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Chapter 2 With Notes

Business intelligence (BI) supports decision making by analyzing data and communicating insights. It helps make more effective decisions. Key BI components include tools like dashboards and data mining systems. BI helps different types of decisions for various industries like healthcare, education, and retail. It identifies patterns to improve operations, strategy, and reduce risks. BI requires skills in business, statistics, coding and thinking creatively about data.

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69 views21 pages

Chapter 2 With Notes

Business intelligence (BI) supports decision making by analyzing data and communicating insights. It helps make more effective decisions. Key BI components include tools like dashboards and data mining systems. BI helps different types of decisions for various industries like healthcare, education, and retail. It identifies patterns to improve operations, strategy, and reduce risks. BI requires skills in business, statistics, coding and thinking creatively about data.

Uploaded by

dhiralpatel
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Practical Applications of

Data Analytics
Chapter 2
Learning Objectives for this Lesson​
• Understand business intelligence(BI)
• Explain how business intelligence supports decision making
• Outline the key BI tools
• Identify the key BI skills
• Describe BI applications across various industries
Key Components of Data Analytics
Business Intelligence
• It is an umbrella term that includes a variety of IT applications
• Includes analyzing the data and communicating the results to the appropriate
users
• Data and information are the mainstay of an enterprise in the data
centric economy
• Decisions based on valuable insights generated from the data are
more effective than those based on feelings alone.
• Data is being viewed as a new natural resource which can be mined
for valuable insights and competitive advantage
Case of Khan Academy
• A non-profit educational organization
• It provides short YouTube video lessons on a number of educational topics for free.
• Lessons can be accessed any time and used as supplement to the core classroom
education.
• Student progress including videos watched, problems faced and scores are
recorded in a real time manner.
• Teachers get the macro and micro level of view of students performance in real
time (e.g. dashboards).
• Enables targeted teaching
• Behavioral data is used to infer lesson quality
BI for better decisions
• Data driven culture reduces the uncertainty associated with the
future and risk laden opportunities.
• Managers can make right decisions with lower levels of risk
• Speed of decision is also important in the hypercompetitive world
• e.g. an unfavorable comment made online (social media) about the company
or its product should not be left unaddressed for long
• A positive comment should also be utilized as a potential sales and promotion
opportunity
BI Helps in Better Decision Making
• Operational Decisions
• Routine and tactical decisions focused on greater efficiency (e.g. upgrading the software or
updating the website)
• Analysis of past data helps in better decision making
• Automate a number of operational decisions in a model driven way (e.g. financial loans
decisions can be automated using decision tree based models)
• Strategic Decisions
• Decisions that impact the direction of the company (e.g. new customer base)
• May not have clear cut goals
• Consequences of the decision may not have an immediate impact
• What if analysis of many possible scenarios
• Create new ideas based on new patterns found from data mining
• BI decisions are evolutionary
BI Tools
• Variety of software tools are available
• Can range from very simple tools (end user tools) to very
sophisticated (complex set of functionality)
• Spreadsheet tools such as Microsoft Excel
• Dashboarding system such as IBM Cognos or Tableau
• Datamining systems such as IBM SPSS Modeler, open source Weka for
large datasets
BI Skills
• Business domain knowledge
• Statistics knowledge
• Coding knowledge
• Open mind to think outside the box and see wider perspectives with
more dimensions and variables.
• Selecting the right data mining problem is an important skill.
• Data mining projects are resource intensive so the problem should be
valuable enough for solving.
BI and Data Mining Applications Span Wide
Spectrum of Industries
• Customer relationship management
• Healthcare and wellness
• Education
• Retail
• Banking
• Financial services
• Insurance
• Manufacturing
• Telecom
• Public sector
Customer Relationship Management

• Maximize the return on marketing campaigns


• Improve customer retention (churn analysis)
• Maximize customer value (cross-, up-selling)
• Identify and delight highly-valued customers
• Manage brand image
Healthcare and Wellness

• Diagnose disease in patients


• Predicting risk
• Treatment effectiveness
• Wellness management
• Manage fraud and abuse
• Public health management
• Practitioner performance evaluation
Education
• Student Enrollment (Recruitment and Retention)
• Course offerings
• Fund-raising from Alumni and other donors
• Measure, monitor, and respond in real time
• Student evaluation
Retail

• Optimize inventory levels at different locations


• Improve store layout and sales promotions
• Optimize logistics for seasonal effects
• Minimize losses due to limited shelf life
Banking

• Automate the loan application process


• Detect fraudulent transactions
• Maximize customer value (cross-, up-selling)
• Optimize cash reserves with forecasting
• Discovering the spending patterns of the customers
• Splitting the customers into segments according to their
profiles
Financial services

• Predict changes in bond and stock prices


• Assess the effect of events on market movements
• Identify and prevent fraudulent activities in trading
Insurance

• Forecast claim costs for better business planning:


• Determine optimal rate plans:
• Optimize marketing to specific customers:
• Identify and prevent fraudulent claim activities.
Manufacturing

• Discover novel patterns to improve product quality


• Predict/prevent machinery failures
Telecom

• Churn management
• Marketing and product creation
• Network failure management
• Fraud management
Public sector

• Law enforcement
• Scientific research
What Have we Learned
• Importance of business intelligence
• Decision types
• BI tools
• BI skills
• Areas of BI applications

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