AN OVERVIEW of

BUSINESS ANALYTICS

By

Dr.B.Srinivasan IRAS; M.Com.,MBA.,P.hd

Dy.Financial Adviser and Chief Accounts Officer
Southern Railway, Chennai

WHAT IF YOU COULD

predict the buying behavior and decision criteria of your
prospects weeks before your competition?
. gain first-mover advantage by introducing new products
and services to micro-segments that haven't been
identified by competitors?
.evaluate the impact of your marketing campaigns hourly
and make adjustments in real-time?
. improve customer experience scores that grow products
per customer, reduce attrition, and leverage the power of
customer recommendations for new business?
.predict likely failures of critical equipment and
processes?
.

What is Business Analytics ?

Business

Analytics is all about the

decisions that go into the running of
the business.
Encompasses methodologies from
applied mathematics, probability,
statistics,signal processing
Computer Science to gain insight
into Business performance.
Used as Decision Support System

Not

same as Operation Research

Business analytics(BA) refers to the
skills,
technologies,
practices
for
continuous iterative exploration and
investigation
of
past
business
performance to gain insight and drive
business planning.
Business analytics focuses on developing
new insights and understanding of
business performance based ondataand
statistical methods

Why Business Analytics ?

To achieve Goals
High

return on Assets

High

return on equity

High

Revenue

Low

Cost

Low

expenses

Revenue
Cash

Targets

flow targets

Businessanalyticsmakes

extensive use
ofstatisticalanalysis,
including
explanatory andpredictive modelling,and
fact-based management to drivedecision
making.
It is
closely related tomanagement
science.
Analytics may be used as input for human
decisions or may drive fully automated
decisions.
Business
intelligence
isquerying,reporting, online analytical
processing(OLAP), and "alerts."

Business

intelligence isquerying,reporting,
analytical processing(OLAP), and

online
"alerts.
Querying, reporting, OLAP, and alert tools can
answer questions such as what happened,
how many, how often, where the problem is,
and what actions are needed. Business
analytics can answer questions like why is
this happening, what if these trends continue,
what will happen next (that is, predict), what
is the best that can happen (that is,
optimize).

Examples of Application:Banks

usedata analysis(oranalytics, as it is
also called in the business to differentiate
among customers based oncredit risk, usage
and other characteristics and then to match
customer characteristics with appropriate
product offerings.
Companies use analytics in itscustomer loyalty
programs.quantitatively analyze and predicts
the appeal of its products. One company saved
more than $1 billion by employing a new
analytical tool to better optimize inventory.

Types of analytics
Decisive

analytics:
supports
human
decisions with visual analytics the user
models to reflect reasoning.
Descriptive Analytics: Gain insight from
historical
data
withreporting,
scorecards,clusteringetc.
Predictive Analytics: (predictive modeling
using
statistical
andComputer
basedtechniques)
Prescriptive
Analytics:recommend
decisions using optimization, simulation
etc

Basic
Domains of Analytics:
Behavioural Analytics
Cohort

Analytics
Collections analytics
Contextual data modelling - supports
the human reasoning that occurs
after viewing "executive dashboards"
or any other visual analytics
Financial Servicesanalytics

Cohort analysis
Cohort analysis is a subset of behavioural analytics that takes
the data from a given e Commerce platform, web application,
or online game and rather than looking at all users as one unit,
it breaks them into related groups for analysis. These related
groups, or cohorts, usually share common characteristics or
experiences within a defined time span. Cohort analysis allows
a company to see patterns clearly across the lifecycle of a
customer (or user), rather than slicing across all customers
blindly without accounting for the natural cycle that a
customer undergoes.

By seeing these patterns of time, a company can

adapt and tailor its service to those specific
cohorts. While cohort analysis is sometimes
associated with a cohort study, they are different
and should not be viewed as one in the same.
Cohort analysis has come to describe specifically
the analysis of cohorts in regards to big data and
business analytics, while a cohort study is a more
general umbrella term that describes a type of
study in which data is broken down into similar
groups

Basic domains within analytics

Fraudanalytics
Marketinganalytics
Pricing analytics
Retail salesanalytics
Risk & Creditanalytics
Supply Chainanalytics
Talent analytics
Telecommunication
Transportation analytics

History of Analytics
Analytics

have been used in business

since the management exercises were put
into place byFrederick Winslow Taylorin
the late 19th century.
Henry Ford measured the time of each
component in his newly established
assembly line.
But analytics gained more attention in the
late 1960s when computers were used
indecision support systems.

History of Analytics

Since then, analytics have

changed and formed with the
development
ofenterprise
resource
planning
(ERP)
systems,data ware houses, and
a large number of other software
tools and processes.

 Success

of Business analytics
Challenges
depends on sufficient volumes of
high quality data. The difficulty in
ensuring
data
quality
is
integrating and reconciling data
across different systems, and then
deciding what subsets of data to
make available.

ANALYTICS EXAMPLE
APPLICATIONS

TEXT ANALYTICS
Finding treasures in
unstructured data
like social media or
survey tools
which could
uncover insights
about consumer
sentiment

FORECASTING
Leveraging historical time series
data to provide better insights
into decision-making about the
future

INFORMATION
MANAGEMENT

OPTIMIZATION
Analyze massive
amounts of data in
order to accurately
identify decisions
which are likely to
produce the most
optimal results

DATA MINING
Mine transaction databases
of records about spending
patterns which indicate a
stolen card

STATISTICS
Copyright 2012, SAS Institute Inc. All rights reserved.

THE IMPACT OF ANALYTICS SPANS THE ENTIRE

ORGANIZATION

Trusted, analytically-based decisions are needed across the organization.

Successful analytics are

necessary in every business
discipline: Planning, Research
and Development, Marketing,
Sales, Operations, Finance,
Manufacturing, and Information
Technology.

Copyright 2012, SAS Institute Inc. All rights reserved.

THE ANALYTICS LIFECYCLE

BUSINESS
MANAGER

IDENTIFY /
FORMULATE
PROBLEM
EVALUATE /
MONITOR
RESULTS

DATA
PREPARATION

Domain Expert
Makes Decisions
Evaluates Processes and ROI

Data Exploration
Data Visualization
Report Creation

DEPLOY
MODEL

IT / SYSTEMS
MANAGEMENT
Model Validation
Model Deployment
Model Monitoring
Data Preparation

BUSINESS
ANALYST

DATA
EXPLORATION

DATA MINER /
STATISTICIAN

VALIDATE
MODEL

TRANSFORM
& SELECT
BUILD
MODEL

Copyright 2012, SAS Institute Inc. All rights reserved.

Exploratory Analysis
Descriptive Segmentation
Predictive Modeling

CURRENT TRENDS IN ANALYTICS - BIG DATA

VOLUME

DATA SIZE

VARIETY
VELOCITY
VALUE

TODAY

THE FUTURE
Copyright 2012, SAS Institute Inc. All rights reserved.

The Business Analytics (BA)

Field: An Overview

Classification of BA tools:

1.

Enterprise reporting

2.

Cube analysis

3.

Ad hoc querying and analysis

4.

Statistical analysis and data mining

5.

Report delivery and alerting

The Business Analytics (BA) Field: An

Overview

Strategic enterprise
management
Three levels of support
1. Operational
2. Managerial
3. Strategic

The Business Analytics (BA) Field: An

Overview

Executive information and support systems

Executive information systems (EIS)

Provides rapid access to timely and relevant

information aiding in monitoring an
organizations performance

Executive support systems (ESS)

Also provides analysis support,

communications, office automation, and
intelligence support
Drill-down
The investigation of information in detail (e.g.,
finding not only total sales but also sales by
region, by product, or by salesperson). Finding
the detailed sources

Online Analytical Processing (OLAP)

Online analytical processing (OLAP)

An information system that enables
the user, while at a PC, to query the
system, conduct an analysis, and so
on. The result is generated in
seconds
Some applications can be found at:
http://www.olapreport.com/CaseStu
diesIndex.htm

Online Analytical Processing (OLAP)

OLAP versus OLTP : OLTP concentrates on processing

repetitive transactions in large quantities
and conducting simple manipulations
OLAP involves examining many data
items complex relationships
OLAP may analyze relationships and look
for patterns, trends, and exceptions
OLAP is a direct decision support method

Reports and Queries

Reports
Routine reports
Ad hoc (or on-demand) reports
Multilingual support
Scorecards and dashboards
Report delivery and alerting
Report distribution through any touch point
Self-subscription as well as administratorbased distribution
Delivery on-demand, on-schedule, or onevent
Automatic content personalization

Reports and Queries

Ad

hoc query
A query that cannot be determined
prior to the moment the query is
issued
Structured Query Language (SQL)
A data definition and management
language for relational databases.
SQL front ends most relational DBMS

Multidimensionality
Multidimensionality

The ability to organize, present, and

analyze data by several dimensions,
such as sales by region, by product, by
salesperson, and by time (four
dimensions)
Multidimensional presentation
Dimensions
Measures
Time

Multidimensionality
Multidimensional

database
A database in which the data are
organized specifically to support easy
and quick multidimensional analysis
Data cube
A two-dimensional, three-dimensional,
or higher-dimensional object in which
each dimension of the data
represents a measure of interest

Multidimensionality
Cube

A subset of highly interrelated data

that is organized to allow users to
combine any attributes in a cube (e.g.,
stores, products, customers, suppliers)
with any metrics in the cube (e.g.,
sales, profit, units, age) to create
various two-dimensional views, or
slices, that can be displayed on a
computer screen

Multidimensionality

Multidimensionality

Multidimensional tools and

vendors
Tools
with multidimensional
capabilities often work in
conjunction
with
database
query systems and other OLAP
tools

Multidimensionality

Advanced Business Analytics

Data

mining and predictive analysis

Data mining
Predictive analysis
Use of tools that help determine the
probable future outcome for an
event or the likelihood of a situation
occurring. These tools also identify
relationships and patterns

Data Visualization
Data

visualization
A
graphical,
animation,
or
video
presentation of data and the results of
data analysis
The ability to quickly identify important
trends in corporate and market data can
provide competitive advantage
Check their magnitude of trends by using
predictive models that provide significant
business advantages in applications that
drive content, transactions, or processes

Data Visualization
New

directions in data visualization

In the 1990s data visualization has
moved into:
Mainstream computing, where it is
integrated with decision support
tools and applications
Intelligent
visualization,
which
includes
data
(information)
interpretation

Data Visualization
New directions in data visualization
Dashboards and scorecards
Visual analysis

http://www.lumina.com/software/influe
ncediagrams.html influence diagrams
Financial data visualization
Tree Map Examples
http://www.robkerr.com/post/2008/04/F
avorite-Visualization-2-e28093-ThePerformance-Map-(Heat-Map).aspx
http://visudemos.ilog.com/webdemos/t
reemap/treemap.html

Geographic
Information Systems (GIS)
Geographical information system (GIS)
An information system that uses spatial data,
such as digitized maps. A GIS is a combination
of text, graphics, icons, and symbols on maps
As
GIS
tools
become
increasingly
sophisticated and affordable, they help more
companies and governments understand:
Precisely where their trucks, workers, and
resources are located
Where they need to go to service a customer
The best way to get from here to there

Geographic
Information Systems (GIS)
As

GIS tools become increasingly

sophisticated and affordable, they help
more companies and governments
understand:
Precisely where their trucks, workers,
and resources are located
Where they need to go to service a
customer
The best way to get from here to
there

Geographic
Information Systems (GIS)

GIS and decision making

GIS applications are used to improve decision
making in the public and private sectors
including:
Dispatch of emergency vehicles
Transit management
Facility site selection
Drought risk management
Wildlife management
Local governments use GIS applications for
used mapping and other decision-making
applications

Geographic
Information Systems (GIS)
GIS combined with GPS
Global positioning systems (GPS)
Wireless devices that use satellites to enable users to
detect the position on earth of items (e.g., cars or people)
the devices are attached to, with reasonable precision
GIS and the Internet/intranets
Most major GIS software vendors provide Web access that
hooks directly to their software
GIS can help the manager of a retail operation determine
where to locate retail outlets
Some firms are deploying GIS on the Internet for internal
use or for use by their customers (locate the closest store
location)

Geographic
Information Systems (GIS)

GIS and the Internet/intranets

Most major GIS software vendors provide Web
access that hooks directly to their software
GIS can help the manager of a retail
operation determine where to locate retail
outlets
Some firms are deploying GIS on the Internet
for internal use or for use by their customers
(locate the closest store location)
http://www.360networks.com/includes/popups
/rate_center_map/map.asp

Real-Time BI
The trend toward BI software producing real-time data
updates for real-time analysis and real-time decision
making is growing rapidly
Part of this push involves getting the right information to
operational and tactical personnel so that they can use new
BA tools and up-to-the-minute results to make decisions
Concerns about real-time systems
An important issue in real-time computing is that not all
data should be updated continuously
when reports are generated in real-time because one
persons results may not match another persons causing
confusion
Real-time data are necessary in many cases for the
creation of ADS systems

Real-Time BI
Concerns

about real-time systems

An
important
issue
in
real-time
computing is that not all data should be
updated continuously
when reports are generated in real-time
because one persons results may not
match
another
persons
causing
confusion
Real-time data are necessary in many
cases for the creation of ADS systems

BA and the Web: Web Intelligence and

Web Analytics
Using

the Web in BA
Web analytics
The application of business
analytics activities to Web-based
processes, including e-commerce
Clickstream analysis
The analysis of data that occur in
the Web environment.

BA and the Web: Web Intelligence and

Web Analytics
Clickstream analysis
The analysis of data that occur in the Web
environment.
Clickstream data
Data that provide a trail of the users activities
and show the users browsing patterns (e.g.,
which sites are visited, which pages, how long)
Clickstream data
Data that provide a trail of the users activities
and show the users browsing patterns (e.g.,
which sites are visited, which pages, how long)

BA and the Web: Web

Intelligence and Web Analytics

Usage, Benefits,
and Success of BA
Usage

of BA
Almost all managers and executives
can use some BA systems, but some
find the tools too complicated to use or
they are not trained properly.
Most
businesses want a greater
percentage of the enterprise to
leverage analytics; most of the
challenges
related
to
technology
adoption involve culture, people, and
processes

Usage, Benefits,
and Success of BA
Success and usability of BA
Performance
management
systems (PMS) are BI tools that
provide scorecards and other
relevant information that decision
makers use to determine their
level of success in reaching their
goals

Usage, Benefits,
and Success of BA

Why BI/BA projects fail

1. Failure to recognize BI projects as
cross-organizational
business
initiatives and to understand that, as
such,
they
differ
from
typical
standalone solutions
2. Unengaged or weak business sponsors
3. Unavailable
or unwilling business
representatives from the functional
areas

Usage, Benefits,
and Success of BA

Why BI/BA projects fail

4. Lack of skilled (or available) staff,
or suboptimal staff utilization
5. No software release concept (i.e.,
no iterative development method)
6. No work breakdown structure (i.e.,
no methodology)

Usage, Benefits,
and Success of BA

Why BI/BA projects fail

No
business
analysis
or
standardization activities
8. No appreciation of the negative
impact of dirty data on business
profitability
9. No understanding of the necessity
for and the use of metadata
10. Too
much reliance on disparate
methods and tools
7.

Usage, Benefits,
and Success of BA

System development and the

need for integration
Developing an effective BI decision
support application can be fairly
complex
Integration,
whether
of
applications, data sources, or even
development environment, is a
major CSF for BI

Any

Questions ?