy reducing the time required
to place the order.

ByAsst.Prof. Aaska Bhatt Page 4

Business Analytics READING MATERIAL MBA SEM - 2
Technology
• To find out whether a customer is pregnant or to find out whether a
customer has forgotten to place an order for an item, we need data.
• In both the cases, the point of sale data has to be captured consisting of
past purchases made by the customer.
• Information Technology (IT) is used for data capture, data storage, data
preparation, data analysis, and data share.
• Today's most data are unstructured data; data that is not in the form of
matrix is called unstructured data. Images, texts, voice, video are few
examples of unstructured data.
• To analyze data, one may need to use R, Python, SAS, etc. Technology can
be used to personalize coupons that can be sent to individual customers.
• An important output of analytics is automation of actionable items derived
from analytical models; automation of actionable items is usually achieved
using IT.
Data Science
• Data Science is the most important component of analytics, it consists of
statistical and operations research techniques, machine learning and deep
learning algorithms.
• The objective of the data science component analysis is to identify the most
appropriate statistical model/machine learning algorithm that can be used.
• For exam, Target’s pregnancy prediction is a classification problem in which
customers are classified into different groups. In the case of pregnancy test,
the classes are:
• Pregnant
• Not Pregnant
• There are several techniques for solving classification problems such as
logistic regression, classification trees, random forest, adaptive boosting,
and neural networks and so on.
• The objective of the data science component is to identify the technique
that is based on a measure of accuracy. Usually, several models are
developed for solving the problem using different techniques and a few
models may be chosen for deployment of the solution.

ByAsst.Prof. Aaska Bhatt Page 5

Business Analytics READING MATERIAL MBA SEM - 2
Q – 4 What is Business Analytics? Explain Types of Business Analytics.
Ans
• 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.
• Business analytics is the practice of iterative, methodical exploration of
an organization’s data with emphasis on statistical analysis.
• Business Analytics is used by companies committed to data-driven
decision making.
• 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 analyzing the data to create value to organizations.
• The analysis of enterprise data from multiple perspectives and enhance
the performance of business.
• Business Analytics is heavily dependent on data.
• For its successful implementation, business analytics requires a high
volume of high quality data.
The challenge faced by business analytics remains the storage, integration,
reconciliation of data from multiple disparate sources across several business
functions and the continuous updates to the data warehouse.
Business analytics can be grouped into three types:
1) Descriptive Analytics
a. What has happened
2) Predictive Analytics
a. What could happen in the future based on previous trends and
patterns?
3) Prescriptive Analytics
a. What should a business do?
What is Descriptive Analytics?
90% of organizations today use descriptive analytics which is the most basic
form of analytics. The simplest way to define descriptive analytics is that, it
answers the question “What has happened?” This type of analytics, analyses
the data coming in real-time and historical data for insights on how to
approach the future.

ByAsst.Prof. Aaska Bhatt Page 6

Business Analytics READING MATERIAL MBA SEM - 2
The main objective of descriptive analytics is to find out the reasons behind
precious success or failure in the past. The ‘Past’ here, refers to any particular
time in which an event had occurred and this could be a month ago or even
just a minute ago. The vast majority of big data analytics used by organizations
falls into the category of descriptive analytics.
A business learns from past behaviours to understand how they will impact
future outcomes. Descriptive analytics is leveraged when a business needs to
understand the overall performance of the company at an aggregate level and
describe the various aspects.
Dr. Michael Wu, chief scientist of San Francisco-based Lithium Technologies
describes descriptive analytics as -“The simplest class of analytics, one that
allows you to condense big data into smaller, more useful nuggets of
information.”
Descriptive analytics are based on standard aggregate functions in databases,
which just require knowledge of basic school math. Most of the social analytics
are descriptive analytics. They summarize certain groupings based on simple
counts of some events. The numbers of followers, likes, posts, fans are event
counters. These metrics are used for social analytics like average response
time, average number of replies per post, %index, number of page views, etc.
that are the outcome of basic arithmetic operations.
The best example to explain descriptive analytics are the results that a
business gets from the web server through Google Analytics tools. The
outcomes help understand what actually happened in the past and validate if a
promotional campaign was successful or not based on basic parameters like
page views.
What is Predictive Analytics?
The subsequent step in data reduction is predictive analytics. Analysing past
data patterns and trends can accurately inform a business about what could
happen in the future. This helps in setting realistic goals for the business,
effective planning and restraining expectations. Predictive analytics is used by
businesses to study the data and ogle into the crystal ball to find answers to
the question “What could happen in the future based on previous trends and
patterns?”
Dr. Michael Wu, chief scientist of San Francisco-based Lithium
Technologies said -"The purpose of predictive analytics is NOT to tell you what
will happen in the future. It cannot do that. In fact, no analytics can do that.
Predictive analytics can only forecast what might happen in the future, because
all predictive analytics are probabilistic in nature."
Organizations collect contextual data and relate it with other customer user
behaviour datasets and web server data to get real insights through predictive
analytics. Companies can predict business growth in future if they keep things
as they are. Predictive analytics provides better recommendations and more
future looking answers to questions that cannot be answered by BI.
Predictive analytics helps predict the likelihood of a future outcome by using
various statistical and machine learning algorithms but the accuracy of
predictions is not 100%, as it is based on probabilities. To make predictions,
algorithms take data and fill in the missing data with best possible guesses.
This data is pooled with historical data present in the CRM systems, POS
Systems, ERP and HR systems to look for data patterns and identify
ByAsst.Prof. Aaska Bhatt Page 7
 Business Analytics READING MATERIAL MBA SEM - 2
Predictive analytics can be further categorized as –
1. Predictive Modelling –What will happen next, if?
2. Root Cause Analysis-Why this actually happened?
3. Data Mining- Identifying correlated data.
4. Forecasting- What if the existing trends continue?
5. Monte-Carlo Simulation – What could happen?
6. Pattern Identification and Alerts –When should an action be invoked to correct
a process.
Sentiment analysis is the most common kind of predictive analytics. The
learning model takes input in the form of plain text and the output of the
model is a sentiment score that helps determine whether the sentiment is
positive, negative or neutral.
Organizations like Wal-Mart, Amazon and other retailers leverage predictive
analytics to identify trends in sales based on purchase patterns of customers,
forecasting customer behaviour, forecasting inventory levels, predicting what
products customers are likely to purchase together so that they can offer
personalized recommendations, predicting the amount of sales at the end of
the quarter or year. The best example where predictive analytics find great
application is in producing the credit score. Credit score helps financial
institutions decide the probability of a customer paying credit bills on time.
Organizations should capitalise on hiring a group of data scientists in 2016 that
can develop statistical and machine learning algorithms to leverage predictive
analytics and design an effective business strategy.
What is Prescriptive Analytics?
Big data might not be a reliable crystal ball for predicting the exact winning
lottery numbers but it definitely can highlight the problems and help a
business understand why those problems occurred. Businesses can use the
data-backed and data-found factors to create prescriptions for the business
problems that lead to realizations and observations.
Prescriptive analytics is the next step of predictive analytics that adds the spice
of manipulating the future. Prescriptive analytics advises on possible outcomes
and results in actions that are likely to maximise key business metrics. It
basically uses simulation and optimization to ask “What should a business
do?”
Prescriptive analytics is an advanced analytics concept based on –
 Optimization that helps achieves the best outcomes.
 Stochastic optimization that helps understands how to achieve the best
outcome and identify data uncertainties to make better decisions.
Simulating the future, under various set of assumptions, allows scenario
analysis - which when combined with different optimization techniques, allows
prescriptive analysis to be performed. Prescriptive analysis explores several
possible actions and suggests actions depending on the results of descriptive
and predictive analytics of a given dataset.
Prescriptive analytics is a combination of data, mathematical models and
various business rules. The data for prescriptive analytics can be both internal
(within the organization) and external (like social media data).Business rules
are preferences, best practices, boundaries and other constraints.
Mathematical models include natural language processing, machine learning,
statistics, operations research, etc.

ByAsst.Prof. Aaska Bhatt Page 8

Business Analytics READING MATERIAL MBA SEM - 2
Prescriptive analytics are comparatively complex in nature and many
companies are not yet using them in day-to-day business activities, as it
becomes difficult to manage. Prescriptive analytics if implemented properly
can have a major impact on business growth. Large scale organizations use
prescriptive analytics for scheduling the inventory in the supply chain,
optimizing production, etc. to optimize customer experience.
Aurora Health Care system saved $6 million annually by using prescriptive
analytics to reduce re-admission rates by 10%. Prescriptive analytics can be
used in healthcare to enhance drug development, finding the right patients for
clinical trials, etc.
As increasing number of organizations realize that big data is a competitive
advantage and they should ensure that they choose the right kind of data
analytics solutions to increase ROI, reduce operational costs and enhance
service quality.
Q – 5 What is Business Analytics? Explain Techniques of Business Analytics.
Ans
• 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.
• Business analytics is the practice of iterative, methodical exploration of
an organization’s data with emphasis on statistical analysis.
• Business Analytics is used by companies committed to data-driven
decision making.
• 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 analyzing the data to create value to organizations.
• The analysis of enterprise data from multiple perspectives and enhance
the performance of business.
• Business Analytics is heavily dependent on data.
• For its successful implementation, business analytics requires a high
volume of high quality data.
The challenge faced by business analytics remains the storage, integration,
reconciliation of data from multiple disparate sources across several business
functions and the continuous updates to the data warehouse.

ByAsst.Prof. Aaska Bhatt Page 9

 Business Analytics READING MATERIAL MBA SEM - 2
• Techniques of Business Analytics
• There are 5 techniques of Business Analysis:
• SWOT Analysis
• MOST Analysis
• PESTLE Analysis
• BRAINSTORMING
• MINDMAPPING

1. SWOT Analysis
The SWOT Analysis, which stands for Strength, Weakness, Opportunities, and
Threat is a very simple, yet powerful technique used by Business Analysts to
analyze both internal and external organizations under analysis.
When using SWOT Analysis, the Business Analyst conducts, and thorough
analysis of the internal (Strength and Weakness) and external (Threats and
Opportunities) actors and factors at play in the space the organization
operates in.
In using SWOT Analysis, the Business Analysis answers the following questions
under each of the quadrants
 Strengths: characteristics of the business or project that give it an advantage
over others
 Weaknesses: characteristics of the business that place the business or project
at a disadvantage in relation to competitors or other projects
 Opportunities: elements in the environment that the business or project could
exploit to its advantage
 Threats: elements in the environment that could cause trouble for the
business or project
Use: The SWOT Analysis is useful in understanding the position of the
organization and helps to recommend the capabilities the organization needs
to build or the feasibility of any initiative based on the result of the analysis.

2. MOST ANALYSIS
The MOST Analysis is a very simple and extremely powerful framework tool
used by Business Analysts for analyzing and planning the details of what an
organization does and initiatives the organization should be looking at doing
and helps maintain strategic alignment. It can also be used to give the business
or organization a fresh sense of purpose and capability.
The M.O.S.T. Analysis is a highly-structured method for providing targets to
team members at every level of an organization. Working from the top down,
it ensures that you retain focus on the goals which matter most to your
organization
The MOST Analysis comprises of four elements:
Mission: Mission is the top-level, overall reason for being in business and
defines outcomes the organization wants to accomplish. The more specific the

ByAsst.Prof. Aaska Bhatt Page 10

Business Analytics READING MATERIAL MBA SEM - 2
business is when defining the mission, then the more success the business will
have later on trying to define the remaining points within the tool.
Objective: The objectives are one step down from the mission. Think of these
as a collection of individual goals that will add up to reaching the overall
mission. Just like with the mission, objectives should be specific enough to
guide decision making and planning for the future. With the mission in place, it
should be relatively easy to develop a list of a few objectives. Objectives should
be Specific, Measurable, Achievable, Realistic, and Timely (S.M.A.R.T.).
Otherwise, goal-creep will set in, and objectives will become fuzzy and difficult
to implement.
Strategy: These are the things the organization or business will do to reach the
objectives. What actions should be taken to accomplish the objectives, and in
turn, the mission? Strategies offer a way to quickly review and group the
tactics implemented on the ground floor, so they make sense as methods to
achieve your objectives
Tactics: Tactics are the methods you will use to carry out your strategies. They
should be simple and relatively discrete processes that can easily be
understood and carried out even by people who do not have a high-level
overview of the M.O.S.T. analysis.
Use: The MOST Analysis is used to ensure the BA recommends the solutions
that the organization needs to meet its objectives and mission. It is also used
for alignment.

3. PESTLE ANALYSIS
The awareness of the influence the environment has on the organization the
Business Analyst is working with is a very important factor in any Business
Analysis engagement. The PESTLE Analysis, which is also called PEST Analysis is
a tool used to identify and analyze the key drivers of change in the strategic or
business environment. The analysis looks at the drivers and factors in the
following and how the happening in those areas influence the decisions and
the type of recommendation the Business Analysts gives the organization
Political: What are the current happenings and factors in the political
landscape of the environment the business operates and how can it affect or
change our business?
Economic: What are the important economic factors such as inflation or
meltdown is happening, has happened, or will happen in our business
environment and what do they mean to our business
Social (or Socio-cultural): What cultural aspects are most important that we
need to pay attention to
Technological: What are the trends and innovation in the technology space?
What is the direction technology is going, and what impact will they have in
our organization or business?
Legal: What are the regulations or legislations that directly impact our industry
or environment and how do they affect our business
Environmental: What are the environmental considerations we need to make
in our business and organization?
Use: The PESTLE Analysis is used to understand the factors and drivers within
the environment the organization operates and how those factors will
influence the narratives of the organization
ByAsst.Prof. Aaska Bhatt Page 11
Business Analytics READING MATERIAL MBA SEM - 2
4. BRAINSTORMING
Brainstorming in a group creativity technique that is used extensively by
Business Analysts to generate ideas, identify root causes of problems, and
solve complex business problems. Most of the other techniques such as Mind
Mapping, Root Cause Analysis, SWOT, and PESTLE Analysis use Brainstorming
and an underlying technique.
I particularly find this technique very useful in generating diverse ideas.
Use: This is used in problem-solving, fact finding and idea generation

5. MINDMAPPING
You want to be sure you have all the areas within the analysis covered, you
want to certainly confirm you have considered the different and diverse
components and elements under analysis, you do not want to miss anything
out? Then you would need the MINDMAP technique.
The Business Analysis function has over the years been greatly helped by this
special and often unrecognized technique, but I find it extremely helpful during
my business analysis engagement
What are the techniques you find useful in Business Analysis engagement?
Share in the comment section.
Q – 6 Explain Predictive and Prescriptive analytics techniques.
Ans
Regression
Regression is the most frequently used predictive analytics tool. It is a
supervised learning algorithm. In management and social sciences, almost all
hypotheses are validated using regression models. In business, irrespective of
the sector, the decision maker would like to know how the key performance
indicators (KPI) of the business are related to macro-economic parameters and
other internal process parameters.
Logistics and Multinomial Regression
Logistic and multinomial logistic regression techniques are used to find the
probability of occurrence of an event. Logistic regression is a supervised
learning algorithm. Logistic regression is used for solving classification and
discrete choice problems. Classification problems are common in many
businesses. For example, banks and financial institutions would like to classify
their customers into several risk categories. Companies would like to predict
which customer is highly likely to churn in the next quarter. Marketers would
like to know which brand a customer is likely to buy and whether promotions
can make a customer change his/her brand loyalty. Credit scoring and fraud
detection are other popular applications of logistic regression.
Decision Trees
Decision trees or classification trees are usually used for solving classification
problems. There are several types of classification tree models. Chi-Squared
Automatic Interaction Detection (CHAID) and classification Trees (CART) are
frequently used for solving classification problems. Although the decision trees
are usually used for solving classification problems, they can also be used when
the outcome variable is continuous.

ByAsst.Prof. Aaska Bhatt Page 12

Business Analytics READING MATERIAL MBA SEM - 2
Markov Chains
Olle Haggstrom (2007) wrote an article stating that problem solving is often a
matter of cooking up an appropriate Markov chain. One of the initial
applications of Markov chains was implemented by the American retail giant
Sears. They used a Markov Decision Process to decide the optimal mailing
policy for their catalogues. Today, Markov chains are one of the key analytics
tools in marketing, finance, operations and supply chain management.
Random Forest
Random Forest is one of the popular machine learning algorithms that uses
ensemble approach to solve the problem by generating a large number of
models.
Linear Programming
Since its origins during World War II, linear programming is one of the most
frequently used techniques in prescriptive analytics. Problems such as resource
allocation, product mix, cutting-stock problem, revenue management, and
logistics optimization are frequently solved using linear programming.
Integer Programming
Many optimization problems in real life may have variables that can take only
integer values. When one or more variables in the problem can take only an
integer solution, the model is called an integer programming model. Capital
Budgeting, scheduling, and set covering are a few problems that are solved
using integer programming.
Multi-Criteria Decision-Making Model
In many cases, the decision makers may have more than one objective. For
example, a company may like to increase the profit as well as the market
share. It is possible that the various objectives identified by the organizations
may conflict with one another. In such cases, techniques such as Analytic
Hierarchy Process and Goal Programming are used to arrive at the optimal
decisions.
Combinational Optimization
Combinational Optimization involves choosing the optimal solution from a
large number of finite solutions. The travelling salesman problem (TSP), the
vehicle routine problem (VRP) and the minimum spanning tree problem (MST)
belong to this category. Many industry problems are analogical to TSP, VRP,
and MST.
Non-Linear Programming (NLP)
Large classes of problems faced by the industry have non-linear objective
functions and or non-linear constraints. Many engineering design optimization
problems belong to this category. NLP are also difficult set of problems to solve
due to limitations of the existing algorithms. NLP is an integral part of several
machine learning algorithms such as neural network. The loss function is used
for finding weights for input variable is a non-linear function.
Six Sigma
Six Sigma and its problem-solving methodology DMAIC (Define, Measure,
Analyse, Improve, and Control) are frequently used in process improvement
problems.
Social Media Analytics Tools

ByAsst.Prof. Aaska Bhatt Page 13

Business Analytics READING MATERIAL MBA SEM - 2
Social Media analytics is a collection of tools and techniques used for analyzing
unstructured data such as texts, videos, photos, and so on. With the
exponential growth in the use of social media by the general public, tools
designed for analysing unstructured data will be frequently used by
organizations.

Q – 7 What is the key purpose of using IT in Business Analytics.

Ans
• IT applications are of various categories.
• Office productivity/Office automation IT applications
• Departmental IT applications
• Enterprise level on-line transaction processing applications
• Business Process or Model Innovation applications
• Decision Support application
Office productivity/Office automation IT applications
All of us have used software like email, Google search tool, word processor,
spreadsheet and presentation tools that enhance personal productivity. These
are “office productivity/office automation” IT applications. Some office
productivity applications may focus on team productivity and these are termed
as “Groupware”. Intra-company email, team project management software,
intranet portals, and knowledge management systems are typical examples of
Groupware.
Departmental IT applications
Consider IT applications like “Payroll processing”. We could consider payroll as
a key IT application for HR function. The core purpose of the payroll IT
application is to calculate the salary payable to all employees, generate pay
slips, and inform the bank for funds transfer to the respective employee
accounts. The same work can definitely be done manually. But the manual
system works well when the number of employees is small and salary
computation is simple. When you have, say, 10000 employees to pay and the
salary calculation needs to take care of several data pieces like leave, overtime,
promotions, partial working, and so on, and the entire work needs to be done
very quickly, you will face challenges. However, when the salary calculation is
automated, the benefits gained will be speed, accuracy, and the ability to
repeat the process any number of times. These IT applications also help in fast
information retrieval and generate statutory reports immediately. Such a type
of application could be termed as Departmental IT Applications.
On-line Transaction Processing Systems
We may have come across some common IT applications like train/bus/airline
ticket reservations systems. These are called On-line Transaction Processing
Systems. On an on-line train ticket reservation system, you will never face the
problem of duplicate seat allocation and more allocation than the capacity,
assuming that the data entered into the system is correct. The online
transaction processing systems also generate large volumes of data, typically
stored in RDBMS (relational database management system). This category of IT
applications too provides benefits like speed, accuracy, search capability,
status inquiry, and easy update ability and so on.

ByAsst.Prof. Aaska Bhatt Page 14

Business Analytics READING MATERIAL MBA SEM - 2
Business Process/Model Innovation
Newer types of applications such as the Amazon book store. This book store,
through the combination of the Internet technology and book store software
management, has completely changed the way you shop for a book. Here
there is really no book store that you could visit, stand in front of the book
collections in an aisle, browse through the catalogue or search the book
shelves, pick a book, get it billed, and carry it home, as you do in a normal book
store. Applications like the one used at the Amazon book store are called
Business process/Model Innovation applications.
Decision Support
The IT application that helps us in decision making, these applications provides
facts that enable us make objective decisions. Suppose you would like to buy a
new two-wheeler. One option for you is to visit showrooms of all brands, test-
drive difficult vehicles, and collect data sheets of various options. Another
option is to feed in an IT system inputs like your budget, expected mileage,
availability, etc. and the system would present the best options as a
comparisons. Certainly, the second option would help you make informed
decision faster. This is possibly one of the best possible ways to use. The IT
applications which help in decision-making are called Decision Support
applications.
All these generate data of varying quality.
The data is likely to be in different formats.
These applications may be developed using different programming languages
like C, Pascal, C++, Java or COBOL and run on different operating systems. They
may even use different vendors for the RDBMS package like MS SQL, Oracle,
Sybase or DB2.

Q – 8 Explain Information Users and their Requirement.

Ans
• IT applications have matured to such a state today that it can typically be
used by anyone.
• The requirements of the enterprise to deliver right information to the right
authorized user at the right time, users of IT applications may need to be
given lots of attention.
• The “Data” is really an asset of any enterprise and is a key ingredient in the
recipe for a successful business.
• IT application users in the internet age can be a whole lot of people
roughly categorized into the following groups:
• Employees, partners, suppliers, customers, investors, analysts,
prospective employees, and general public interested in the business
affairs of the enterprise.
• Office goers, mobile users, home office users, remote securely
connected users, casual visitors to website, and digital users who
conduct transactions using the Internet.

ByAsst.Prof. Aaska Bhatt Page 15

Business Analytics READING MATERIAL MBA SEM - 2
• Business leaders, decision makers, operations managers, project
managers, junior executives, and trainees who have a hierarchy.
• Role-based users who have access to certain category of IT
applications, certain level of classified information, access to specific
systems, and even specific operations they are allowed to perform.
• Securely connected users who may be allowed to access specific
servers from a specific location during specified hours.
• Administrative users, who configure the IT environment, manage
users access control, execute anti-virus programs, perform anti-theft
checks, install updates/upgrades, back-up enterprise data, and
restore in the event of data corruption.
• Users who have permission to read or update or have full control
over the enterprise information.
• Knowledge workers/analytical users who discover new patterns in
the enterprise data to help businesses make innovative moves in the
market place for competitive advantage.
• Multi-device access users, who sometimes work in the office, move in
the field, use different devices ranging from desktop systems to hand
held smart phones to connect to the enterprise IT applications.
• No matter how users access the enterprise data from various locations,
they have certain common expectations. Some of these includes:
• Smooth authentication and access to authorized resources.
• Availability of IT applications 24*7, 35 days.
• Speed of information delivery without having to wait long for
response from systems.
• Ease-of-navigation and simple “user experience” with personalization
capabilities.
• Secure delivery and transport of data to and from the IT applications.
• Secure transaction completion and roll-back especially involving
monetary transactions.
• Consistent, accurate information and ability to recover/restart from
faults.
• Anytime, anywhere, any device-centric information delivery.

ByAsst.Prof. Aaska Bhatt Page 16

Business Analytics READING MATERIAL MBA SEM - 2
Q – 9 Explain Framework for Data-Driven Decision Making.
Ans
• The framework for data-driven decision making and problem solving can
be divided into five integrated stages:
• Problem or Opportunity Identification
• Collection of Relevant Data
• Data Pre-processing
• Model Building
• Communication and Development of the Data Analysis
• The success of analytics projects will depend on how innovatively the data
is used by the organization as compared to the mechanical use of analytical
tool. Although there are several routine analytics projects such as customer
segmentation, clustering, forecasting, and so on, highly successful
companies blend innovation with analytics.
• Problem or Opportunity Identification
• A good analytics project starts with the ability of the organization to
define the problem clearly. Domain knowledge is very important at
this stage of the analytics project. If one looks at Target’s prediction
model, this problem statement used a lot of insights about the retail
business such as price-insensitive customers, understanding
customer needs, possibility of long-term relationships, and the
market size and customer behavior.
• This will be a major challenge for many companies who do not have
capabilities to ask right questions.
• Collection of Relevant Data
• Once the problem is defined clearly, the project team should identify
and collect the relevant data. This may be an iterative process since
‘relevant data’ may not be known in advance in many analytics
projects. The existence of ERP systems will be very useful at this
stage. In addition to the data available within the organization, they
have to collect data from external sources in many cases.
 Data Pre-processing
• Anecdotal evidence suggests that data preparation and data
processing take a significant proportion of any analytics project cycle
time. This would include data cleaning and data imputation and the
creation of additional variables such as interaction variables and
dummy variables in the case of predictive analytics projects.
• Model Building
• Analytics model building is an iterative process that aims to find the
best model. Several analytical tools and solution procedures will be
used to find the best analytical model in this stage.
• To avoid over fitting it is important to create several training and
validation data sets.
ByAsst.Prof. Aaska Bhatt Page 17
Business Analytics READING MATERIAL MBA SEM - 2
 Communication and Development of the Data Analysis
• The primary objective of the analytics is come up with actionable
items that can be deployed.
• The communication of the analytics output to the top management
and clients plays a crucial role. Innovative data visualization
techniques may be used in this stage.
• Deployment of the model may involve developing software solutions
and products, such as recommender engine.

Q – 10 Explain core business functions.

Ans
• Sales and Marketing
• Product/Service Delivery
• Quality
• Product Development
• Accounting
• Technology
• Human Resource Management
• Supplier Management
• Legal and Compliance
• Corporate Planning
• Procurement (Purchases)

Q – 11 What is Business Analytics. Explain Characteristics of Data.

Ans
• 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.
• Business analytics is the practice of iterative, methodical exploration of
an organization’s data with emphasis on statistical analysis.

ByAsst.Prof. Aaska Bhatt Page 18

Business Analytics READING MATERIAL MBA SEM - 2
• Business Analytics is used by companies committed to data-driven
decision making.
• 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 analyzing the data to create value to organizations.
• The analysis of enterprise data from multiple perspectives and enhance
the performance of business.
• Business Analytics is heavily dependent on data.
• For its successful implementation, business analytics requires a high
volume of high quality data.
The challenge faced by business analytics remains the storage, integration,
reconciliation of data from multiple disparate sources across several business
functions and the continuous updates to the data warehouse.
1. Volume (Data Quantity)
• The name 'Big Data' itself is related to a size which is enormous.
• Size of data plays very crucial role in determining value out of data.
• Also, whether a particular data can actually be considered as a Big Data
or not, is dependent upon volume of data.
• Hence, 'Volume' is one characteristic which needs to be considered
while dealing with 'Big Data'.
• The smart phones, the data they create and consume; sensors
embedded into everyday objects will soon result in billions of new,
constantly-updated data feeds containing environmental, location, and
other information, including video.
2. Velocity (Data Speed)
• The term 'velocity' refers to the speed of generation of data. How fast
the data is generated and processed to meet the demands, determines
real potential in the data.
• Big Data Velocity deals with the speed at which data flows in from
sources like business processes, application logs, networks and social
media sites, sensors, mobile devices, etc. The flow of data is massive and
continuous.
• High-frequency stock trading algorithms reflect market changes within
microseconds.
• Machine to machine processes exchange data between billions of
devices.
• Infrastructure and sensors generate massive log data in real time.
• On-line gaming systems support millions of concurrent users, each
producing multiple inputs per second.

ByAsst.Prof. Aaska Bhatt Page 19

Business Analytics READING MATERIAL MBA SEM - 2
3. Variety (Data Types)
 Variety refers to heterogeneous sources and the nature of data, both
structured and unstructured.
 During earlier days, spreadsheets and databases were the only sources of
data considered by most of the applications.
 Now days, data in the form of emails, photos, videos, monitoring devices,
PDFs, audio, etc. is also being considered in the analysis applications.
 Big data isn’t just numbers, dates, and strings. Big data is also geospatial
data, 3D data, audio and video, and unstructured text, including log files
and social media.
Traditional database systems were designed to address smaller volumes of
structured data, fewer updates or a predictable, consistent data structure.

Q – 12 What is Business Analytics? Explain Nature of Data.

Ans
1. Qualitative
2. Quantitative
1. Qualitative
• Qualitative Data refers to the data that provides insights and understanding
about a particular problem.
• It can be approximated but cannot be computed. Hence, the researcher
should possess complete knowledge about the type of characteristic, prior
to the collection of data.
• The nature of data is descriptive and so it is a bit difficult to analyze it. This
type of data can be classified into categories, on the basis of physical
attributes and properties of the object. The data is interpreted as spoken or
written narratives rather than numbers. It is concerned with the data that is
observable in terms of smell, appearance, taste, feel, texture, gender,
nationality and so on.
• The methods of collecting qualitative data are:
 Focus Group
 Observation
 Interviews
 Archival Materials like newspapers.

ByAsst.Prof. Aaska Bhatt Page 20

Business Analytics READING MATERIAL MBA SEM - 2
2. Quantitative
• Quantitative Data, as the name suggests is one which deals with quantity or
numbers.
• It refers to the data which computes the values and counts and can be
expressed in numerical terms is called quantitative data.
• In statistics, most of the analysis is conducted using this data.
• Quantitative data may be used in computation and statistical test. It is
concerned with measurements like height, weight, volume, length, size,
humidity, speed, age etc. The tabular and diagrammatic presentation of
data is also possible, in the form of charts, graphs, tables, etc. Further, the
quantitative data can be classified as discrete or continuous data. the
methods used for the collection of data are:
 Surveys
 Experiments
 Observations and Interviews

Q – 13 What is difference between Qualitative and Quantitative Data.

ANs
1. The data type, in which the classification of objects is based on attributes
(quality), is called qualitative data. The type of data which can be counted
and expressed in numbers and values is called quantitative data.
2. The research methodology is exploratory in qualitative data, i.e. to provide
insights and understanding. On the other hand, quantitative data is
conclusive in nature which aims at testing a specific hypothesis and
examines the relationships.
3. The approach to inquiry in the case of qualitative data is subjective and
holistic whereas quantitative data has an objective and focused approach.
4. When the data type is qualitative the analysis is non-statistical. As opposed
to quantitative data which uses statistical analysis.
5. In qualitative data, there is an unstructured gathering of data. As against
this, data collection is structured in quantitative data.
6. While qualitative data determines the depth of understanding, quantitative
data ascertains the level of occurrence.
7. Quantitative data is all about ‘How much or how many’. On the contrary,
qualitative data asks ‘Why?’
8. In qualitative data the sample size is small and that too is drawn from non-
representative samples. Conversely, the sample size is large in quantitative
data drawn from the representative sample.
9. Qualitative data develops initial understanding, i.e. it defines the problem.
Unlike quantitative data, which recommends the final course of action?

ByAsst.Prof. Aaska Bhatt Page 21

Business Analytics READING MATERIAL MBA SEM - 2

Q – 14 What is Business Analytics? Explain Applications of Business Analytics.

Ans
Finance
BA is of utmost importance to the finance sector. Data Scientists are in high
demand in investment banking, portfolio management, financial planning,
budgeting,forecasting,etc.
For example: Companies these days have a large amount of financial data. Use
of intelligent BA tools can help use this data to determine the products’ prices.
Also, on the basis of historical information BAs can study the trends on the
performance of a particular stock and advise the client on whether to retain it
or sell it.
Marketing
Studying buying patterns of consumer behaviour, analysing trends, help in
identifying the target audience, employing advertising techniques that can
appeal to the consumers, forecast supply requirements, etc.
For example: Use BA to gauge the effectiveness and impact of a marketing
strategy on the customers. Data can be used to build loyal customers by giving
them exactly what they want as per their specifications.
HRProfessionals
HR professionals can make use of data to find information about educational
background of high performing candidates, employee attrition rate, number of
years of service of employees, age, gender, etc. This information can play a
pivotal role in the selection procedure of a candidate.
For example: HR manager can predict the employee retention rate on the basis
of data given by BA.
CRM
BA helps one analyse the key performance indicators, which further helps in
decision making and make strategies to boost the relationship with the
consumers. The demographics, and data about other socio-economic factors,
purchasing patterns, lifestyle, etc., are of prime importance to the CRM
department.
For example: The company wants to improve its service in a particular
geographical segment. With data analytics, one can predict the customer’s
preferences in that particular segment, what appeals to them, and accordingly
improve relations with customers.
Manufacturing
BA can help you in supply chain management, inventory management,
measure performance of targets, risk mitigation plans, improve efficiency in
the basis of product data, etc.
For example: The Manager wants information on performance of a machinery
which has been used past 10 years. The historical data will help evaluate the
performance of the machinery and decide whether costs of maintaining the
machine will exceed the cost of buying new machinery.
CreditCardCompanies
Credit card transactions of a customer can determine many factors: financial
health, life style, preferences of purchases, behavioural trends, etc.
For example: Credit card companies can help the retail sector by locating the
target audience. According to the transactions reports, retail companies can
predict the choices of the consumers, their spending pattern, and preference
over buying competitor’s products, etc. This historical as well as real-time

ByAsst.Prof. Aaska Bhatt Page 22

Business Analytics READING MATERIAL MBA SEM - 2
information helps them direct their marketing strategies in such a way that it
hits the dart and reaches the right audience.
Other than above, BA is helpful in various areas such as the fraud detection,
health-care, defence, sales, etc. Data can be an intelligent tool to foster your
brand name in the economic market. BA lets you exploit this opportunity to
make better business decisions.

Q – 15 What is Business Analytics? Explain Benefits of Business Analytics.

Ans
 Businesses can utilize outside intelligence while taking decisions
 Access to social data from search engines and sites like face book,
twitter are enabling organizations to fine tune their business
strategies
 Improved customer service
 Traditional customer feedback systems are getting replaced by new
systems designed with 'Big Data' technologies. In these new systems,
Big Data and natural language processing technologies are being used
to read and evaluate consumer responses.
 Better operational efficiency
 'Big Data' technologies can be used for creating staging area or
landing zone for new data before identifying what data should be
moved to the data warehouse. In addition, such integration of 'Big
Data' technologies and data warehouse helps organization to offload
infrequently accessed data.
 Early identification of risk to the product/services, if any
 Improving the decision making process ( quality & relevance)
 Speeding up of decision making process
 Better alignment with strategy
 Realising cost efficiency
 Responding to user needs for availability of data on timely basis
 Improving competitiveness
 Producing a single , unified view of enterprise information
 Synchronising financial and operational strategy
 Increase revenues
 Sharing information with a wider audience

ByAsst.Prof. Aaska Bhatt Page 23

Business Analytics READING MATERIAL MBA SEM - 2
Q – 16 Explain Tools of Business Analytics
Ans
Business Analytics is a fast growing field and there are many tools available in
the market to serve the needs of organizations. The range of analytical
software goes from relatively simple statistical tools in spreadsheets (e.g., MS
Excel) to sophisticated business intelligence suites (e.g., SAS, Oracle, SAP,IBM
among the big players). Open source tools like R and Weka are also gaining
popularity. Besides these, companies develop in-house tools designed for
specific purpose.
1) MS Excel: Excel is an excellent reporting and dash boarding tool. For
most business projects, even if one run the heavy statistical analysis on
different software but one will still end up using Excel for the reporting
and presentation of results. Excel can handle tables with upto 1 million
rows making it a powerful yet versatile tool.
2) SAS: It is the most commonly used software in the Indian analytics
market despite its monitoring pricing. SAS software has wide ranging
capabilities from data management to advanced analytics.
3) SPSS Modeler: SPSS Modeler is a data mining software tool by SPSS Inc.,
an IBM company. It was originally named SPSS Clementime. This tool has
an intuitive GUI and its point-and-click modelling capabilities are very
comprehensive.
4) Salford Systems: It provides a host of predictive analytics and data
mining tools for businesses. The software is easy to use and learn.
5) KXEN: It is one of the few companies that are driving automated
analytics. Their products are easy to use, fast and can work with large
amounts of data. Some users may not like the fact that KXEN works like
a ‘black box’ and in most cases, it is difficult to understand and explain
the result.
6) MATLAB: It is statistical computing software developed by MathWorks,
MATLAB allow matrix manipulations, plotting of functions data,
implementation of algorithms and creation of user interfaces. There are
many add-on toolboxes that extend MATLAB to specific areas of
functionality, such as statistics, finance, image processing,
bioinformatics, etc. MATLAB is not free software. However, there are
clones like Octave and Scilab which are free and have similar
functionality.
7) R: R is a programming language and software environment for statistical
computing and graphics. The R language is an open source tool and is
widely used by the academia. For business users, the programming
language does represent a hurdle. However, there are many GUIs
available that can sit on R and enhance its user-friendlness.

ByAsst.Prof. Aaska Bhatt Page 24

Business Analytics READING MATERIAL MBA SEM - 2

MODULE – 2

Q – 1 What is Digital Data? Explain Types of Digital Data.

Ans

“Digital data is data that represents other forms of data using specific machine
language systems that can be interpreted by various technologies. The most
fundamentals of these systems is a binary system, which simply stores complex
audio, video or text information in a series of binary characters, traditionally
ones and zeros, or “on” and “off” values.”

Digital data is certainly web data, and it is also other types of digital data:
mobile data, social data, Customer Relationship Data (CRM), Business
Intelligence (BI) data and other digital data related to transactions, behaviours,
and audiences.

Types of Digital Data:

Data growth has seen exponential acceleration since the advent of the
computer and Internet. In fact, the computer and Internet duo has imparted
the digital form to data. Digital data can be classified into three forms:

 Unstructured
 Semi-Structured
 Structured

Unstructured:

This is the data which does not conform to a data model or is not in a form
which can be used easily by a computer program. About 80-90% data of an
organization is in this format: for example, memos, chat rooms, PowerPoint
presentation, images, videos, letters, researches, white papers, body of an
email, etc.

Semi-Structured data:

This is the data which does not conform to a data model but has some
structured. However, it is not in a form which can be used easily by a computer
program. For example, email, XML, markup languages like HTML, etc.
Metadata for this data is available but is not sufficient.
ByAsst.Prof. Aaska Bhatt Page 25
Business Analytics READING MATERIAL MBA SEM - 2

Structured data:

This is the data which is in an organized form (e.g., in rows and columns) and
can be easily used by a computer program. Relationships exist between
entities of data, such as classes and their objects. Data stored in databases is
an example of structured data.

Text and Hypertext

Of all the data types, text requires the least amount of storage and processing
power in a computer. Common text formats include Word documents, PDF
documents, and HTML and Text documents. Hypertext is text that contains a
link to other information or files.

Audio:

It can be stored in many different formats that each has their own advantage
and disadvantage. Digitized sound takes small pieces or ‘samples’ of a sound
and stores them all digitally. The quality of the sound depends on how fast the
sample is taken and the bits available for storage. A music CD is samples at 44
kHz which means it has 44100 samples per seconds.

Graphics:

There are two main types of graphics: Bitmap and Vector. For each type of
graphics there are also different formats. For example, digital camera use
bitmapped images and store photos in the JPEG format. Drawing programs
such as Illustrator can store vector images in formats such as SVG. Other
programs such as Photoshop, Paint and Sketch Up also have their own graphics
formats.

Video:

There are many different video file formats available today and each one has
its own advantages and disadvantages for different applications. Some video
formats may be more suitable for web streaming while others may be more
suitable for televisions or mobile devices. Common video formats include MP4,
AVI, WMV, FLV and QuickTime (MDV).

ByAsst.Prof. Aaska Bhatt Page 26

Business Analytics READING MATERIAL MBA SEM - 2

Animation:

There are several animation file formats that are used by different animation
authoring programs such as the SWF format used by Adobe Flash. However,
animations can be exported to file formats that are also used for video such as
MP4 and FLV.

Q – 2 Explain characteristics of Structured Data.

Ans

Data coming from databases such as Access, OLTP systems, SQL as well
spreadsheets such as Excel, etc., are all in structured format. Structured data
conforms to a data model. Here, the data is organized in fixed/variable length
fields of a record/file. A project table with its schema definition.

Structured data is organized in semantic chunks (entities) with similar entities

grouped together to form relations or classes. Entities in the same group have
the same description, i.e. attributes.

 Conforms to a data model

 Similar entities are grouped
 Attributes in a group are the same
 Definition, format, and meaning of data is explicitly known
 Data is stored in the form of rows and columns, e.g., relational database
 Data resides in fixed fields within a record or file

Q – 3 Explain sources of Structured Data.

Ans

Sources of Structured Data:

 Databases, e.g., Access

 Spreadsheets
 SQL
 OLTP Systems

ByAsst.Prof. Aaska Bhatt Page 27

Business Analytics READING MATERIAL MBA SEM - 2

Description for all entities in a group (schema)

 Have the same defined format

 Have a predefined length
 And follow the same order.

Q – 4 Where Does Structured Data Come From?

Data coming from databases such as Access, OLTP systems, SQL as well
spreadsheets such as Excel, etc. are all in the structured format.

To summarize, structured data

 Consists of fully described data sets.

 Has clearly defined categories and sub-categories.
 Is placed neatly in rows and columns.
 Goes into the records and hence the database is regulated by a well-
defined structure.
 Can be indexed easily either by the DBMS itself or manually.

It’s So Easy With Structured Data

 Storage: Both defined and user-defined data types help with the storage
of structured data.
 Scalability: Scalability is not generally an issue with increase in data.
 Security: Ensuring security is easy.
 Update and Delete: Updating, deleting, etc. is easy due to structured
form.

Hassle-Free Retrieval

 Retrieving information: A well-defined structure helps in easy retrieval

of data.
 Indexing and searching: Data can be indexed based not only on a text
string but also on other attributes. This enables streamlined search.
 Mining Data: Structured data can be easily mined and knowledge can be
extracted from it.
 BI Operations: BI works extremely well with structured data. Hence data
mining, warehousing, etc. can be easily undertaken.

ByAsst.Prof. Aaska Bhatt Page 28

Business Analytics READING MATERIAL MBA SEM - 2

Q – 5 Explain characteristics of Unstructured Data.

Ans

Unstructured data refers to information that either does not have a pre-
defined data model and/or does not fit well into relational tables. Examples:
video files, audio files, chat conversations, wiki, blogs, Power Point
presentation, almost 80% of the data generated in enterprise is unstructured
data.

Characteristics of Unstructured data:

 Does not conform to any data model

 Has no easily identifiable structure
 Does not follow any rules or semantics
 Not easily usable by a program
 Not in any particular format or sequence
 Cannot be stored in the form of rows and columns as in a database.

Q – 6 Where does Unstructured Data come from?

Ans

Bitmap objects: for example, image, video, or audio files.

Textual objects: for example, Microsoft Word documents, emails, or Microsoft

Excel spreadsheets.

A Myth Demystified:

 Web pages are said to be unstructured data even though they are
defined by HTML, a markup language which has a rich structure. HTML is
solely used for rendering and presentations. The tagged elements do not
capture the meaning of the data that the HTML page contains. This
makes it difficult to automatically process the information in the HTML
page.
 Another characteristic that makes web pages unstructured data is that
they usually carry links and references to external unstructured content
such as images, XML files, etc.

ByAsst.Prof. Aaska Bhatt Page 29

Business Analytics READING MATERIAL MBA SEM - 2

Q – 7 How to manage unstructured data?

Indexing: In RDBMS system, data is indexed to enable faster search and

retrieval. On the basis some value in the data, index is defined which is nothing
but an identifier and represents the large record in the data set. In the case of
unstructured data, indexing helps in searching and retrieval. Based on text or
some other attributes, e.g., file name, the unstructured data is indexed.
Indexing in unstructured data is difficult because neither does this data have
any pre-defined attributes nor does it follow ant pattern or naming
convention. Text can be indexed based on a text string but in case of non-text
based files, e.g., audio/video, etc., indexing depends on file names.

Tags/Metadata: Using metadata, data in a document, etc. can be tagged. This

enables search and retrieval. But in unstructured data, this is difficult as little
or no metadata is available. Structure of data has to be determined which is
very difficult as the data itself has no particular format and is coming from
more than one source.

Classification/Taxonomy:

Data can be arranged in groups and placed in hierarchies based on the

taxonomy prevalent in an organization. However, classifying unstructured data
is difficult as identifying relationships between data is not an easy task. In the
absence of any structure or metadata or schema, identifying accurate
relationships and classifying is not easy. Since the data is unstructured, naming
conventions or standards across an organizations, thus making it difficult to
classify data.

CAS (Content Addressable Storage):

 It stores data based on their metadata. It assigns a unique name to every

object stored in it. The object is retrieval based on its content and not its
location. It is used extensively to store emails, etc.

 Data Management, however, does not end with the performance of

above-mentioned tasks. This is merely the beginning. Provisions now
need to be made to store this data as well. So the next question that
comes to mind is: How to store the unstructured data?

ByAsst.Prof. Aaska Bhatt Page 30

Business Analytics READING MATERIAL MBA SEM - 2

Q – 8 How to Store Unstructured Data?

 Storage Space: It is difficult to store and manage unstructured data. A

lot of space is required to store such data. It is difficult to store images,
videos, audios, etc.

 Scalability: As the data grows, scalability becomes an issue and the cost
of storing such data grows.

 Retrieve Information: Even if unstructured data is stored, it is difficult to

retrieve and recover from it.

 Security: Ensuring security is difficult due to varied sources of data, e.g.,

emails, web pages, etc.

 Update and delete: Updating and deleting unstructured data are very
difficult as retrieval is difficult due to no clear structure.

 Indexing/Searching: Indexing unstructured data is difficult and error-

prone as the structure is not clear and attributes are not pre-defined. As
a result, the search results are not very accurate. Indexing becomes all
the more difficult as the volume of data grows.

Q – 9 Explain the Solution to Storage Challenges of Unstructured Data?

 Changing Format: Unstructured data may be converted to formats

which are easily managed, stored and searched. For example, IBM is
working on providing a solution which will convert audio, video, etc. to
text.

 Developing new hardware: New hardware needs to be developed to

support unstructured data. It may either complement the existing
storage devices or may be a stand-alone for unstructured data.

 Storing in RDBMS/BLOBs: Unstructured data may be stored in relational

databases which support BLOBs (Binary Large Objects). While
unstructured data such as video or image file cannot be stored fairly
neatly into a relational column, there is no such problem when it comes
to storing its metadata, such as the date and time of its creation, the
owner or author of the data, etc.

ByAsst.Prof. Aaska Bhatt Page 31

Business Analytics READING MATERIAL MBA SEM - 2

 Storing in XML Format: Unstructured data may be stored in XML format

which tries to give some structure to it by using tags and elements.

Q – 10 How to Extract Information from Stored Unstructured Data?

 Interpretation: Unstructured data is not easily interpreted by

conventional search algorithm.

 Classification/Taxonomy: Different naming conventions followed across

the organization make it difficult to classify data.

 Indexing: Designing algorithms to understand the meaning of the

documents and then tagging or indexing them accordingly is difficult.

 Deriving Meanings: Computer programs cannot automatically derive

meaning/structure from unstructured data.

 File Formats: Increasing number of file formats makes it difficult to

interpret data.

 Tags: As the data grows, it is not possible to put tags manually.

Q – 11 UIMA: A Possible Solution for Unstructured Data?

 UIMA (Unstructured Information Management Architecture) is an open

source platform from IBM which integrates different kinds of analysis
engines to provide a complete solution for knowledge discovery from
unstructured data. In UIMA, the analysis engines enable integration and
analysis of unstructured information and bridge the gap between
structured and unstructured data.

 Various analysis engines analyze unstructured data in different ways

such as:

 Breaking up of documents into separate words.

 Grouping and classifying according to taxonomy.
 Detecting parts of speech, grammar, and synonyms.
 Detecting events and times.
 Detecting relationships between various elements.

ByAsst.Prof. Aaska Bhatt Page 32

Business Analytics READING MATERIAL MBA SEM - 2

Q – 12 What is Semi-structured data? Explain characteristics of unstructured

data.

Ans

Semi-structured data does not conform to any data model; i.e. it is difficult to
determine the meaning of data. Also, the data cannot be stored in rows and
columns as in a database. Semi-structured data, however, has tags and
markers which help to group the data and describe how the data is stored,
giving some metadata, but it is not sufficient for management and automation
of data. Example: XML (eXtensible Markup Language)

Characteristic of Semi-structured data:

 Does not conform to a data model but contains tags and

elements(metadata).
 Cannot be stored in the form of rows and columns as in a database.
 The tags and elements describe data is stored.
 No sufficient metadata.
 Attributes in a group may not be the same.
 Similar entities are grouped.
o For Ex., Address 1
o <house number> <street name><area name><city>
Address 2
o <house number> <street name><city>
o To: <Name>
o From: <Name>
o Subject: <Text>
o CC: <Name>
o Body: <Text, Graphics, Images, etc,>

Though the above email tags give us some metadata, the body of the email
contains no format. Neither does it convey the meaning of the data it contains.

Another example of semi-structured data is web pages. These pages have

content embedded within HTML and often have some degree of metadata
within tags. Email, XML, TCP/IP Packets, zipped files, etc. are semi-structured
data as all have certain amount of metadata.

ByAsst.Prof. Aaska Bhatt Page 33

Business Analytics READING MATERIAL MBA SEM - 2

Q – 13 Where does Semi-structured data come from?

Ans

 It is organized into semantic entities.

 Similar entities are grouped together.
 Entities in the same group may not have same attributes.
 The order of attributes is not necessarily important.
 Not always all attributes are required.
 Size of the same attributes in a group may differ.
 Type of the same attributes in a group may differ.

– Email XML

– TCP/IP packet Zipped files

– Binary Executable Mark-up Languages

– Integration of data from heterogeneous sources

 One way is:

– Name: Patrick Wood

– Email: [email protected], [email protected]

 Another way is:

– First Name: Mark

– Last Name: Taylor

– Email: [email protected]

 Yet Another way is:

– Name: Alex Wood

– Email: [email protected]

ByAsst.Prof. Aaska Bhatt Page 34

Business Analytics READING MATERIAL MBA SEM - 2

Q – 14 How to manage Semi-structured data?

Ans

 Schemas:
These can be used to describe the structure of data. Schema defines the
constraints on the structure, content of the document, etc. The problem
with schemas is that requirements are ever changing and the changes
required in data also lead to changes in schema.
 Graph-based data models:

These can be used to describe data. This is “schema-less” approach and

is also known as “self-describing” as data is presented in such a way that
it explains itself. The relationships and hierarchies are represented in the
form of a tree- like structure where the vertices contain the object or
entity and the leaves contain data

 XML:

These is widely used to score and exchange semi-structured data. It

allows the user to define tags to store data in hierarchical or nested
forms. Schemas in XML are not tightly coupled to data.

Q – 15 How to store Semi-structured data?

Ans

 Semi-structured data usually has an irregular and partial structure. Data

from a few sources may have partial structure while some may have
none at all. The structure of data from some source is implicit which
makes it very difficult to interpret relationships between data.
 In the case of semi-structured data, schema and data are usually tightly
coupled. Same queries may update both schema and data with the
schema being updated very frequently. Sometimes the distinction
between schema and data is very vague.
 For example, in some cases the data from source may contain the
“status”, i.e., true or false and consider it as a separate attribute. But in
some sources it may be an attribute of a larger set or class. These
problems complicate the designing of structure for the data.

ByAsst.Prof. Aaska Bhatt Page 35

Business Analytics READING MATERIAL MBA SEM - 2

Q – 16 Explain possible solution for Semi-structured data?

Ans

 Indexing
o Indexing data in a graph-based model enables quick search.
 OEM
o This data modeling technique allows for the data to be stored in a
graph-based data model which is easier to index a
 XML
o It allows data to be arranged in a hierarchical or tree-like structure
which enables indexing and searching.
 Mining Tools
o Various mining tools are available which search data based on
graphs, schemas, structures etc.

Q – 17 What is XML? Explain xml a solution for Semi-structured data

management.

Ans

 XML (eXtensible Markup Language) is an open source markup language

written in plain text. It is independent of hardware and software. It is
designed to store and transport data over the Internet. It allows data to
be stored in a hierarchical/inserted fashion.
 In XML, the user can define tags to store data. It also enables separation
of content (eXtensible Markup Language) and presentation (eXtensible
Stylesheet Language). XML is slowly emerging as a solution for semi-
structured data management.

Characteristics of XML Language are:

 XML (eXtensible Markup Language) is slowly emerging as a standard for

exchanging data over the web.
 It enables separation of content (eXtensible Markup Language) and
presentation (eXtensible Stylesheet Language).
 DTD’s (Document Type Descriptors) provide partial schemas for XML
documents.

ByAsst.Prof. Aaska Bhatt Page 36

Business Analytics READING MATERIAL MBA SEM - 2

XML: A Solution for Semi-Structured Data Management

 XML: eXtensible Markup Language

 What is XML? Open-source markup language written in plain text. It is
hardware and software independent.
 Does What? Designed to store and transport data over the Internet.
 How? It allows data to be stored in a hierarchical/nested structure. It
allows user to define tags to store the data.

XML.

<library>

<book year=“2005”>

<title>Database Management System</title>

<author><lastname> DATE </lastname></author>

<publisher> Addison </publisher>

</book>

<book year=“2008”>

<title>Relational Database Management System</title>

<author><lastname>Date</lastname></author>

<author><lastname>Darson</lastname></author>

<ISBN><number> 01-23-456 </number></ISBN>

</book>

</library>

ByAsst.Prof. Aaska Bhatt Page 37

Business Analytics READING MATERIAL MBA SEM - 2

Q – 18 Explain the term OLTP?

Ans

OLTP: OLTP systems refer to a class of systems that manage transaction-

oriented applications. These applications are mainly concerned with the entry,
storage, update and retrieval of data. Example: Airline/railway ticket
reservations/point on sale system at a supermarket store.

 Point-of-sale (POS) system in a supermarket store.

 OLTP system designed to support on-line transaction processing and
query processing. In other words, the POS of the supermarket store was
an OLTP system.
 OLTP systems refer to a class of systems that manage transaction-
oriented application. These applications are mainly concerned with the
entry, storage, and retrieval of data. They are designed to cover most of
the day-to-day operations of an organization such as purchasing,
inventory, manufacturing, payroll, accounting, etc. OLTP systems are
characterized by a large number of short on-line transactions such as
INSERT, UPDATE, and DELETE.
 Almost all industries today (including airlines, mail-order, supermarkets,
banking, insurance, etc.) use OLTP system to record transactional data.
 The data captured by OLTP systems is usually stored in commercial
databases. For example, the database of a supermarket store consists of
the following tables to store the data about its transactions, products,
employees, inventory supplies, etc.
o Transactions.
o ProductMaster.
o EmployeeDetails.
o InventorySupplies
o Suppliers, etc.

Queries that an OLTP System can Process

 Let us consider the example of the supermarket store POS system, which
is an OLTP system. Given below are a set of queries that a typical OLTP
system is capable of responding to:
 Search for a particular customer’s record
ByAsst.Prof. Aaska Bhatt Page 38
Business Analytics READING MATERIAL MBA SEM - 2

 Retrieve the product description and price of a particular product.

 Filter all products with a unit price equal to or above $25.
 Filter all products supplied by a particular supplier.
 Search and display the record of a particular supplier.

Advantages of OLTP System

 Simplicity:
o It is designed typically for use by clerks, cashiers, clients, etc.
 Efficiency:
o It allows its users to read, write, and delete data quickly.
 Fast query processing:
o It responds to user actions immediately and also supports
transaction processing on demand.

Challenges of an OLTP System

 Security:
o An OLTP system requires concurrency control (locking) and
recovery mechanisms (logging).

OLTP system data content not suitable for decision making:

o A typical OLTP system manages the current data within an

organization/enterprise. This current data is far too detailed to be
easily used for decision making.
o OLAP differs from traditional databases in the way data is
conceptualized and stored.
o In OLAP data is help in the dimensional from rather than the
relational form. OLAP’s life blood is multi-dimensional data.
o OLAP tools are based on the multidimensional data model.
o The multi-dimensional data model views data in the form of a
data cube.
o This data as captured by the OLTP system is under the following
column headings: Section, ProductCategoryName, YearQuarter,
and SalesAmount.

ByAsst.Prof. Aaska Bhatt Page 39

Business Analytics READING MATERIAL MBA SEM - 2

Q – 19 Explain the term OLAP?

Ans

OLAP (On-Line Analytical Processing): In OLAP, data is held in dimensional

from rather than relational form. OLAP’s life blood is multidimensional data.
OLAP tools are based on multidimensional data model. The multidimensional
data model views data in the form of a data cube.

 Example: Assume a financial analyst reports that the sales by the

company have gone up. The next question is “Which Section is most
responsible for this increase?” The answer to this question is usually
followed by a barrage of questions such as “Which store in this Section is
most responsible for the increase?” or “Which particular product
category or categories registered the maximum increase?” The answers
to those are provided by multidimensional analysis or OLAP.

Queries that an OLAP System can Process

 What will be the future sales trend for “Accessories” in the “Kids”
Section?

 Given the customers buying patterns, will it be profitable to launch

product “XYZ” in the “Kid’s Section?”

 What impact will a 5% increase in the price of products have on the

customers?

Advantages of an OLAP System

 Multidimensional data representation

 Consistency of information

 “What if” analysis

 Provides a single platform for all information and business needs –

planning, budgeting, forecasting, reporting, and analysis.

 Fast and interactive ad hoc exploration.

ByAsst.Prof. Aaska Bhatt Page 40

Business Analytics READING MATERIAL MBA SEM - 2

Q – 20 Explain different types of OLAP Architectures.

Ans

Different types of OLAP architectures are:

 Multidimensional OLAP (MOLAP)

 Relational OLAP (ROLAP)
 Hybrid OLAP (HOLAP)

 MOLAP (Multidimensional On-Line Analytical Processing)

o In MOLAP, data is stored in a multidimensional cube. The storage

is in proprietary formats and not in the relational database.

 Advantages:

o Fast data retrieval

o Optimal for slicing and dicing

o Can perform complex calculations: All calculations are pre-

generated when the cube is created.

 Disadvantages:

o Limited in the amount of the data that it can handle. The reason
being as all calculations are regenerated when the cube is created,
it is not possible to include a large amount of data in the cube
itself. The cube, however, can be derived from a large amount of
data.

o Additional investments in human and capital resources may be

required as the cube technology is proprietary and might not exist
in the enterprise.

 ROLAP (Relational On-Line Analytical Processing)

o In ROLAP, data is stored in a relational database. In essence, each

action of slicing and dicing is equivalent to adding a “WHERE”
clause in the SQL statement.

ByAsst.Prof. Aaska Bhatt Page 41

Business Analytics READING MATERIAL MBA SEM - 2

 Advantages:
o Relational OLAP tools can perform more robust types of analysis
than multi-dimensional OLAP, incorporating a wider range of data
views.
o It supports flexible analysis i.e., the analysts can explore the data
in an ad hoc fashion.
o It allows multiple multi-dimensional views over the same data
tables, to support different business areas.
o It can support large volumes of detailed data for “drill down”
analysis.
o The processing load can be shifted onto a server platform,
allowing these to be used with network computers or over an
Intranet or the Internet.
o There is no requirement to return aggregations when additional
data is added to the relational database.
 Disadvantages:
o Limited in the amount of the data that it can handle. The reason
being as all calculations are regenerated when the cube is created,
it is not possible to include a large amount of data in the cube
itself. The cube, however, can be derived from a large amount of
data.
o Additional investments in human and capital resources may be
required as the cube technology is proprietary and might not exist
in the enterprise.
 HOLAP (Hybrid On-Line Analytical Processing)
o HOLAP technologies attempt to combine the advantages of
MOLAP and ROLAP.
o On the one hand, HOLAP leverages the greater scalability of
ROLAP.
o On the other, HOLAP leverage the cube technology for faster
performance and for summary-type information.
o However, HOLAP can also “drill through” into the underlying
relational data from the cube.

ByAsst.Prof. Aaska Bhatt Page 42

Business Analytics READING MATERIAL MBA SEM - 2

Q – 21 What is the difference between OLTP and OLAP?

Ans

Feature OLTP OLAP

Focus Data in Data out
Source of data Operational/Transactional Data extracted from
Data various operational data
sources, transformed
and loaded into the data
warehouse.
Purpose of data Manages basic business Assists in planning,
tasks budgeting, forecasting,
and decision making
Data Contents Current data, Far too Historical data. Has
detailed-not suitable for support for summarized
decision making and aggregation. Stores
and manages data at
various levels of
granularity, thereby
suitable for decision
making
Inserts and updates Very frequent updates and Periodic updates to
inserts refresh the data
warehouse.
Queries Simple queries, often Often complex queries
returning fewer records involving aggregations
Processing speed Usually returns fast Queries usually take a
long time to execute and
return
Space requirements Relatively small, Comparatively huge
particularly when historical because of the existence
data is either purged or of aggregation
archived structures and historical
data.
Database Design Typically normalized tables, Typically de-normalized
OLTP system adopts ER tables; uses star or
Model. snowflake schema.
Access Field level access Typically aggregated
access to data of
business interest
ByAsst.Prof. Aaska Bhatt Page 43
Business Analytics READING MATERIAL MBA SEM - 2

Operations Read/Write Mostly used

Backup and Recovery Regular backups of Instead of regular
operational data are backups, data
mandatory. Requires warehouse is refreshed
concurrency control and periodically using data
recovery mechanisms from operational data
sources
Indexes Few Many
Joins Many Few
Derived data and Rare Common
aggregation

Q – 22 Explain Data Models for OLTP and OLAP.

Ans

 Data Model for OLTP

o Employee (EmployeeID is the primary key)
o EmployeeAddress (EmployeeID is a foreign key referencing to the
EmployeeID attribute of Employee entity.)
o EmployeePayHistory (EmployeeID is a foreign key referencing to
the EmployeeID attribute of Employee entity.)

We see the following two relationships:

There is a (1: M cardinality) between Employee and EmployeeAddress entities.

This means that an instance of Employee entity can be related with multiple
instances of EmployeeAddress entity.

There is also a (1:M cardinality) between Employee and EmployeePayHistory

entites. This means that an instance of Employee entity can be related with
multiple instances of EmployeePayHistory entity.

Data Model for OLAP

A multidimensional model can exist in the form of a Star Schema, a Snowflake

schema, or a fact Constellation/Galaxy schema.

– We consider here two models:

ByAsst.Prof. Aaska Bhatt Page 44

Business Analytics READING MATERIAL MBA SEM - 2

– Star and Snowflake.

– Star Model

– The star data model has a central fact table which is connected to
four dimensions.

– Each dimension is represented by only one table and each table

has a set of attributes.

 Data Model for OLAP

o A multidimensional model can exist in the form of a Star Schema,
a Snowflake schema, or a fact Constellation/Galaxy schema. We
consider here two models: Star and Snowflake.
 Star Model
o The star data model has a central fact table which is connected to
four dimensions.
o Each dimension is represented by only one table and each table
has a set of attributes.
 Snowflake Model
o The Snowflake schema is a central fact table which is connected to
four dimensions. The “Product” dimension is further normalized
to “Product Category” dimension. Similarly, the “Employee”
dimension is further normalized to the “Department” dimension.
By now, you would have guessed that normalized of the
dimension tables definitely helps in reducing redundancy;
however, it adversely impacts the performance as more joins will
be needed to execute a query.

Q – 23 Explain OLAP Operations.

Ans

Data warehouses use Online Analytical Processing (OLAP) to formulate and

execute user queries.

OLAP is an SQL-based methodology that provides aggregate data along a set of

dimensions, in which:

ByAsst.Prof. Aaska Bhatt Page 45

Business Analytics READING MATERIAL MBA SEM - 2

 Each dimension is described by a set of attributes, i.e., each dimension

table includes a set of attributes.
 Each measure depends on a set of dimensions that provides context for
the measure, e.g., for the reseller company data warehouse, the
measure is number of sold units, which are described by the
corresponding location, time and item type.
 All dimensions are assumed to uniquely determine the measure. For
example, for the reseller company the location, time producer and item
type provide all necessary information to determine context of a
particular number of sold units.

There are five basic OLAP Operations:

1. ROLL UP: This operation performs aggregation on a data cube in any of the
following way:

i) By climbing up a concept hierarchy for a dimension

ii) By dimension reduction

2. DRILL DOWN: Drill down operation is reverse of the roll-up. This operation is
performed by either of the following way:

i) By stepping down a concept hierarchy for a dimension

ii) By introducing new dimension.

3. SLICE: The slice operation performs selection of one dimension on a given

cube and gives us a new sub cube.

4. DICE: The Dice operation performs selection of two or more dimension on a

given cube and gives us a new sub cube.

5. PIVOT: This is a visualization operation that rotates the data axes in an

alternative presentation of the data.

The pivot operation is also known as rotation. It rotates the data axes in view
in order to provide an alternative presentation of data.

ByAsst.Prof. Aaska Bhatt Page 46

Business Analytics READING MATERIAL MBA SEM - 2

Q – 24 Explain applications of OLAP.

Ans

OLAP applications are used by a variety of the functions of an organization

such as:

1) Finance and Accounting

a. Budgeting
b. Activity-based costing
c. Financial performance analysis
d. Financial modelling
2) Sales and Marketing
a. Sales analysis and forecasting
b. Market research analysis
c. Promotion analysis
d. Customer analysis
e. Market and customer segmentation
3) Production
a. Production planning
b. Defect analysis

Q – 25 Explain features of OLAP.

Ans

1) Fast: Fast means that the system targeted to deliver most responses to
user within about five second, with the simplest analysis taking no more
than one second and very few taking more than 20 seconds.
2) Analysis: Analysis means that the system can cope with any business
logic and statistical analysis that it relevant for the application and the
user, keep it easy enough for the target user.
3) Share: Share means that the system implements all the security
requirements for confidentiality and, if multiple write access is needed,
concurrent update location at an appropriated level not all applications
need users to write data back, but for the growing number that do, the
system should be able to handle multiple updates in a timely, secure
manner.

ByAsst.Prof. Aaska Bhatt Page 47

Business Analytics READING MATERIAL MBA SEM - 2

4) Multidimensional: Multidimensional is the key requirement. OLAP

system must provide a multidimensional conceptual view of the data,
including full support for hierarchies, as this is certainly the most logical
way to analyse business and organizations.
5) Information: Information is all of the data and derived information
needed? Wherever it is and however much is relevant for the
application. We are measuring the capacity of various products in terms
of how much input data they can handle, not how many gigabytes they
take to store it.

Q – 26 Explain Tools of Business Analytics.

Ans

Business Analytics is a fast growing field and there are many tools available in
the market to serve the needs of organizations. The range of analytical
software goes from relatively simple statistical tools in spreadsheets (e.g., MS
Excel) to sophisticated business intelligence suites (e.g., SAS, Oracle, SAP,IBM
among the big players). Open source tools like R and Weka are also gaining
popularity. Besides these, companies develop in-house tools designed for
specific purpose.

MS Excel: Excel is an excellent reporting and dash boarding tool. For most
business projects, even if one run the heavy statistical analysis on different
software but one will still end up using Excel for the reporting and presentation
of results. Excel can handle tables with upto 1 million rows making it a
powerful yet versatile tool.

SAS: It is the most commonly used software in the Indian analytics market
despite its monitoring pricing. SAS software has wide ranging capabilities from
data management to advanced analytics.

SPSS Modeler: SPSS Modellers is a data mining software tool by SPSS Inc., an
IBM company. It was originally named SPSS Clementine. This tool has an
intuitive GUI and its point-and-click modelling capabilities are very
comprehensive.

Salford Systems: It provides a host of predictive analytics and data mining

tools for businesses. The software is easy to use and learn.
ByAsst.Prof. Aaska Bhatt Page 48
Business Analytics READING MATERIAL MBA SEM - 2

KXEN: It is one of the few companies that are driving automated analytics.
Their products are easy to use, fast and can work with large amounts of data.
Some users may not like the fact that KXEN works like a ‘black box’ and in most
cases, it is difficult to understand and explain the result.

MATLAB: It is statistical computing software developed by MathWorks,

MATLAB allow matrix manipulations, plotting of functions data,
implementation of algorithms and creation of user interfaces. There are many
add-on toolboxes that extend MATLAB to specific areas of functionality, such
as statistics, finance, image processing, bioinformatics, etc. MATLAB is not free
software. However, there are clones like Octave and Scilab which are free and
have similar functionality.

R: R is a programming language and software environment for statistical

computing and graphics. The R language is an open source tool and is widely
used by the academia. For business users, the programming language does
represent a hurdle. However, there are many GUIs available that can sit on R
and enhance its user-friendliness.

ByAsst.Prof. Aaska Bhatt Page 49

Business Analytics READING MATERIAL MBA SEM - 2

MODULE – 3

Q – 1 Define the Terminology with Examples.

1) OLTP
2) OLAP
3) Business Intelligence (BI)
4) Data Mining
5) Big Data
6) Analytics
7) Data Science
8) Machine Learning
9) Data Lake

Ans

1) Online Transaction Processing (OLTP)

OLTP systems refer to a class of IT applications that process and manage

transaction-oriented digital data coming as inputs to the system and
produce updated databases and management reports for routine decision
making.

Example: An invoicing IT application will take inputs such as customer

name, shipping address, products purchased, product price, tax rates and
other parameters like date to generate a database (RDBMS Table) of
invoices and also provide management a summary report of daily or weekly
invoices raised by the company.

2) Online Analytical Processing (OLAP)

OLAP is the system software used to combine data from several IT

applications and provide business users with analyzed information to make
informed business decisions. While relational databases are considered to
be two-dimensional, OLAP data is multidimensional, meaning the
information can be compared in many different ways. Thus, OLAP allows
business users to easily and selectively extract and view data from different
points of view.

ByAsst.Prof. Aaska Bhatt Page 50

Business Analytics READING MATERIAL MBA SEM - 2

Example: A sales OLAP application will analyze product sales data from
different perspectives like sales by product, sales by region, sales by sales
person, and sales by partners and so on and compute on-the-fly totals,
averages, etc. to support decision making.

3) Business Intelligence (BI)

BI can be defined as a set of concepts and methodologies to improve the

decision making in business through the use of facts and fact-based IT
systems. Thus the goal of BI is improved business decisions. It is more than
technologies. It encompasses core concepts such as Extract-Transform-Lead
(ETL), Data Warehousing, Data marts, Metadata, Metrics and KPIs,
Scorecards, Dashboards and OLAP Reporting as well as methodologies
specific to ETL, Data Warehousing, Master Data Management and Data
Governance. BI uses technology tools for ETL, Data Warehousing,
Reporting, OLAP and Dashboards to achieve the decision support goals.

Example: A Human Capital Management data mart will get data from many
IT applications holding employee-specific data such as employee profile,
payroll, training, compensation, project performance and analyze employee
productivity by department, management level, years of experience, sex
and qualification. Such data marts will need ETL and OLAP reporting tool to
function.

4) Data Mining

Data mining is the computational process of shifting through existing

business data to identify new patterns and establish relationships that will
help in strategic decision making.

This process of data mining will require pre-processing of data by ETL or

getting data from data warehouse as well as post-processing for displaying
the new insights found.

• Data mining uses the following techniques to discover new patterns in

data:
– Association: Looking for patterns where one event is connected to
another event.
ByAsst.Prof. Aaska Bhatt Page 51
Business Analytics READING MATERIAL MBA SEM - 2

– Sequence analysis: looking for patterns where one event leads to

another later event.
– Classification: looking for new patterns and groups that could be
business value.
– Clustering: finding and visually documenting groups of facts not
previously known.
– Forecasting: discovering patterns in data that can lead to
reasonable predictions about the future business events,
conditions, etc.
– Anomaly detection: Finding unusual patterns in data sets.

Example:

• A data-mining specialist looking at online retail store purchases with

buyer demographic and psychographic data may find new segments of
buyers like individuals in old age homes, patients needing home
healthcare services, children in residential schools and customize
product/service offering for them.

5) Big Data

Big data is a high volume, high velocity, high variety information asset that
demands cost-effective and innovative forms of information processing for
enhanced business insight and decision-making. Hence, big data involves
homogenous voluminous data that could be structured (as in RDBMS) or
unstructured (as in blogs, tweets, face book, comments, and emails) and
the content is in different varieties (audio, pictures, large text). Handling
this type of data will need newer and innovative technologies for capturing,
storing, searching, integrating, analyzing and presenting newly found
insights.

Example: A big data application in telecom industry could be to analyze

millions of calls data, billing data, marketing data, competitive data, carrier
usage data, data usage and customer profiles to accurately recommend a
service that will meet the needs of the customer. In this situation, the
volume and split second response by the big data analytics application is
critical to engage the customer on call and close deals.

ByAsst.Prof. Aaska Bhatt Page 52

Business Analytics READING MATERIAL MBA SEM - 2

6) Analytics

Analytics is the computational field of examining raw data with the purpose
of finding, drawing conclusions and communicating inferences. Data
analytics focuses on inference the process of deriving a conclusion based
solely on what is already known by the researcher. Analytics relies on the
simultaneous application of statistics, operations research, programming to
quantify observations. Analytics often uses data visualization techniques to
communicate insight. Enterprise applies analytics to business data to
describe Exploratory Analytics, Predictive Analytics, and Prescriptive
Analytics. Increasingly, “Business Analytics” is used to describe statistical
and mathematical data analysis that clusters, segments, scores and predicts
what scenarios are most likely to happen in business.

Example: HR analytics can be seen as the application of statistical

techniques and synthesis of multiple sources to create meaningful insights-
say, employee retention in office X of the company is driven by factors Y
and Z.

7) Data Science

This is the science of extracting knowledge from data.

The aim of data science is again to bring out hidden patterns amongst
datasets using statistical and mathematical modeling techniques.

Data science is an interdisciplinary field (Artificial Intelligence, Algorithms,

Pattern recognition, NLP, Machine Learning, Analytics, Computer Science,
Programming, Data Mining, Business domain knowledge, etc.) about
processes and systems to extract knowledge or insights from data.

Data Scientists use their data and analytical ability to find and interpret rich
data sources, manage large amounts of data, combine data sources, ensure
datasets quality, create visualizations to communicate understanding of
analysis build mathematical models using the data, and enhance specific
industry vertical business performance. The data scientist processes more

ByAsst.Prof. Aaska Bhatt Page 53

Business Analytics READING MATERIAL MBA SEM - 2

heterogeneous, incomplete, messy and unstructured data than the highly

curetted data of the past.

Digitized text, audio and visual content, like sensor and blog data, etc. is the
sources. As individuals may not easily acquire all these competencies, it is
generally approached as a team competence.

Example: Data science solution for Electricity Company could encompass

areas such as:

 Improve their monitoring and forecasts of energy consumption.

 Predict potential power outages and equipment failures.
 Drastically reduce their operational costs.
 Pinpoint inefficiencies.
 Manage energy procurement with greater precision.
 This will need expertise to leverage smart grid data and model
capacity, consumption, losses, and outages and suggest measures
for optimum and profitable operations.

8) Machine Learning

Machine learning is a type of artificial intelligence (AI) that provides

computers with the ability to learn without being explicitly programmed.

Machine learning focuses on the development of computer programs that

can teach themselves to grow and change when exposed to new data.

Machine learning is about building algorithms that build a model out of the
input samples and make data driven decisions.

Machine learning leverages concepts like decision trees, regression,

clustering, collaborative filtering, artificial neural networks, inductive logic
programming, support vector machines, etc. to develop algorithms to
automate analytical model building to solve a particular type of problem.

Here, as models are exposed to new data, they are able to independently
adapt.

Example: Online recommendations that we see when you buy a book from
online book store use machine learning.
ByAsst.Prof. Aaska Bhatt Page 54
Business Analytics READING MATERIAL MBA SEM - 2

Here the algorithms look for people with similar profile and interests and
their buying habits to build a model. As and when users buy new books
from the store, it applies the filtering and ranking techniques to select high
probability buyers.

Most often it will be very successful recommendations. This is today used

for suggesting restaurants, hotel rooms to stay, electronics as well as gifts.

Thus, machine learning can promote quick and smart actions without
human intervention in real-time.

9) Data Lake

A data lake is a storage repository that holds a vast amount of collected raw
data in its native format until it is needed for processing. The concept of a
data lake is closely tied to Apache Hadoop and its ecosystem of open source
projects extensively used in big data applications. Data lakes reduce data
integration challenges. The data lake supports the following capabilities to:

 Capture and raw data at scale for a low cost.

 Store many types of data (Structured and Unstructured) in the same
repository.
 Perform transforming on the data.
 Schema on read design rather than schema at write time.
 Allow different communities of users like data scientists to gain
access to raw data for their processing needs without much latency.

Q – 2 Explain various perspectives of Managing Data.

Ans

Globally, organizations have harnessed the power of “business, science or

commerce facts or data” to make strategic decisions by using information
technology. Over the years the data has posed several challenges such as
volume, growth rate, variety of data, storage of data, retrieval of information,
processing of data including complex computation, searching, ordering,
merging, protecting, sharing, archival, backup and restoration. Many tools
have been developed to solve these data-related challenges. In this section let

ByAsst.Prof. Aaska Bhatt Page 55

Business Analytics READING MATERIAL MBA SEM - 2

us look at data from several perspectives before we start learning about

different technologies and tools associated with data handling. Here are some
perspectives to consider:

 Data lifecycle perspectives.

 Data storage for processing.
 Data processing and analysis perspective.
 Data from business decision support perspectives.
 Data quality management aspects.
 Related technology influences of data.

1. Data Lifecycle Perspective:

 Data management involves several activities like planning, collecting,

assuring, describing, preserving, searching, integrating, securing,
analyzing, formatting, sharing and archival.

Six distinguish phases in data management.

 Phase I: Initially, data was processed manually including recording

computing, reporting.

 Phase II: This phase used punched-card equipment and electro-

mechanical machines to sort and tabulate millions of records.

 Phase III: The third phase was the age of stored data on magnetic tapes
or disks and used computers to perform batch processing on sequential
files.

 Phase IV: The fourth phase introduced the concept of a RDBMS with a
database schema and online access to the stored data.

 Phase V: This phase automated access to relational databases and

added distributed and client-server processing.

 Phase VI: We are now in the early stages of sixth generation systems
that store richer data types, such as complex eBooks, images, voice and
video data.

ByAsst.Prof. Aaska Bhatt Page 56

Business Analytics READING MATERIAL MBA SEM - 2

2. Data Storage for Processing:

 We need to store data for processing or back-up or archiving for later

use. We need to understand the TYPES of data that need to be stored as
well as VOLUME.

 We as individuals need to store data – documents we author, slides we

prepare, spreadsheets we model, audio files we record, videos we use,
images we like and so on. We use hard disks, USB, cloud storage as
personal data stores.

 Network servers, public cloud, and private cloud for storage at a

function or department level.

 Enterprise level- huge storage capacity, running to several terabytes or

petabytes.

 Typically enterprises store critical data across multiple external storage

systems. Many are using virtualized storage systems with automate
provisioning. Enterprise implement storage groups in order to plan,
deploy, operate and administer storage system.

 Storage technology segments today include Storage Area Network

(SAN), back-up recovery archival systems, remote replication, storage
visualization, cloud storage and local replication.

 Some of the critical activities enterprises take-up to reliably store data

include:

 Managing data storage growth by increasing capacity.

 Designing and implementing disaster recovery processes.
 Deploying virtual storage environment.
 Consolidating servers.
 Implementing data archival solutions
 Moving data to cloud.

Enterprise considers availability, capacity, reliability, price-performance, power

consumption, and noise while deploying enterprise storage solutions. The
applications used in the enterprise determine the user access performance
needs.
ByAsst.Prof. Aaska Bhatt Page 57
Business Analytics READING MATERIAL MBA SEM - 2

3. Data Processing and Analysis Perspective

We can see several generations of computer hardware used for data

processing starting with the mainframe computers, mini computers, then
client-server based open computing systems using UNIX operating system,
personal computers, laptops and at present smart phones and tablets. While
laptops, PCs, smart phones and tablets are used for personal computing,
networked PCs, Internet connected smart devices can access even enterprise
applications. The next extension of such computing is the cloud computing.

Data Analysis Technologies:

1. Spreadsheets: spreadsheet represents use of software from PCs to tablets

for manipulation of data using the structure of rows and columns. This digital
document helps in numerical data entry, computation, sorting, searching,
aggregating, perform statistical analysis, graph datasets and even create basic
data mining tasks. MS Excel is an example of spreadsheet.

2. Ad-hoc Query Tools: In any enterprise not all decision makers are satisfied
with standard reports. They do not want to wait too long for the IT function to
extract data from multiple sources and prepare a new report to their
specification. Ad-hoc query tools allow extracting data from several RDBMS
and other types of files and extract needed information as and when required.
Crystal reports, BIRT, etc. are some examples of ad-hoc query tool.

3. ETL Tools: Extract –Transform-Load (ETL) is the process of combining

selected data from multiple forces, re-format them and create a new database
or a data warehouse. They support a library of standard transformations
needed to handle different data types and even automate data
transformation. Informatics is an example of such ETL tool.

4. Data Mining Tools: Data mining is the computational process of shifting

through existing business data to identify new patterns and establish
relationships that will help in strategic decision making. Such tools use
principles of association, classification and clustering of data to discover new
patterns. SAS miner is an example of data mining tool.

5. Business Intelligence (BI) and reporting Tools: When the enterprise creates
data marts and data warehouse, the users will need sophisticated reporting
ByAsst.Prof. Aaska Bhatt Page 58
Business Analytics READING MATERIAL MBA SEM - 2

tools that can insights using scorecards, dashboards, pivot charts, etc. BI
reporting tools allow end users to leverage the power of data warehouse by
building role-specific visualizations. It is important to note that many of these
tools support mobile devices like Smartphone's and tablets and alert users
whenever there is threshold breach.

6. Big Data Analytics Tools: According to the Gartner IT Glossary, Big Data is
high-volume, high-velocity and high-variety information asset that demands
cost-effective, innovative forms of information processing for enhanced insight
and decision making.

 Volume refers to the amount of data.

 Variety refers to the number of types of data.
 Velocity refers to the speed of data processing.
 R, Weka, Rapid miner, Hive, Mahout, Pentaho, BIRT/Actuate are some
examples of Big Data Analytics.

4. Data Quality Management Aspects:

The quality of the data has total impact on the “Findings” from the data set
and has a huge potential to misguide decision makers if the quality of the data
is poor. Enterprise spends significant money to track and correct the quality of
the data generated at different sources, departments, purchased, imported
from other external sources.

Some of the common data problems or causes of poor data in companies:

 1. Typographical errors: Often times the names, descriptions, etc.

manually entered into computers may have typographical errors or be
misspelled.

 2. Duplicates: There could duplicate records occurring that have the

same information. Such duplicates will pose problems when columns
with numeric information such as invoice amount, salary, etc. are
totaled generating erroneous totals. RDBMS can automatically check
such errors if set-up properly.

ByAsst.Prof. Aaska Bhatt Page 59

Business Analytics READING MATERIAL MBA SEM - 2

 3. Wrong Codes: Sometimes Company may have given codes to entities

like Employees, Items, etc. and that could be entered wrongly into
computers systems. Such records will be hard to trace.

 4. Missing fields or records: Data for some of the columns may be

missing or not entered at all. RDBMS avoids such problems by making
data fields mandatory. Sometimes an entire entry could have been
missed in the file system.

 5. Computed using incorrect formulae: Sometimes incorrect formulae

may have been entered into worksheets that are used for data capture.

 6. Non-conformance entries: It is always possible to enter numeric data

into an alphanumeric column type. If such errors have occurred during
data merge or bulk transfer, they may go undetected.

 7. Data Accuracy: It is possible that during data capture one may enter
numeric data, say, with 2 decimal places but while storing the system
may just store as integer. We lose the accuracy/precision during such
errors.

 8. Data correctness: When you have several numeric fields or

alphanumeric fields defined in a sequence and data is shifted by one
column, you can see the problems it can create.

 9. Un-updated data: Some of the data sources could have become

obsolete and data may not be current. Taking data from obsolete
sources will provide wrong business pictures to users.

 10. Swapped fields: Data like first name, last name could have got
interchanged while processing and can result in mismatches.

 11. Varying default values: System generated defaults for some columns
pose data analysis challenges.

Some of the attributes of data quality are:

 1. Relevance: Data meet the needs of users at different levels.

 2. Accuracy: Data values obtained are close to the true value.

ByAsst.Prof. Aaska Bhatt Page 60

Business Analytics READING MATERIAL MBA SEM - 2

 3. Credibility: Users have confidence in the statistics and trust the

objectivity of the data.

 4. Accessibility: Data can be readily located and accessed by authorized

users using tools.

 5. Validity: It refers to the correctness and reasonableness of data.

 6. Integrity: What data is missing important relationships linkages? The

inability to link related records together may actually introduce
duplication across your system.

 7. Interpretability: Users can readily understand, use and analyze the

data as well as describe the limitations of the data sets.

 8. Coherence: Statistical definitions and methods are consistent and any

variations in methodology that might affect data values are made clear.

 9. Timeliness: Delays between data collection and availability are

minimized, without compromising accuracy and reliability.

 10. Periodically: Vital statistics are shared regularly so that they serve
the ongoing needs of policy makers for up-to-date information.

 11. Confidentiality: Data-management practices are aligned with

established confidentiality standards for data storage, backup, transfer
and retrieval.

The scope of data governance covers areas like:

 1. Defining data policies related to creation, storage, security,

transmission, sharing, etc.

 2. Communication of data policies with IT and business function.

 3. Be the central agency for managing data requirements for all key
functions.

 4. Documentation structural data standards.

 5. Development of unified standard data models for persistence and

sharing.

ByAsst.Prof. Aaska Bhatt Page 61

Business Analytics READING MATERIAL MBA SEM - 2

 6. Active monitoring of data policy applications of data expectations.

 7. Assessing the requirements from across the line of business

landscape.

 8. Driving information security at all levels of the enterprise.

 9. Single agency for selection of data management tools in the

enterprise.

 10. Data architecture formulation, regulatory compliance and audits.

 11. Promote the value of enterprise data assets.

5. Related Technology Influences of Data

Trend shaping data landscape includes:

 1. Data Democratization: Knowledge workers at all levels in the

enterprise will have access to the information they need to perform
their roles.

 2. Internet of Things: More and more sensors will be capturing data at

its source and huge amounts of data will be available for the enterprise
to make use of.

 3. Algorithmic Decision Making: Enterprises will code the “Learning

algorithms” with patterns of decision making and automate decision
making in several areas.

 4. Unstructured and Real-time Data: Enterprises tend to focus on near

real-time data with technologies for in-memory processing for reducing
the latency of information availability for decision-making. Globally,
enterprises are looking at social media analytics and real-time analytics
for gaining competitive advantage in the marketplace.

 5. NOSQL Adoption Will Increase: Enterprises do not want to focus on

the structure of the data to be predefined as schema but would like to
interpret data at runtime and store data without predefined structure.

 6. Increasing Cloud Storage: Enterprises will be using cloud for data

integration and sharing to facilitate real-time analysis.
ByAsst.Prof. Aaska Bhatt Page 62
Business Analytics READING MATERIAL MBA SEM - 2

 7. Data Architecture and Data Lakes: Enterprises will dedicate teams to

build reliable data platforms and data lakes will be built to address
analytics needs.

Some of the social media trends include:

 1. In-the-moment-updates: Enterprises will support near real-time

updates about the areas of interest for the user groups or live streaming.

 2. Visual Search: Facilities to search content visually and with context

will increase. Rich media and cross social media platforms through
integration will also increase.

 3. Enhanced Mobile Commerce: Social media apps will allow more In-
app interaction features including purchase.

 4. Data privacy challenges: Users will witness more challenges with

regard to their personal data and security threats.

 5. Growing Importance of Contents: Social connections will leverage the

interaction platform for exchanging content of common interest.

Some of the cloud computing trends include:

 1. Hybrid Cloud Environment: Enterprises will use combination of public

and private clouds to reduce costs, support mobile workforce securely.

 2. Cloud-based Decision Frameworks: With data integration and real-

time data coming to cloud, many decision-making frameworks for
connected users are likely to happen in cloud platforms.

 3. Cloud Service Brokers: It is likely that agencies will be the

intermediates who will negotiate the services quality delivered by cloud
service providers.

 4. Applications Design Alignment: Enterprises will align many

applications to cloud environments to realize benefits of cloud.

Some of the mobility trends include:

• 1. Mobile-first Applications: Enterprises will develop mobile apps that

will exploit the core capabilities of the mobile devices and sensors.
ByAsst.Prof. Aaska Bhatt Page 63
Business Analytics READING MATERIAL MBA SEM - 2

• 2. Powerful Work-life Integration: Applications will provide smooth

handoffs to multiple devices to enable users working on multiple devices
to complete tasks.

• 3. Mobile Security: Enterprises continue to focus on security

considerations of mobile centric applications to ensure no data assets
are lost to hackers.

6. Data from Business Decision Suport Perspective

The age of the data and its value is highly related; data has the highest value as
soon as it is created. But considering the challenges like big data, distributed
storage, parallel processing, the trend is to find business value while the data is
still in computer memory.

The true potential data is realized through business results. While computer
systems are capable of delivering both data and refined data or information to
end users, they need to apply that information to take actions.

Data mining can produce new knowledge about employee attrition, new
market segments that can be targeted expanding the enterprise knowledge.
For example, increasing cross-channel sales which is a business value requires
data about your current customers and the products they own.

Q – 3 What is Business Intelligence. Explain Need of BI.

Ans

Howard Dresner, of the Gartner Group, in 1989 coined the team BI. He defined
BI as “a set of concepts and methodologies to improve decision making in
business through use of facts and fact-based systems”

The goal of BI is improved decision making. Yes, decisions were made earlier
too (without BI). The use of BI should lead to improved decision making.

BI is more than just technologies. It is a group of concepts and methodologies.

It is fact-based. Decisions are no longer made on gut feeling or purely on

hunch. They have to be backed by facts.

ByAsst.Prof. Aaska Bhatt Page 64

Business Analytics READING MATERIAL MBA SEM - 2

BI uses a set of processes, technologies, and tools (such as Informatica/IBM

Datastage/ Ab initio for extracting the data, SAS/IBM SPSS for analyzing the
data, and IBM Cognos/Business Object for reporting the data) to transform raw
data into meaningful information.

BI mines the information to provide beneficial insights; the insights then lead
to impactful decision making which in turn provides business benefits such as
increased profitability, reduced costs, improved operations etc.

Raw Data -> Meaningful Information -> Knowledge Discovery -> Beneficial
Insights -> Impactful Decisions -> Business Benefits

The term Business Intelligence (BI) refers to technologies, applications and

practices for the collection, integration, analysis and presentation of BI.

“The combination of different types of systems and tools which are vital for
strategic planning process of an organization is known as Business
Intelligence”.

An organization can store, gather, access and analyze the various corporate
data for supporting the decision making process with the help of these
systems. Various types of business intelligence in the field of customer
support, market segmentation, statistical analysis, inventory and distribution
analysis, customer profiling are collected through BI systems.

For Example, an enterprise data warehouse in a bank will hold extracted

summarized data taken from several OLTP IT applications in subject areas of
loans, forex, corporate banking, personal banking, treasury, etc. Knowledge
workers analyse the data in the warehouse from multiple perspectives like
time(Day/Week/Month/Year), Bank location, Customer category to make
business decisions and stay ahead of competition.

Need of Business Intelligence:

1) The main purpose of BI in a business is to help corporate executives,

business managers and other operational workers make better and
more informed business decisions.
2) Companies also use BI to cut costs, identify new business opportunities,
and spot inefficient business processes ripe for re-engineering.

ByAsst.Prof. Aaska Bhatt Page 65

Business Analytics READING MATERIAL MBA SEM - 2

3) A Business Intelligence solution helps in producing accurate reports by

extracting data directly from data source.
4) Business Intelligence solutions today eliminate the time consuming task
of consolidating data manually.
5) Since BI tools can produce recent data, it allows managers to monitor
businesses in real-time. A BI solution provides real-time reports directly
to manager’s on-demand from any location.
6) This helps to reduce the scope of error by providing managers with
accurate data to make better decisions on what is happening now and to
forecast for the future.
7) BI solutions also focus on providing data security by using existing
established security infrastructures to keep data private.

Q – 4 What is Business Intelligence. Explain Features of BI.

Ans

Howard Dresner, of the Gartner Group, in 1989 coined the team BI. He defined
BI as “a set of concepts and methodologies to improve decision making in
business through use of facts and fact-based systems”

The goal of BI is improved decision making. Yes, decisions were made earlier
too (without BI). The use of BI should lead to improved decision making.

BI is more than just technologies. It is a group of concepts and methodologies.

It is fact-based. Decisions are no longer made on gut feeling or purely on

hunch. They have to be backed by facts.

BI uses a set of processes, technologies, and tools (such as Informatics/IBM

Datastage/ Ab initio for extracting the data, SAS/IBM SPSS for analyzing the
data, and IBM Cognos/Business Object for reporting the data) to transform raw
data into meaningful information.

BI mines the information to provide beneficial insights; the insights then lead
to impactful decision making which in turn provides business benefits such as
increased profitability, reduced costs, improved operations etc.

Raw Data -> Meaningful Information -> Knowledge Discovery -> Beneficial
Insights -> Impactful Decisions -> Business Benefits
ByAsst.Prof. Aaska Bhatt Page 66
Business Analytics READING MATERIAL MBA SEM - 2

The term Business Intelligence (BI) refers to technologies, applications and

practices for the collection, integration, analysis and presentation of BI.

“The combination of different types of systems and tools which are vital for
strategic planning process of an organization is known as Business
Intelligence”.

An organization can store, gather, access and analyze the various corporate
data for supporting the decision making process with the help of these
systems. Various types of business intelligence in the field of customer
support, market segmentation, statistical analysis, inventory and distribution
analysis, customer profiling are collected through BI systems.

For Example, an enterprise data warehouse in a bank will hold extracted

summarized data taken from several OLTP IT applications in subject areas of
loans, forex, corporate banking, personal banking, treasury, etc. Knowledge
workers analyse the data in the warehouse from multiple perspectives like
time(Day/Week/Month/Year), Bank location, Customer category to make
business decisions and stay ahead of competition.

Features of Business Intelligence (BI)

1) High Level Features

a) Comprehensive Database Support

Contemporary BI tools support diverse database platforms and can

pull data from numerous sources. With many database options
popping out at an increasing rate, wide-ranging support makes sure
that one is not restricted due to non-adaptability.

b) Real-Time Data
BI tools today deliver quick and timely real time data, ensuring that a
decision maker has the most current data. Having full knowledge of
real time data ensures that the best decisions can be taken for
organizational interest.
c) Application Importing
The best BI tools let one seamlessly import analytical tables,
embedded data and charts from other applications. The ability to

ByAsst.Prof. Aaska Bhatt Page 67

Business Analytics READING MATERIAL MBA SEM - 2

import important data helps in enhancing flexibility and is a great

time saver too.
d) Mobile Support
Dynamic and fast paced changes in the technological landscape mean
that business intelligence tools have to be accessible through a
variety of platforms and devices. They need to adapt to smart
phones, tablets, laptops and personal computers for ease of access.
e) Operational Reporting Capabilities
Operational reporting supports the routine daily activities of the
business. Business intelligence software provide a host of innovative
reporting options (ad-hoc, operational, what-if, mobile, dashboards,
etc) from one code base, which gives managers a complete business
picture.
2) Security Features
a) Multiple Authentication Sources
Modern BI software allows for flexible authentication options. This
helps managers take full advantage of the authentication methods
already being used and set different authentication methods for
different internal systems.
b) Application Level Security
This lets one control BI application access on a per-user role, or per-
user basis. It serves as an effective filter and offers different menu
choices to different users, based on their business requirement.
Hence, all employees may not have access to business applications
that they do not require, tightening internal security measures.
c) Row Level/Multi-Tenant Security
This basically allows one to monitor and control data access within a
single application at the row level. Hence, different users will have
varying levels of access to data and view different data pertinent to
their job.
d) Single Sign on
A one-time session authentication process is simple and user-
friendly. It ensures that users need to their name and password only
in one place, thus eliminating the need for repeat password entries
while switching applications in a single session. This feature greatly

ByAsst.Prof. Aaska Bhatt Page 68

Business Analytics READING MATERIAL MBA SEM - 2

improves efficiency and reduces “wrong/forgotten password”

support requests.
e) Application Activity Auditing
A good business intelligence solution enables operators to log end
user activity after each session. This makes sure that the IT
department can check when users log in, which applications they
access, and the time of each session.
3) Must Have Applications
a) Ad-hoc Report
These reports let business developers create and distribute reports
on the go. Important data elements can be chosen and exported to a
report format of choice. The report can also be mailed to other users
directly from the web, saving time and increasing convenience.
b) Ranking Report
This specialized report option is able to create variable ranking across
numerous diverse business dimensions, while mentioning various
selection criteria at run time. This wonder tool helps managers get a
bird’s eye view of the best and worst aspects of their business.
c) Executive Dashboards
These are able to display the key performance indicators (KPIs) that
are needed to effectively run an enterprise. They provide a real time,
customised view of important data through graphs, charts and tables.
This enhances good decision making and helps in organisational
effectiveness.
d) Pivot Table/OLAP
Pivot tables are a great tool as they extract the significance from a
large, detailed data set. Pivot table aid in analytical processing
through organising data, making comparisons, summarizing and
predicting trends. Interactive, easy to use and flexible – pivot tables
are a must have for a good BI software.
4) Advanced Features
a) Built-in ETL
Extract, Transform and Load tools help to pull data out of various
source systems, transform it to single format and place it into a data
warehouse. A unique adds on, this feature helps in blending data

ByAsst.Prof. Aaska Bhatt Page 69

Business Analytics READING MATERIAL MBA SEM - 2

from multiple sources into one report, thus enriching the content
quality.
b) Intelligent Alerts
This cutting edge technology allows BI software to automatically send
email or instant message alerts to a user when data reaches a
predefined threshold limit. For example, an alert may be sent every
time stock reaches a particular level or sales numbers reach a
particular figure. In a hyper competitive business arena, these alerts
ensure a proactive team, responding to slightest changes at the
earliest.
c) White Labelling
Managers are today looking for readymade, re-branded BI solutions
to complement their existing product or service. While labelling is the
customization of BI software to make the interface similar to the
current business software. This helps in offering domain specific
insights, consistency and promoting user recall and adoption.

Q – 5 What is Business Intelligence. Explain Uses of BI.

Ans

Howard Dresner, of the Gartner Group, in 1989 coined the team BI. He defined
BI as “a set of concepts and methodologies to improve decision making in
business through use of facts and fact-based systems”

The goal of BI is improved decision making. Yes, decisions were made earlier
too (without BI). The use of BI should lead to improved decision making.

BI is more than just technologies. It is a group of concepts and methodologies.

It is fact-based. Decisions are no longer made on gut feeling or purely on

hunch. They have to be backed by facts.

BI uses a set of processes, technologies, and tools (such as Informatics/IBM

Datastage/ Ab initio for extracting the data, SAS/IBM SPSS for analyzing the
data, and IBM Cognos/Business Object for reporting the data) to transform raw
data into meaningful information.

ByAsst.Prof. Aaska Bhatt Page 70

Business Analytics READING MATERIAL MBA SEM - 2

BI mines the information to provide beneficial insights; the insights then lead
to impactful decision making which in turn provides business benefits such as
increased profitability, reduced costs, improved operations etc.

Raw Data -> Meaningful Information -> Knowledge Discovery -> Beneficial
Insights -> Impactful Decisions -> Business Benefits

The term Business Intelligence (BI) refers to technologies, applications and

practices for the collection, integration, analysis and presentation of BI.

“The combination of different types of systems and tools which are vital for
strategic planning process of an organization is known as Business
Intelligence”.

An organization can store, gather, access and analyze the various corporate
data for supporting the decision making process with the help of these
systems. Various types of business intelligence in the field of customer
support, market segmentation, statistical analysis, inventory and distribution
analysis, customer profiling are collected through BI systems.

For Example, an enterprise data warehouse in a bank will hold extracted

summarized data taken from several OLTP IT applications in subject areas of
loans, forex, corporate banking, personal banking, treasury, etc. Knowledge
workers analyse the data in the warehouse from multiple perspectives like
time(Day/Week/Month/Year), Bank location, Customer category to make
business decisions and stay ahead of competition.

Use of Business Intelligence (BI)

1) Improved Operational Efficiencies

In today’s ultra-competitive marketplace financial institutions need to be
as lean and efficient as possible. Using BI solutions to analyse
operational processes, organizations can reduce ongoing costs and
maximise existing resources and expertise.
For example, by analyzing the performance of customer-facing
employees, such as sales personnel, tellers, and account managers,
organizations can discover ways to improve and enhance the customer
experience at the point-of-contact.

ByAsst.Prof. Aaska Bhatt Page 71

Business Analytics READING MATERIAL MBA SEM - 2

2) Improved Products and Services

BI solutions allow organizations to track individual revenue streams to
better determine which products and services are profitable and which
are not. Business Intelligence solutions also made financial organizations
to analyse vast amount of customer data to gain insights about customer
needs and sentiments regarding banking that can be used to improve
products and services.
3) Improved Marketing
Using BI, marketers can analyse CRM data based on a range of criteria to
uncover the most profitable customer profile. In addition, the customer
base can be analyzed to identify and develop new cross-sell and up-sell
opportunities, and to carry out more targeted online marketing
campaigns.
4) Improved Customer Retention
BI applications can help financial institutions identify and pursue those
customers that are the most profitable. BI also plays an important role in
improving customer retention and loyalty. Using business analytical
tools and techniques, organizations can discover the reasons why
customers switch to a competing institution.
5) Developing New Investment Strategies
Asset managers are utilizing new data sets to develop new strategies for
investing. By developing models around social media, investors can gain
specific insight on sentiment and develop trading signals. Other research
analysts are using satellite imagery to understand global supply of
develop trading signals.
6) Risk Reduction
The financial world is constantly changing and filled with uncertainty.
More than ever, banking and finance institutions need to use every tool
at their disposal to reduce risk. Fortunately, today’s Business Intelligence
solutions provide actionable information that organization can use to
mitigate risk in a number of areas.

ByAsst.Prof. Aaska Bhatt Page 72

Business Analytics READING MATERIAL MBA SEM - 2

Q – 6 Explain BI Component Framework.

Ans

The Data Warehousing Institute (TDWI) provides one of the best definitions for
BI and data warehousing, as well as the relationship between them, in its BI
component framework. Three layers in this framework

1) Consumer Layer/Business Layer

2) Administration and Operations Layer, and
3) Implementation Layer

1. Business Layer

1) Business Requirement

These are for information about the business and requirements for analytics
capabilities are, of course, the very reasons for a BI initiative. Companies have
hundreds, if not thousands, of reporting requirements. Some requirements are
no more than to replace existing operational reports without adding new data
or functionality. It is not unusual to see companies that have many more
operational reporting requirements, which typically provide the lowest return
on investment, than strategic analytical requirements, which could greatly
impact the company’s bottom line. The EDW/BI teams often struggle with the
prioritisation of all requirements which loads to the second component.

2) Business Value

These are the benefits anticipated from, or achieved by, BI including such
things as increased revenue, improved profit margins; risks mitigated or
avoided, reduced costs, and so on. It is important that business people
negotiate the priorities for EDW/BI projects among themselves.

3) Program Management

It is the ongoing activity of managing the interdependent components of the BI

initiatives or BI program for maximum business value. Interdependencies exist
among resources, skill sets, code modules, databases, and so on. Part of
program management is establishing infrastructure, cross-functional

ByAsst.Prof. Aaska Bhatt Page 73

Business Analytics READING MATERIAL MBA SEM - 2

disciplines, enterprise architecture and standards, synchronising multiple and

parallel projects, realigning the requirement with changing business needs, etc.

4) Development

It refers to the project activities that create and deploy EDW/BI databases
and applications. Part of managing development includes the use of a
common methodology, decomposing service requests into multiple
releases, funding the projects, staffing them appropriately, identifying
project success measures, etc. Some people are surprised to see
development in the business layer because they are so used to IT
traditionally having this responsibility.

2. Administration Layer

1) BI Architecture

It includes frameworks, models, standards, policies, procedures, guidelines,

and conventions that describe the EDW/BI components and the relationships
among them. These are different types of architectures, such as business
architectures, data architectures, technology architectures, organizational
architectures and project architectures.

2) Business Applications

These are the way BI is utilised in the company. They are business processes
that access or receive data from the EDW/BI environment through reports, ad-
hoc queries, analytics applications, business scorecards, dashboards, and so
on. Business managers use that information for better managing their
department, and business executives act on that information to change the
direction of the company.

3) Data Resource Administration

It is also known as data administration or Enterprises Information

Management (EIM). They create and manage policies, procedures for data
governance. The responsibilities of EIM include data profiling, data modelling,
metadata management collaborating with data owners and data stewards,
helping business people to resolve their data disputes, and other custodial

ByAsst.Prof. Aaska Bhatt Page 74

Business Analytics READING MATERIAL MBA SEM - 2

responsibilities, such as helping developers with data mapping and validating

data transformation and cleansing test result.

5) BI and DW Operations

These refer to executing all extract, sort, merge, transform and load processes,
as well as running and monitoring BI applications and reports. Efficient
operations ensure that acceptable quality, availability, security, and
performance of the EDW/BI environment are maintained.

3. Implementation Layer

1) Data Warehousing

It is a collection of program code, processes and procedures that extract and

integrate data and then store the data.

2) Information Services

These are the applications, processes and procedures that turn data into
information, and deliver that information to the business people in two ways:

a) The state of the practise, and the original way of delivering information,
includes managed query and reporting services and using an OLAP tool.
b) The state of the art and more recent way of delivering information
includes business analytics applications such as dashboards and
scorecards.

Q – 7 List Advantages of Business Intelligence.

Ans

1) Employee Authorisation
2) Link Various Employees for Competent and successful processing of data
3) Easy Teamwork and allocation
4) Communicating Business Intelligence to whole organization
5) Evaluate and Improve Inputs
6) Improved Association
7) Reduced Training Requirements
8) Transport Refined Investigation and Reporting

ByAsst.Prof. Aaska Bhatt Page 75

Business Analytics READING MATERIAL MBA SEM - 2

Q – 8 List Disadvantages of Business Intelligence.

Ans

1) Lot of Historical Data

2) Cost
3) Difficulty
4) Disordering of commercial Set-ups
5) Limited Applications
6) Implementations is a Time Consuming Event

ByAsst.Prof. Aaska Bhatt Page 76

Business Analytics READING MATERIAL MBA SEM - 2

MODULE – 4

Q – 1 Explain Analytics in Business Support Functions?

Ans

Introduction

Analytics can be defined as the computational field of examining raw data with
the purpose of finding new insights, drawing conclusions, and communicating
inferences to support business decisions and actions.

Analytics relies on the simultaneous application of statistics, operational

Research, Programming and mathematical modelling techniques to quantify
observations. To build analytical applications for businesses, one needs to have
different competences.

Analytics in Business Support Functions

Human Capital Analytics

IT Analytics

Sales and Marketing Analytics

Human Capital Analytics

Human Capital Analytics about understands the power of Human Capital to

transform businesses by applying simple logic, and not just a number.

Human Capital analytics deliver critical insights about a company’s people,

their preferences, what makes them more effective and their contribution
toward the success of the business. This data can be used to determine what
makes employees happy, more productive and willing to go the extra miles.

It can be used for proactive HR decisions; map out strategies for recruitment,
retention, competency, mapping, rewards design, and team compositions. It
can also be used to create personalized employee experiences – such as
determining what continuous education is needed – which can help HR teams
focus on returns on investments rather than just costs.

ByAsst.Prof. Aaska Bhatt Page 77

Business Analytics READING MATERIAL MBA SEM - 2

Benefits from the deployment of analytics:

1) Workforce planning analytics to acquire talent at the right time for right
positions. Human Capital analytics will lead to identification of positions
that drive business results and critical competencies needed for those
positions.
2) Workforce Talent Development Analytics aligned to business goals.
3) Workforce Utilisation Analytics for enhancing employee engagement.
4) Workforce Compensation Analytics to ensure optimise benefits using
big data sources including performance and benchmarks.
5) Compliance Analytics helps to detect any anomalies relating to
enterprise compliance policies and initiate proactive corrective actions.

IT Analytics

Information Technology (IT) analytics covers usage and performance data

which helps for monitoring required for developing or deploying technology
for institutional use, developing data standards, tool, processes, organizational
synergies and policies. Information technology analytics largely aims at
integrating data from a variety of systems – student information, learning
management, and alumni systems, as well as systems managing learning
experience outside the classroom.

All enterprise use IT as business enabler Enterprise invest in a variety of IT

resources like data networks, servers, data centre/cloud services, software
licenses, maintenance of software, end user support and many productivity
tools, IT operations of enterprises are becoming complex due to multiple
technology platforms, outsourcing patterns, complex demands of users and
geographic spread of operations. Investing in right IT resources for business
results is certainty a strategic decision.

In IT analytics, the following analytics play important role:

1) IT Infrastructure Analytics provide the insight into the health of IT

infrastructure. Services desks can prevent major outages by using
predictive analytics.

ByAsst.Prof. Aaska Bhatt Page 78

Business Analytics READING MATERIAL MBA SEM - 2

2) Data Network and Storage Utilization Analytics will lead to optimization

of servers and bandwidth.
3) Security Analytics can provide vital clues about potential information
security threats and alert teams.
4) Service Quality Analytics will provide insights into root causes of SLA
deviations and trigger process improvement initiatives.
5) IT Assets Analytics supports optimal investment forecasts.
6) IT Policy Compliance Analytics can report policy enforcement deviations
and trigger corrective actions.

Sales and Marketing Analytics

Sales and marketing analytics are essential to unlocking commercially relevant

insights, increasing revenue and profitability, and improving brand perception.

Sales and marketing analytics considers all marketing efforts across all
channels over a span of time – which is essential for sound decision making
and effective, efficient program execution.

Sales and marketing analytics provides real-time, fact-based insight into the
entire sales process.

Applications of analytics in sales and marketing function of an enterprise:

1) Analytics on Consumer Behaviour

Analysing consumer behaviour would help us understand when, why,
how, and where people do or do not buy a product. By understanding
this, we can bring in changes to product and marketing strategy helping
us attract more consumers.
2) Marketing Mix Analytics
Analysing returns on marketing expenditure across various channels
would help us evaluate the effectiveness of each of the marketing
activities. These insights will help us to reallocate resources from a less
effective to a more effective channel.
3) Sales and Force Analytics
Analysing sales process and team will help us diagnose the barriers to
sales force performance. It will enable us bring more efficiency in sales
ByAsst.Prof. Aaska Bhatt Page 79
Business Analytics READING MATERIAL MBA SEM - 2

force by providing us insights on issues like optimum sales territory size,

optimum product bag size, the quality of leads and monthly target
forecasts.
4) Sales Pipeline Analytics
Analysing the flow of sale through several stages would help us find any
loopholes to the sales cycle. It will help us evaluate an optimal time
period for each stage to occur so that you can make sure your customers
experience a quick and efficient transaction. It also helps determine the
capacity of your sales process.
5) Analytics on Communication Content
Analysing consumer behaviour on the communication content helps us
observe how consumers react to our marketing material. This gives us
insights on how to draw consumer’s attention towards our products and
will enable us convey message clearly?
6) Web Analytics
Web analytics helps us understand user behaviour on the web and
consequently generate more leads and sales. It will provide insights to
enhance the look and layout of your website and make it more user-
friendly. With these insights we can also asses and strategies the
effectiveness of marketing campaigns in order to get more valuable
customers.

Q – 2 Explain Telecom Analytics in Industry.

Ans

A telecommunications industry within the sector of information and

communication technology is made up of all Telecommunications/Telephone
companies and internet service providers and plays the crucial role in the
evolution of mobile communications and the information society. The telecom
sector continues to be at the epicentre for growth, innovation, and disruption
for virtually in any industry. Mobile devices and related broadband
connectivity continue to be more embedded in the fabric of society today and
they are Key in driving the momentum around some keys trends such as video
streaming, Internet of Things (IoT), and mobile payments.

ByAsst.Prof. Aaska Bhatt Page 80

Business Analytics READING MATERIAL MBA SEM - 2

Telecom companies that want to be innovative and maximize their revenue

potential must have the right solution in place so that they can harness the
volume, variety and velocity of data coming into their organization and
leverage on actionable insights form the data. Telecom companies are sitting
on terabytes of data that are stored in silos and scattered across the
organization. For simpler and faster processing of only relevant data, telecoms
need an advanced analytics driven data solution that will help them to achieve
timely and accurate insights using data mining and predictive analytics.

The usefulness of analytics in telecom businesses can be understood by the

following applications:

1) Analytics solutions usually extend beyond the capabilities of regular BI

solutions for reporting and dash boarding to include capabilities ranging
from ad-hoc querying and multi-dimensional analyses to predictive and
descriptive modelling, data mining, text analytics, forecasting and
optimization.
2) The adoption of analytics in telecommunications is intended to improve
visibility into core operations, internal processes and market conditions,
discern trends and establish forecasts.
3) Future analytics will also include data from systems beyond traditional
billing and meditation resources. These will include deep packet
inspection, home subscriber server, video optimization equipment and
on-device clients, among others.
4) Accurate data about real customer activity would help to drive changes
to its portal, giving users easy to the applications they use most often.
5) Analysis of service usage would also enable the company to spot
upcoming trends and intelligently market them to customers, and keep
its customer touch points current.
6) Being better informed about customer usage would enable the
enterprise to ensure it supported all of the latest mobile phone
technologies seen on its network and be alerted to potential
incompatibilities.

ByAsst.Prof. Aaska Bhatt Page 81

Business Analytics READING MATERIAL MBA SEM - 2

Although analytics can be instrumental in the telecom industry in many

ways, some of the major applications include:

1) Customer Retention/Improving Customer Loyalty: With neck to neck

competitive between the numerous players in this industry, customer
retention is of top notch importance. Telecom is now much more than
marketing calls and analytical tools can help firms to identify cross
selling opportunities and take crucial decisions to retain the customers.
Analytics can also help in identifying trends in customer behaviour to
predict customer churn and apprise the decision makers to take suitable
action to prevent the same. When dealing with a large customer base,
marketing across the board would be expensive and ineffective. Hence,
analytics can help in better channelizing marketing efforts, such as
identify target group region to launch pilot projects, so that the firm has
better return on its marketing investment.
2) Network Optimization: It is very crucial for telecom operators to ensure
that all its customers are able to avail its products of all the times. At the
same time, firms need to be frugal when it comes to allocating resources
to network, because any unused capacity is a waste of resource.
Analytics help in better monitoring traffic and in facilitating capacity
planning decisions. Analytical tools leverage data collected through day
to day transactions and help in both short term optimization decisions
and long term strategic decision making.
3) Predictive Analytics: With the use of predictive analytics in all their
business departments – telecom operators with great strategic
advantage. Predictive analytics helps in targeting the right customer at
the right time based on their past behaviour and choices. It also helps in
boosting revenue by proper planning and reducing the operational costs
in the long term.
4) Social Analytics: The branding of telecom operators on social media
plays a crucial part in customer gain and retention. Data generated
through social media can be interpreted into meaningful insights using
social analytical tools. The customer sentiment analysis, customer
experience and positioning of the company can be analyzed to make the
customer experience richer and smoother. Also data generated through
such platform are more diverse both geographically and
ByAsst.Prof. Aaska Bhatt Page 82
Business Analytics READING MATERIAL MBA SEM - 2

demographically and hence helps in gaining a closer to reality customer

information.

Q – 3 Explain Retail Analytics in Industries.

Ans

Online retailing is often referred to web retaining, electronic retailing or e-

tailing. In this retail classification, the retailer and customers communicate
with each other in a typically non-personal way via some type of electronic,
interactive system, generally a computer facilitated by the internet.

Online retailing has many dimensions such as Business-to-Business (B2B),

Business-to-Customer (B2C), Customer-o-Customer (C2C), along with concepts
like e-payments, e-procurements, e-supply to name a few. Out of all these
concepts related to digitalisation of economy, e-retailing has the most visible
and direct impact on society through its customers.

1) Optimizing Marketing Mix: One of the major needs for the success of an
online retailer is to attract consumers to the site and further engage
them with the right set of products and offerings which would lead to a
purchase. Marketing process for an online retailer would be different
from a traditional business, since equal emphasis should be given to
digital space along with offline media. Using predictive analytics, one can
determine the significant factors which drive more consumer
acquisitions or sales. Depending on the model outcomes, one can always
efficiently use the marketing budgets and allocate them across different
media vehicles to maximize the returns.
2) Customised Product Recommendations: Another useful dimension
which would benefit online retailers is providing customised product
recommendations and promotions. Using analytics makes this challenge
easier by better understanding consumer’s purchase behaviours, past
purchase history and performance of different products on the site.
With the help of such data, retailers can deploy advanced machine-
learning algorithms and recommend customised products which would
potentially increase the product sales. This kind of capability also
improves overall consumer experience and would potentially increase
the product sales. This kind of capability also improves overall consumer
ByAsst.Prof. Aaska Bhatt Page 83
Business Analytics READING MATERIAL MBA SEM - 2

experience and would convert that into more visits and more purchases.
For Example, Amazon.com has seen tremendous success by adoption
this strategy and has successfully managed to become a leader in the e-
commerce space.
3) Efficient Overall Supply Chain: This dimension is one of the most
important and sometimes would become a key differentiator for being
successful in the competitive e-commerce landscape. It is essential for
any online retailer to develop a good understanding about consumer
demand. Using analytics, one can efficiently manage overall supply chain
process which includes forecasting, purchasing, planning, assortment,
storing and delivery. Large retailers such as Wal-Mart thoroughly
depend on analytics for their day-to-day decision-making in supply chain
management. Using the insights generated, one can make better use of
the inventory space and avoid out-of-stock items.
4) Predictive Search: A consumer’s interaction with a retailer’s site often
starts with site search. If that search can be made intelligently to predict
what the consumer is looking for, it will spur sales. Predictive search
helps to determine that by analysing past click-through behaviour,
preferences, and history in real-time. With the application of data
analytics, the retailer can capture the consumer’s intent, based on past
click-through behaviour, and analyses the site content to show relevant
product matches for the search term.
5) Recommendations and Promotions: Despite the availability of several
recommendation and event-driven promotion engines, it is still a
challenge easier by using machine learning to understand a consumer’s
behaviour, including the purchase history of that consumer and the
performance of different products on the site, to determine relevant
recommendations that have a higher probability of generating a sale.
Predictive analytics does the same thing with promotions to identify
those that have worked in the past, and then offer the best promotions
in real-time based on the consumer’s browsing pattern.
6) Fraud Management: Fraud management and chargeback’s are a retailer
nightmare. Predictive analytics can lower credit card chargeback rates
and reduce overall fraud by analysing customer behaviour and product
sales and removing products from the assortment that are more

ByAsst.Prof. Aaska Bhatt Page 84

Business Analytics READING MATERIAL MBA SEM - 2

susceptible to fraud. The fraud management predictive models identify

potential fraud before the customer completes the purchase
transaction, resulting in reduced charge backs and also reduced labour
and fees required to process the charge backs. Predictive analytic
solutions come with pre-built fraud models for a specific industry, such
as retail, making it easy to deploy the solution.
7) Business Intelligence: A better understanding of consumers leads to
serving them better by offering the products they want at the price they
want and with effective post-sales service. Predictive analysis make this
possible by capturing customer information, reviewing trends, and
developing models that identify what a customer might like. At times,
consumers may not be able to vocalise what they like. But predictive
analytics can still recommend the right products. Intelligence gained
through predictive analytics helps to build a culture of better decision-
making, where any questions that is raised can be modelled using the
right data inputs.

Role of Data Analytics in Retail Industry

1) Discount Efficiency: Almost 95% of shoppers have admitted that they

use a coupon code when they do shopping. For retailers to gain from
offers, they need to first ask themselves how valuable such deal would
be their business. Such promotional deals definitely will get customers
rush in but might not be an effective strategy to sustain a long-term
customer loyalty. Rather, retailers can run analysis on historical data and
utilize it in predictive modelling for determining the impact such offers
would have on a long-term basis. For example, a team of data analyst
and scientist can make a history of events that might have occurred if
there was no discount. They then make a comparison of this with the
real events when there were discounts to have a better understanding
of the effectiveness of each discount. After getting this knowledge, the
retailer will now readjust his discount strategy by increasing the number
of discounts on various categories and removing less profitable deals.
This would certainly boost the average monthly revenue.
2) Churn Rate Reduction: The creation of customer loyalty is the main
priority among all brands because the cost of attracting a new customer

ByAsst.Prof. Aaska Bhatt Page 85

Business Analytics READING MATERIAL MBA SEM - 2

is more than six times expensive than retaining the existing ones. It is
possible to represent churn rate in various like percent of customers
lost, the number of customers lost, percent of recurring value lost and
value of recurring business lost. With the help of big data analytics,
insights got like things customers are likely to churn, retailers can find it
easy in determining the best way to alter their overall subscriptions to
prevent such scenarios. For Example, a retailer takes an analysis of
customer data after a monthly subscription box and can use it to get
new subscribers who might likely end up as long term customers. This
would result to the retailer decreasing the monthly churn significantly
and would make brands be able to calculate lifetime value and make
money back on marketing costs that are steep.
3) Product Sell-through Rate: Products that are data related can be
analysed by retailers to find what pricing, visuals, and terminology will
resonance with the potential and existing customers. An alteration of
the product showcase depending on the data sets that are analysed,
retailers will obtain improved sales rate. For Example, Uber’s whole
business model depends on big analytics for sourcing of crowd and sell
through of products. With customer’s personal data, Uber is able to
match them with the most suitable drivers depending on the location
and rating of their customers. Customers therefore because of such
personalised experience, would prefer to take advantage of Uber’s
personalised offers against offers by competitors of Uber or even regular
taxis.

Q – 4 Explain Healthcare Analytics in Industries.

Ans

The healthcare industry is being transformed continually by the biological and

medical sciences, which hold considerable potential to drive change and
improve health outcomes. However, healthcare in industrialised economics is
now poised on the edge of an analytics-driven transformation. The field of
analytics involves “the extensive use of the data, statistical and quantitative
analysis, explanatory and predictive models, and fact-based management to
drive decisions and options.”

ByAsst.Prof. Aaska Bhatt Page 86

Business Analytics READING MATERIAL MBA SEM - 2

Healthcare analytics is the analysis of healthcare activities and data collected

from the different area of healthcare. Analytics help healthcare organizations
to coordinate better and improve patient wellness. The main benefit of using
healthcare analytics is to help you in decision making, which will increase
patient experience and outcomes in a cost-effective manner.

According to IBM, analytics in healthcare can play a key role in reducing high-
risk healthcare problems and other in evidence based personalised medicine.
Some of the key areas addressed by healthcare analytics are:

1) Bringing personalization and engagement into healthcare via patient

certainly.
2) Analytics as an enabler for evidence-based medicine and decease
prevention.
3) Building a proactive, sustainable healthcare system in accountability and
transparency.
4) Providing supply forecasting, dynamic budgeting and reducing overall
cost.
5) Promoting data-centricity and data literacy.

A number of applications of analysis in health care have been identified, they

are:

1) Comparative Effectiveness: Borrowing from the field of Comparative

Effectiveness (CE) research, analytics can be applied in healthcare to
compare the cost and effectiveness of interventions, treatments, public
health policies or medical devices. Organizations could use cost and
outcome data to examine the performance of replacement hp

ByAsst.Prof. Aaska Bhatt Page 87