K.

Koteswari
P. Preetha
 Evolution of Data Analytics
 Data Analytics Overview
 Types of Data Analytics -Descriptive Analytics -Diagnostic Analytics -
Predictive Analytics -Prescriptive Analytics
 Importance and Benefits of Data Analytics.
 Different Applications of Analytics in Business
 Text Analytics and Web Analytics
 Skills for Business Analytics.
Data: Data is a set of values of qualitative or quantitative variables. It is information
in raw or unorganized form. It may be a fact, figure, characters, symbols etc. Data can
be numbers, like the record of daily weather, or daily sales. Data can be alphanumeric,
such as the names of employees and customers.
Information- Meaningful or organized data is information, comes from analyzing
data.
Data base: A database is a modeled collection of data that is accessible in many
ways. A data model can be designed to integrate the operational data of the
organization. The data model abstracts the key entities involved in an action and their
relationships. Most databases today follow the relational data model and its variants.
Data Warehouse:
 A data warehouse is an organized store of data from all over the
organization, specially designed to help make management decisions. Data
can be extracted from operational database to answer a particular set of
queries. This data, combined with other data, can be rolled up to a
consistent granularity and uploaded to a separate data store called the data
warehouse. Therefore, the data warehouse is a simpler version of the
operational data base, with the purpose of addressing reporting and
decision-making needs only.
Data Mining :
 Data Mining is the art and science of discovering useful innovative patterns
from data. There is a wide variety of patterns that can be found in the data.
Why Data Analytics?
 Organizations today handle and store billions of rows of data, possibly with
millions of combinations. Data Analytics has been hailed as the ‘Game
Changer’, because businesses could transform the raw data into something
actionable, which improved their profits. One of the first applications of
analytics were found in the field of marketing, sales and customer
relationship management.
 Once the firms had analyzed the data, they found plethora of information
ranging from insights into the customer’s needs to consumer behavior to
understanding the demand for products/ services.
Evolution of Analytics:
1. Analytics era 1.0:
 The first era is also known as the era of ‘Business Intelligence’. Analytics
1.0 was a time of real progress in gaining an objective, deep
understanding of important business phenomena and giving managers the
fact-based comprehension to go beyond intuition when making decisions.
 For the first time, data about production processes, sales, customer
interactions, and more were recorded, aggregated, and analyzed. Data
sets were small enough in volume and static enough in velocity to be
segregated in warehouses for analysis.
 However, readying a data set for inclusion in a warehouse was difficult.
Analysts spent much of their time preparing data for analysis.
 Analytics era 2.0 : Also known as the era of ‘Big Data’. The analytics 1.0 era
lasted until the mid- 2000’s and as analytics entered the 2.0 phase, the need for
powerful new tools and the opportunity to profit by providing them quickly
became apparent. Companies rushed to build new capabilities and acquire new
customers.
 Innovative technologies of many kinds had to be created, acquired, and
mastered in this era.
 Big data could not fit or be analyzed fast enough on a single server, so it was
processed with Hadoop, an open source software framework for fast batch data
processing across parallel servers.
 To deal with relatively unstructured data, companies turned to a new class of
databases known as NoSQL.
 Much information was stored and analyzed in public or private cloud-
computing environments.
 Machine-learning methods were used to rapidly generate models from
the fast-moving data.
 The competencies/ skills thus required for Analytics 2.0 were quite
different from those needed for 1.0.
 The next-generation quantitative analysts were called data scientists, and
they possessed both computational and analytical skills.
Analytics era 3.0:
 Like the first two eras of analytics, this one brings new challenges and
opportunities, both for the companies that want to compete on analytics
and for the vendors that supply the data and tools with which to do so.
 High-performing companies will embed analytics directly into decision
and operational processes, and take advantage of machine-learning and
other technologies to generate insights in the millions per second rather
than an “insight a week or month.”
 The pictorial representation of the evolution of Data
Analytics:
 The pictorial representation of the evolution of Data Analytics shows
that the concept of Data Analytics started in the early 1980s.
 In 1980’s the Data Analytics is used in such a way that only reporting is
used to happen.
 That means what is happening with the data being obtained.
 After this type of Data Analytic modeling, the Data Analytic is being
moved into the second phase that is with early 1990’s more of Analysis
(Analytics) came into existence.
 In this period, it focuses on “why did it happen” to the data.
 Then in 2000 onwards, the Monitoring of data happens. The dashboards
and the scoreboards are being used for the same.
 With this type of analysis, a clear idea of what’s happening to the data is
being understood.
 Then after 2010 onwards, the Prediction with the data and the data
inputs being implemented with.
 That means, what will happen with the data is the main question being
asked in the period after 2010.
 The different methods of statistics, data mining and the optimization is
being used in this period.
 Now we are in the era with the more detailed data analytics and that is
of nature Prescriptive.
 In this period we are training our machines to be smarter and
focusing on the computations to happen with less time and less
efforts.
 So we can conclude that we are in the period with more of AI.
What is Analytics?
 Analytics is the use of tools and processes to combine and examine sets of
data to identify patterns, relationships and trends.
 The goal of analytics is to answer specific questions, discover new insights,
and help organizations make better, data-driven decisions.

Data analytics: Data analytics is the knowledge of investigating raw data

with the intention of deriving solution for a specified problem analysis.
 Nowadays analytics has been used by many corporate, industries and
institutions for making exact decision at various levels.
 The mechanism of drawing solutions during analysis of large datasets with
the intention of determining hidden patterns and its relationship.
 Analytics differs from mining with the mechanism of determining the new
patterns, scope, techniques and its purpose.
 Data Analytics is the process of exploring and analyzing large
datasets to find hidden patterns, unseen trends, discover
Correlations and valuable insights.
 Data is collected and organized, then analysis is performed, and
insights are generated as follows:
 Data = a collection of facts.
Analytics = organizing and examining data.
Insights = discovering patterns in data.
Data insights that:
 Optimize processes to improve performance.

 Uncover new markets, products or services to add new sources of revenue.

 Better balance risk vs. reward to reduce loss.

 Deepen the understanding of customers to increase loyalty and lifetime value.

Campaign Optimization Example

 A marketing team can collect data of different email campaigns and use data
analytics to gain insights on which one resonates best with their customers.
The marketing dashboard below provides an in-depth view of the conversion
funnel for email campaigns.
 The data insight in this case is that the “Bend the Trend” campaign has the
highest enrollment rate, which is the primary key performance indicator for
this team.
 Competitive advantage.
 Removes inefficiency in the system/organization.
 Provides ability to make better decisions.
Ex: Problems faced by Flip kart
 Forecast demand for each SKU.

 SKU forecasting predicts the demand for specific products in a

company's inventory. The process analyzes data, such as past sales and
consumer trends, to help businesses predict future product demand and
keep optimum amounts of stock on hand without overpaying for storage
space.
 Predict customer cancellations and returns.

 Predict customer contacts at the customer service.

 Predict what a customer is likely to purchase in future?

 How to optimize the delivery system?

Understanding Customer Behavior :
 Understanding customer behavior has always been a challenge for organizations.
 Customer behavior analytics is the process of collecting, analyzing, and
interpreting data about customers' interactions with a company to understand
and predict their behavior.
 The information from this process is used to improve the entire customer
journey, increase sales, and optimize marketing efforts.
 Understanding customer behavior is crucial for businesses to make
informed decisions improve customer satisfaction, and increase revenue.
Understanding product usage:
 Product usage is the data that represents how and when your customers are
using your product. Product usage data is a crucial resource for any business, as
it can help you understand your consumer better. These insights can help you
make better business decisions and optimize your marketing campaigns.
Increases operational efficiency:
 Data analytics is a powerful tool for improving operational efficiency.
By identifying inefficiencies, improving forecasting, optimizing
resource allocation, and providing real-time monitoring, businesses
can improve their processes and reduce costs.
Business Model Innovation :
 By using artificial intelligence and data analytics tools, organizations
can predict customer needs, identify market trends, and create
innovative strategies for success.
 The major industries that are implementing advanced
analytical technologies include –
 Business analytics
 Retail
 Healthcare
 Media and Entertainment
 Banking
 Transportation
Business Intelligence (BI):
 Data analytics helps organizations make data-driven decisions by analyzing historical
and current data. It involves creating reports, dashboards, and visualizations to
monitor key performance indicators (KPIs) and gain insights into business
operations.
Retail:
 Retailers use data analytics to understand their customer needs and buying habits to
predict trends, recommend new products and boost their business.
Marketing Analytics:
 Marketers use data analytics to understand customer behavior, segment customers,
and optimize marketing campaigns. This includes analyzing website traffic, social
media engagement, email marketing performance, and more.
Financial Analytics:
 In finance, data analytics is used for risk assessment, fraud detection, portfolio
management, and algorithmic trading. It helps financial institutions make informed
decisions and manage their investments effectively.
Healthcare :
 Health care industries analyse patient data to provide lifesaving diagnoses and
treatment options. They also deal with healthcare plans, insurance information to
derive key insights.
 Data analytics can improve patient care by analyzing electronic health records
(EHRs), predicting disease outbreaks, identifying trends in patient outcomes, and
optimizing hospital operations.
Manufacturing:
 Using data analytics, manufacturing sectors can discover new cost saving and
revenue opportunities. They can solve complex supply chain issues, labour
constraints and equipment breakdowns.
Banking:
 Banking institutions gather and access large volumes of data to derive analytical
insights and make sound financial decisions. They find out probable loan defaulters,
customer churn out rate and detect frauds in transactions.
Transportation and Logistics :
 Logistics Companies use data analytics to develop new business models,
optimize routes, improve productivity and order processing Capabilities
as well as performance management. Data analytics plays a crucial role in
optimizing routes, managing transportation fleets, and reducing fuel
consumption in the transportation industry.
Manufacturing and Quality Control:
 Analytics is used to monitor manufacturing processes, identify defects,
and improve product quality. Predictive maintenance is also common in
this industry.
 Education: Educational institutions use analytics to track student
performance, personalize learning experiences, and improve educational
outcomes.
1. understand the problem
 understand the business problem. Define the organizational goals and
plan for a lucrative solution.
2. Data collection:
 Gather the right data from various sources and other information
based on your priorities.
 Data analytics begins with the collection of data from various sources,
including databases, websites, sensors, and more. Data can be
structured (e.g., databases, spreadsheets) or unstructured (e.g., text,
images, social media posts).
3. Data Cleaning:
 Clean the data to remove unwanted, redundant and missing values and
make it ready for analysis.
4. Data exploration and analysis:
 use data visualization and business intelligence tools, data mining
techniques and predictive modeling to analyses data.
5. Interpret the Results:
Interpret the results to find out hidden patterns, future trends, and gain
insights.
 Data analytics life cycle defines the roadmap of how the data is generated,
collected, processed, used, and analyzed to achieve business goals.
 It offers a systematic way to manage data for converting it into
information that can be used to fulfill organization and project goals.
 The process provides the direction and methods to extract information
from the data and proceed in the right direction to accomplish business
goals.
 The data Analytics life cycle guides them throughout this process.
Data Analytics Lifecycle :
The Data analytic lifecycle is designed for Big Data problems and data science
projects.
Phase 1: Discovery –
 The data science team learn and investigate the problem.
 Develop context and understanding.
 Come to know about data sources needed and available for the project.
 The team formulates initial hypothesis that can be later tested with data.
Phase 2: Data Preparation –
 Steps to explore, preprocess, and condition data prior to modeling and analysis.
 It requires the presence of an analytic sandbox, the team execute, load, and
transform, to get data into the sandbox.
 Data preparation tasks are likely to be performed multiple times and not in
predefined order.
 Several tools commonly used for this phase are – Hadoop, Alpine Miner, Open
Refine, etc.
Phase 3: Model Planning –Team explores data to learn about relationships between
variables and subsequently, selects key variables and the most suitable models.
 In this phase, data science team develop data sets for training, testing, and
production purposes.
 Team builds and executes models based on the work done in the model planning
phase.
 Several tools commonly used for this phase are – Matlab, STASTICA.

Phase 4: Model Building –Team develops datasets for testing, training, and
production purposes.
 Team also considers whether its existing tools will suffice for running the models or
if they need more robust environment for executing models.
 Free or open-source tools – Rand PL/R, Octave, WEKA.

 Commercial tools – Matlab , STASTICA.

Phase 5: Communication Results –
 After executing model team need to compare outcomes of modeling to criteria
established for success and failure.
 Team considers how best to articulate findings and outcomes to various team members
and stakeholders, taking into account warning, assumptions.
 Team should identify key findings, quantify business value, and develop narrative to
summarize and convey findings to stakeholders.
Phase 6: Operationalize –
 The team communicates benefits of project more broadly and sets up pilot project to
deploy work in controlled way before broadening the work to full enterprise of users.
 This approach enables team to learn about performance and related constraints of the
model in production environment on small scale , and make adjustments before full
deployment.
 The team delivers final reports, briefings, codes.

 Free or open source tools – Octave, WEKA, SQL, MADlib.

Analytics can be classified into four levels which help the organizations to
become mature in terms of analytical proficiency.
1. Descriptive Analytics “what happened”
2. Diagnostic Analytics “Why did this happen”
3. Predictive Analytics “what might happen in the future”
4. Prescriptive Analytics “what should we do next”
 Descriptive Analytics : This is the simplest form of analytics, It summarizes
an organization's existing data to understand what has happened in the past or is
happening currently. It emphasizes "what is going on in the business”.
 Descriptive analytics determines historical data to understand the relationship
between past events and the present conditions of the organization.
 It is one of the most widely used analytical tools favored by marketing, finance,
sales, and operations teams, as it efficiently looks into past data and provides an
analysis of the changes by comparing patterns and trends.
 Descriptive analytics answers the question, “What happened? In the past”.
 It summarizes current business status in the way of narrative and
innovative visualization.
 Data visualization is a natural fit for communicating descriptive analysis
because charts, graphs, and maps can show trends in data—as well as
dips and spikes—in a clear, easily understandable way.
 It highlights past trends that lead to valuable insights for business, but
we do not emphasize here "why these trends happened".
 We use Descriptive Analytics when we want to summarize the story of
an organization's performance (mostly in the form of Dashboards).
 It provides us with a comprehensive view by joining different things
together to highlight hidden trends and insights.
 Information extracted from descriptive analytics helps leadership to take actions to make
things better, and now with the help of Big Data technologies, management sees the
real–time progress of various vital business metrics.
 Below are a few examples of knowledge extracted from descriptive
analytics :
 More cars come for servicing during monsoon due to water problems so garage should
think about hiring part–time mechanics during monsoon to cater to the temporary
demand.
 Men convert credit card transactions into EMI more than women; banks should target
men for EMI promotion as they are more likely to opt for the promotional campaign.
 Internet routers show lots of information packets drop during 4–6 PM due to high
congestion, support team to provide extra bandwidth during this time slot for seamless
customer experience.
 The health department observes a recurring hike in malaria disease in
a particular locality every year during the rainy season; they find water
bodies are open in that area which is causing mosquito breeding.
For example, in an online learning
course with a discussion board,
descriptive analytics could determine
how many students participated in the
discussion, or how many times a
particular student posted in the
discussion forum.
 Statistical Summary : It provides statistical descriptions for a given
business metric, e.g. Mean, Median, Standard Deviation, Percentile,
Interquartile range, etc.
 Z–Score : Z Score tells us how far (in terms of standard deviation) is
a particular value of x from its mean.
 Coefficient of Variance : It is a ratio where we divide standard
deviation with mean.
 Interquartile Range : It is an important measure to gauge the
variation in the dataset.
 Diagnostic analytics addresses the next logical question, “Why did this
happen?”
 Diagnostic analytics provides "Why did it happen in my business".
 It is a bit advanced where analysts examine data in order to find
reasons for business problems or opportunities.
 Ex: In a time series data of sales, diagnostic analytics would help you
understand why the sales have decreased or increased for a specific
year or so.
 Eg: Reduction in production because of drop in quality.
Below are a few examples :
 A company found that employees are not completing learning certifications,
analyst diagnosed that most of the employees are stuck at programming
assignments, where programming interface was not supportive/ flexible,
and there was no way to get hints/ help to proceed further.
 There was a low hotel check–in feedback score; analysts diagnosed that front
office executive enters customer details which are not required fields during
check–in itself. Typing speed and system navigation is also very slow which is
resulting in a longer check– in time.
 The product return rate was very high during last month, and it found that
out of total return items more than 60% of products were supplied by two
vendors only, where the vendor provided the wrong specification about
products.
 Correlation Analysis : It is a statistical measure that indicates the
strength of the relationship between two variables.
 5 Why Analysis : It is a very structured approach where we try to
dig into a problem and peel it layer by layer to reach the root cause of
the problem.
 Cause and Effect Analysis : Here, we identify all possible reasons
for one problem then we pick up all the reasons as a problem one by
one and try to find other causes for that problem.
 Predictive analytics is used to make predictions about future trends
or events and answers the question, “What might happen in the
future?”.
 Predictive analytics is the heart of business analytics, it aims to help
the organization by predicting probabilities of occurrence of a future
event or future values of any essential business metrics.
 Once organizations have a stable setup for descriptive analytics,
Predictive analytics combines this historical data with advanced
business protocols (policy and rules) to forecast future values of
business events.
 Predictive analytics allows organizations to become forward–
looking(forward–looking), providing an appetite to consume
calculated risk by anticipating customer behavior and business
outcomes.
 Ex: sales in the next month/ quarter, employee attrition, and product
return rate, etc.
Below are a few examples :
 Netflix predicts the next movie customers want to watch, more than
80% of customers select their next movie from their recommendation
list. In this way, Netflix earns more rental income from regular
customers by suggesting them the next film or programs.
 Airline companies predict competitive airfares to extraordinary and
ordinary days also they indicate how much airfare should be increased
as per the increased customer's traffic on their websites.
 IRCTC predict the probability to confirm the seat which provides
assurance to the customer about their seat confirmation, it helps to
attract more customers to their portal.
 Taxi services predict the demand during different time slots and
change their tariff accordingly.
 Regression Analysis : It establishes the mathematical relationship between input
variables and output variables, which means if we can calculate the future value of
output for any given input, e.g. sales forecast for next month.
 Logistic Regression : It is a classification predictive analytics technique that can
predict the output class for any given set of inputs. E.g. by providing customer
demographics logistic regression can indicate whether the customer will default
bank loan in the future or not.
 Decision Tree : Most of the time, we use a decision tree as a classification
technique; it tells us the output probability of the output variable for various
permutations of our input variables. Although it can be used for continuous output
variables also
 Clustering Techniques : These techniques segregate our customers into a few
logical segments so that we can create tailored offers for a different type of
customers as per their needs and interests.
 Random Forecast : It is another very famous business analytics technique that
uses a collaborative approach to solve the problem by generating a large number of
predictive models. Their accuracy is generally better
 Finally, prescriptive analytics answers the question, “What should we do
next?”
 Prescriptive analytics solves the complex business problem as it is the most
advanced form of analytics, where we have to choose the most optimal way
to increase important business metrics.
 perspective analytics can be applied once we have sound business knowledge
from descriptive and predictive analytics.
 Descriptive and predictive analytics suggest to us various ways to improve
business performance while prescriptive analytics tells us the pros and cons of
all alternatives and try to provide the optimal outputs by keeping minimum
risk in execution.
 Prescriptive analytics is not limited to predict "what will happen" and "when
will it happen" but it also tries to reveal "why it will happen" and "what would
be the impact on the business"
Below are Examples of Prescriptive Analytics :
 In 2019, there was a prediction of the cyclone on coastal areas of
Gujarat (by predicting changing airspeed, varying wind direction, and
mathematical relationship between low pressure in the ocean with
changes in cyclone intensity) therefore Government and disaster
management team had taken proactive actions in shifting citizens from
coastal areas to save places, and they stopped fishermen from going to
sea and arrange comfortable camps. While in a similar situation in
1999 we lost approx. 10,000 lives due to cyclone.
 Banks use prescriptive analytics to identify investment options for
their customers to maximize their returns and minimize risk. They
balance customer's portfolio by having an optimized ratio of equity,
debt, and other types of funds.
 At the time of launching a new service or a product into the market,
organizations have to keep various factors into the mind like the cost of
the product, features of the product, geographies in which they will
launch first, customer segments whom they want to attract, marketing
channels for product promotion, etc. By getting analytical results from
descriptive and predictive analytics, analysts apply prescriptive analytics
to decide the right mix of all these factors to make a product launch
successful.
 In agriculture crop yield depends on various factors like rainfall, soil
type, demand in the market, etc. Analysts apply prescriptive analytics and
suggest the best kind of crop in different regions as per the rainfall and
demand forecast in that season.
 Linear Programming : In linear programming, we optimize the
objective functions like revenue, market share, customer feedback ratings
by also keeping constraints in the model like budget, no. of people
deployed, etc. as linear functions.
 Analytical Hierarchy Process : We apply these techniques in scenarios
where we have to identify the best solution among various available options,
and there is the list of criteria's to select the solution, e.g. select best cloud
service providers among top 5 organizations by keeping multiple factors
into consideration like budget, customer service, flexibility to upgrade,
backup services, maintenance cost, etc.
 Combinational Optimization : It involves identifying optimal solutions
from a considerable number of finite solutions, e.g. the travelling salesman
problem, vehicle routing problem, etc.
WHO NEEDS DATA ANALYTICS?
 Any business professional who makes decisions needs foundational data
analytics knowledge.
Professionals who can benefit from data analytics skills include:
 Marketers, who utilize customer data, industry trends, and performance
data from past campaigns to plan marketing strategies.
 Product managers, who analyze market, industry, and user data to
improve their companies’ products.
 Finance professionals, who use historical performance data and industry
trends to forecast their companies’ financial trajectories.
 Human resources and diversity, equity, and inclusion
professionals, who gain insights into employees’ opinions, motivations,
and behaviors and pair it with industry trend data to make meaningful
changes within their organizations.
 Data is an unorganized and raw collection of facts that has massive
importance for a company.
 In the modern world, every company wants to collect and analyze data
to know their past mistakes.
 It might help them to build a better future.
 Sometimes these companies find it challenging to use analytics tools.
 The demand for data analysts and their related roles comes into the
picture.You might understand that industries require data analytics
skills.
 Data Analytics always helps companies to get an insight into how to develop the
business.
 There are several types of tools you will require to interpret the data.
 Companies use data analytics tools to understand customer behavior and
increase productivity.
 It might help them to store information about the latest trends in the market.
 The company uses tools related to business intelligence and data management
to identify the changing functions.
 The main three things will give good insight, immediate action, and
information system. A good insight will help you to understand the business
context.
 The information will help to access the organization’s storage and information
system.
 You will be able to take immediate action based on valuable information.
 The companies are trends to focus on experiments with analytical languages
and tools to develop new ideas.
Improved Decision Making :
 When big data joins forces with artificial intelligence, machine
learning, and data mining, companies are better equipped to make
accurate predictions.
 For example, predictive analytics can suggest what could happen in
response to changes to the business, and prescriptive analytics can
indicate how the company should react to these changes.
 Additionally, enterprises can use data analytics tools to determine the
success of changes and visualize the results, so decision-makers know
whether to roll the changes out across the business.
Increased Efficiency and Productivity :
 Data analytics enables organizations to increase efficiency and
productivity by automating and streamlining processes, maximizing
resource allocation, and minimizing manual labor.
 Additionally, data analytics assists businesses in identifying areas where
productivity can be increased, such as waste reduction, better
inventory control, and supply chain optimization.
More effective marketing :
 By using data analytics, companies can pinpoint precisely what
customers are looking for.
 Data enables businesses to do in-depth analyses of client trends, which
companies can then utilize to develop successful, focused, and targeted
marketing.
Enhanced Customer Experience :
 By giving organizations useful insights into customer behavior,
preferences, and needs, data analytics enables businesses to identify
areas where they can improve their customer experience–such as
lowering wait times, enhancing customer service, or streamlining user
interfaces.
Improved Risk Management :
 Data analytics can, for instance, assist companies in identifying potential
fraud, online threats, or operational risks. By utilizing data analytics to
enhance risk management, they can lessen the possibility of monetary
losses(loss of money), reputational damage, and other negative
outcomes.
Competitive Advantage :
 Analyzing data from various sources allows businesses to understand
market trends, consumer behavior, and competitor activities.
Businesses can use this information to improve their strategies, spot
new opportunities, and set themselves apart from the competition.
 Data analytics is a potent tool that can assist companies in enhancing
their operations and achieving better business results.
 Business Analytics provides an in-depth knowledge of the
organization’s data. This in turn helps in understanding the present
circumstances as well as in predicting future events and trends.
1. FINANCE
◦ Business Analytics assists financial managers in managing their
finances optimally and then taking relevant measures. Implementing
business analytics in various sectors of can prove to be highly
fruitful for the finance industry.
◦ It helps in building future strategies for a new product by observing
similar products and methodologies. In addition to this, business
analytics can also be used to predict future loan defaulters.
2. HUMAN RESOURCES MANAGEMENT (HRM)
◦ Human Resource Management is the process or practice of
managing, hiring, organizing, training, and directing people in an
organization in a strategic manner. Human Resources (or HR)
professionals use business analytics in several ways.
◦ It helps them in analyzing large amounts of data to understand
employees’ needs and grievances and therefore assist them
accordingly.
◦ Business analytics can be used by HR in determining the right
candidates, the expected salaries as well as the trending retention
rates in the industries.
3. PRODUCTION AND INVENTORY MANAGEMENT
 Management is a key element in every organization. It aims to
enhance the profits and productivity of an organization all the while
trying to reduce overall costs.
 Business Analytics serves as a great tool for management and
manufacturing. It is involved in every phase of product development.
It supports analyzing the inventory measures and designing business
solutions that are most suitable for products.
 It can help determine the costs and gauge the expected sales of
products. This way the organizations can adapt to the latest styles and
opportunities in the industry.
4. CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
◦ Customer Relationship Management or CRM is the process of
building and managing the organization’s relationships as well as
interactions with customers.
◦ Business analytics can be used in customer relationship management
to understand the customer base better and therefore, implement
corresponding strategies. This helps significantly drive sales and
amplifies the organization’s profits.
◦ Customers’ purchasing patterns, needs, buying behaviors, issues,
feedback, and all the other indicators can be obtained and analyzed
through business analytics methodologies.
WHAT IS DATA ANALYTICS IN BUSINESS?
 Data analytics is the practice of examining data to answer questions,
identify trends, and extract insights.
 When data analytics is used in business, it’s often called business
analytics.
 You can use tools, frameworks, and software to analyze data, such as
Microsoft Excel and Power BI, Google Charts, Data Wrapper,
Infogram, Tableau, and Zoho Analytics.
 These can help you examine data from different angles and create
visualizations that illuminate the story you’re trying to tell.
Importance Of Business Analytics:
 Business analytics is a methodology or tool to make a sound commercial
decision. Hence it impacts functioning of the whole organization. Therefore,
business analytics can help improve profitability of the business, increase
market share and revenue and provide better return to a shareholder.
 Business analytics combines available data with various well thought models to
improve business decisions.
 Converts available data into valuable information.
 This information can be presented in any required format, comfortable to the
decision maker.
 For starters, business analytics is the tool your company needs to make
accurate decisions.
 These decisions are likely to impact your entire organization as they help
you to improve profitability, increase market share, and provide a greater
return to potential shareholders.
Essentially, the four main ways business analytics is important :
 Improves performance by giving your business a clear picture of what is
and isn’t working.
 Provides faster and more accurate decisions .

 Minimizes risks as it helps a business make the right choices regarding

consumer behaviour, trends, and performance.
 Inspires change and innovation by answering questions about the
consumer.
 Apart from having applications in various arenas, following are the benefits
of Business Analytics and its impact on business –
 Accurately transferring information
 Consequent improvement in efficiency
 Help portray Future Challenges
 Make Strategic decisions
 As a perfect blend of data science and analytics
 Reduction in Costs
 Improved Decisions
 Share information with a larger audience
 Ease in Sharing information with stakeholders
 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.
 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.
 Another good example of business context driving analytics is the ‘did you
forget feature’ used by the Indian online grocery store bigbasket.com
(Abraham et al., 2016). Many customers have the tendency to forget items
they intended to buy. The customers may buy the forgotten items from a
nearby store where they live, resulting in reduction in basket size in the future
for online grocery stores such as bigbasket.com.
 Alternatively, the customer may place another order for forgotten items, but
this time, the size of the basket is likely to be small and results in unnecessary
logistics cost. Thus, the ability to predict the items that a customer may have
forgotten to order can have a significant impact on the profits of online grocers
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 or 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, big basket
created a ‘smart basket’ which is a basket consisting of items that a customer is likely
to buy (recommended basket) reducing the time required to place the order.
 The above examples( ‘did you forget’ and smart basket feature at bigbasket.com)
manifest the importance of business context in business analytics, that is, the ability to
ask the right questions is an important success criteria for analytics projects.
Technology:
 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 most data are
unstructured data; data that is not in the form of a matrix (rows and columns) is called
unstructured data. Images, texts, voice, video, click stream are few examples of
unstructured data. To analyse data, one may need to use software such as R, Python,
SAS, SPSS, Tableau, etc. for example, in the case of Target, technology can be used to
personalize coupons that can be sent to individual customers.
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.
 There are several techniques available for solving classification problems such as logistic
regression, classification trees, random forest, adaptive boosting, neural networks, and
so on. The objective of the data science component is to identify the technique that is
best based on a measure of accuracy.
What is Web Analytics?
 Web analytics is the gathering, synthesizing, and analysis of website data with
the goal of improving the website user experience.
 Web Analytics is the methodological study of online/offline patterns and
trends. It is a technique that you can employ to collect, measure, report, and
analyze your website data. It is normally carried out to analyze the
performance of a website and optimize its web usage.
 We use web analytics to track key metrics and analyze visitors’ activity and
traffic flow.
 It is a tactical approach to collect data and generate reports.
 Web analytics enables a business to retain customers, attract more
visitors and increase the dollar volume each customer spends.
Analytics can help in the following ways:
 Determine the likelihood that a given customer will repurchase a
product after purchasing it in the past.
 Personalize the site to customers who visit it repeatedly.
 Monitor the amount of money individual customers or specific groups of
customers spend.
 Observe the geographic regions from which the most and the least
customers visit the site and purchase specific products.
 Predict which products customers are most and least likely to buy in the
future.
 Web Analytics is an ongoing process that helps in attracting more traffic to a site and
thereby, increasing the Return on Investment.
The web analytics process involves the following steps:
1. Setting goals:
 The first step in the web analytics process is for businesses to determine goals and the
end results they are trying to achieve. These goals can include increased sales, customer
satisfaction and brand awareness.
2. Collecting data:
 The second step in web analytics is the collection and storage of data. Businesses can
collect data directly from a website or web analytics tool, such as Google Analytics.The
data mainly comes from Hypertext Transfer Protocol requests. For example, a
user's Internet Protocol address is typically associated with many factors, including
geographic location and click through rates.
3. Processing data:
 The next stage of the web analytics funnel involves businesses processing the collected
data into actionable information.
4. Identifying key performance indicators (KPIs):
 In web analytics, a KPI is a quantifiable measure to monitor and analyze user
behavior on a website. Examples user sessions and on-site search queries.
5. Developing a strategy :
 This stage involves implementing insights to formulate strategies that align with an
organization's goals. For example, search queries conducted on-site can help an
organization develop a content strategy based on what users are searching for on its
website.
6. Experimenting and testing:
 Businesses need to experiment with different strategies in order to find the one that
yields the best results.
 For example, A/B testing is a simple strategy to help learn how an audience
responds to different content. The process involves creating two or more versions of
content and then displaying it to different audience segments to reveal which
version of the content performs better.
 Text Analytics is the process of converting unstructured text data into
meaningful data for analysis, to measure customer opinions, product
reviews, feedback, to provide search facility, sentimental analysis and
entity modeling to support fact based decision making.
 Text analytics is the quantitative data that you can obtain by analyzing
patterns in multiple samples of text. It is presented in charts, tables, or
graphs.
 Text analytics helps you determine if there’s a particular trend or
pattern from the results of analyzing thousands of pieces of feedback.
Meanwhile, you can use text analysis to determine whether a
customer’s feedback is positive or negative
Text analytics in business :
 Every business strives to provide the best to their customers. To achieve this,
they are depending on text analytics to study and understand patterns, drifts in
behavior through the positive and negative feedback provided, buying trends,
opinions of consumers, blogs etc.
 And modify the approachability to satisfy needs which can make a greater
impact on business.
 By implementing text-based analytics, a business can bridge the gap to unlock
the very needs and demands of the customers.
 Text analytics focuses on quantitative insights that give the essence of ‘why’ a
particular problem arises and ‘what’ the reasons are and upon understanding,
‘how’ can a business overcome it in the most effective way.
 Various tools like HANA, Python, R, Microsoft excel etc can be used to
achieve important tasks of Text analytics as discussed below.
Important Tasks in Text Analytics:
 Information Extraction: It involves extracting the relevant information from
large volumes of textual data. It centres on extracting attributes and entities. This
information can be used for further analysis.
 Information Retrieval: Information Retrieval (IR) alludes to extricating relevant
and related examples dependent on a particular arrangement of words or
expressions. In this content mining strategy, IR frameworks utilize various
calculations to track and screen client practices and find applicable information as
needs are. Google and Yahoo web indexes are the two most famous IR frameworks.
 Clustering: It looks to recognize characteristic constructions in text based data and
sort them into relevant subgroups or 'bunches' for additional examination. A critical
test in the grouping interaction is to frame significant groups from the unlabelled
text-based information without having any earlier data on them.
 Summarization: This content mining strategy helps to create a
summary of a large volume of text in a way that the meaning and
intent of the original document is preserved.
 Categorization: This technique is used to classify text (review,
paragraph, document) into a relevant category. The text could be the
reviews provided by different users for a product and the reviews
could be classified as positive or negative. Similarly, a mail can be
classified into a spam or non spam email.
 Business analytics refers to the process of extracting insights from
data to make informed decisions regarding a business question or
challenge.
 Here are five skills you can develop to improve your understanding of
business analytics.
1. Data Literacy
 One of the fundamental skills to build before diving into business analytics
is data literacy. At its most basic, data literacy means you’re familiar with
the language of data, including different types, sources, and analytical
tools and techniques.
 Being data literate also means you’re comfortable working with data in
various ways—from evaluating it to manipulating it and gaining insights.
2. Data Collection
 The first step in leveraging analytics to drive business decisions is to collect a
data sample from which conclusions can be drawn.
 In some cases, a dataset already exists, and it’s up to the business analyst to
pull relevant information. For example, if you’re interested in discovering a
retail store’s most profitable products, you might start by pulling historical
sales data for transactions that took place over a specific period.
3. Statistical Analysis
 Several statistical methods can be helpful when it comes to analysis,
including:
 Hypothesis testing , which is a statistical means of testing an assumption.

 Linear regression analysis, which can be used to evaluate the relationship

between two variables.
 Multiple regression analysis, which is used to evaluate the relationship between
three or more variables.
 Through these forms of analysis, you can draw insights and conclusions that
answer your business question.
4. Communication
 While insights derived from reliable data are key to making informed business
decisions, it’s likely that other stakeholders need to be involved in the decision-
making process. For this reason, effectively communicating your findings is
essential. Without strong communication skills, the value of your analyses can
go unrealized.
5. Data Visualization
 Data visualization goes hand in hand with strong communication, as it allows
you to present findings in an easily digestible format for those who may not be
as data literate as you are.