Module 1

• Introduction to Business Analytics:

Definition, Types - Descriptive, Predictive
and Prescriptive Analytics
• Predictive and Prescriptive Analytics,
Business Analytics for decision making
• Ethics in data management
 • Businesses use analytics to explore and examine
their data and then transform their findings into
insights that ultimately help executives, managers
and operational employees make better, more
informed business decisions.
• The major types of analytics businesses use are
Data descriptive analytics, what has happened in a
business; predictive analytics, what could happen;
analytics and prescriptive analytics, what should happen.
• While each of these methodologies offers its own
(definition ) unique insights, advantages and disadvantages in
their application, used in combination these
analytics tools can be an especially powerful asset
to a business.
• https://www.youtube.com/watch?v=diaZdX1s5L4
Business analytics
• Business analytics is the process of transforming data into insights to
improve business decisions.
• Amazon.com turns sales data into insights by analyzing millions of purchases to
find customers like you and predict products you might buy.
• General Electric can predict in advance from its sensor data when engine
maintenance is needed.
• Based on a survey you filled out, Disney can alert its servers, via your
MagicBand, that you prefer a booth to a table and that your favorite character is
Minnie Mouse. When you arrive, you are seated at a booth, and Minnie makes it a
point to visit you at lunch
BA in Health care
• Optimizing Health Insurance Delivery
• Reducing the Risk of Surgical Complications
• Improving Mental Healthcare
• Evaluates key emergency room factors such as:
 Length of stay
 Impact of visit
 Hour of the day
 Day of the week
 Season of the year
• Variances in healthcare provider productivity
• Predicting and Detecting Diseases
• Avoiding Unnecessary Medical Interventions
• Bettering Follow-up Care
• https://www.lxahub.com/stories/adverity-ikea-case-study
Descriptive Analytics: Insight into the past

• Descriptive analysis or statistics does exactly what the name implies:

they “describe”, or summarize, raw data and make it something that is
interpretable by humans.
• They are analytics that describe the past.
• The past refers to any point of time that an event has occurred,
whether it is one minute ago, or one year ago.
• Descriptive analytics are useful because they allow us to learn from
past behaviors, and understand how they might influence future
outcomes.
Descriptive analytics
• Descriptive analytics is a commonly used form of data analysis whereby historical data is
collected, organised and then presented in a way that is easily understood.
• Descriptive analytics is focused only on what has already happened in a business and, unlike
other methods of analysis, it is not used to draw inferences or predictions from its findings.
• Descriptive analytics is, rather, a foundational starting point used to inform or prepare data
for further analysis down the line.
• Generally, the most simplistic form of data analytics, descriptive analytics uses simple maths
and statistical tools, such as arithmetic, averages and per cent changes, rather than the
complex calculations necessary for predictive and prescriptive analytics.
• Visual tools such as line graphs and pie and bar charts are used to present findings,
meaning descriptive analytics can – and should – be easily understood by a wide
business audience.
• Descriptive analytics uses two key methods, data aggregation and data mining (also
known as data discovery), to discover historical data. Data aggregation is the process of
collecting and organising data to create manageable data sets. These data sets are then used
in the data mining phase where patterns, trends and meaning are identified and then
presented in an understandable way.
 • Business metrics are decided. First, metrics are created that will
effectively evaluate performance against business goals, such as
improving operational efficiency or increasing revenue. the success of
descriptive analytics heavily relies on KPI (key performance
indicator) governance.
• The data required is identified. Data is sourced from repositories
such as reports and databases. ‘To measure accurately against KPIs,

Descriptive ‘companies must catalogue and prepare the correct data sources to
extract the needed data and calculate metrics based on the current
state of the business.
analytics • The data is collected and prepared. Data preparation –
transformation and cleansing, for example – takes place before the
process analysis stage and is a critical step to ensure accuracy; it is also one of
the most time-consuming steps for the analyst.
• The data is analysed. Summary statistics, clustering, pattern tracking
and regression analysis are used to find patterns in the data and
measure performance.
• The data is presented. Finally, charts and graphs are used to present
findings in a way that non-analytics experts can understand.
Descriptive analytics :Usage
• Descriptive analytics is frequently used in the day-to-day operations of an
organisation.
• Company reports – such as those on inventory, workflow, sales and
revenue – are all examples of descriptive analytics that provide a historical
review of an organisation’s operations.
• Data collected by these kinds of reports can be easily aggregated and
used to create snapshots of an organisation’s operations.
• Social analytics are almost always an example of descriptive analytics. The
number of followers, likes and posts can be used to determine the average number
of replies per post, the number of page views and the average response time, for
example. The comments that people post on Facebook or Instagram are also
examples of descriptive analytics and can be used to better understand user
attitudes.
advantages and disadvantages of descriptive analytics

• Since descriptive analytics relies only on historical data and simple

calculations, this methodology can easily be applied in day-to-day
operations, and its application doesn’t necessarily require an extensive
knowledge of analytics.
• This means that businesses can relatively quickly and easily report on
performance and gain insights that can be used to make improvements.
• On the other hand, descriptive analytics has the obvious limitation that
it doesn’t look beyond the surface of the data – this is where predictive
and prescriptive analytics come into play.
Egs descriptive analytics
• helps organisations measure performance to ensure goals and targets
are being met. And if they aren’t being met, descriptive analytics can
identify areas that require improvement or change.
Some examples of how descriptive analytics can be used include the
following:
• Summarising past events such as sales and operations data or
marketing campaigns
• Social media usage and engagement data such as Instagram or
Facebook likes
• Reporting general trends
• Collating survey results
Predictive Analytics: Understanding the future

• Predictive analytics has its roots in the ability to “predict” what might
happen.
• These analytics are about understanding the future.
• Predictive analytics provides companies with actionable insights
based on data.
• Predictive analytics provides estimates about the likelihood of a future
outcome
• use of predictive analytics to produce a credit score. These scores are
used by financial services to determine the probability of customers
making future credit payme
Predictive Analytics

• While descriptive analytics focuses on historical data, predictive

analytics, as its name implies, is focused on predicting and
understanding what could happen in the future.
• Analysing past data patterns and trends by looking at historical data
and customer insights can predict what might happen going forward
and, in doing so, inform many aspects of a business, including setting
realistic goals, effective planning, managing performance expectations
and avoiding risks.
 Predictive Analytics

• Predictive analytics is based on probabilities.

• Using a variety of techniques – such as data mining, statistical modelling (mathematical
relationships between variables to predict outcomes) and machine learning algorithms
(classification, regression and clustering techniques) – predictive analytics attempts to
forecast possible future outcomes and the likelihood of those events.
• To make predictions, machine learning algorithms, for example, take existing data and
attempt to fill in the missing data with the best possible guesses.
• A newer branch of machine learning is deep learning, which, according to
Cornerstone Performance Management, mimics the construction of ‘human neural
networks as layers of nodes that learn a specific process area but are networked together
into an overall prediction.’
• Deep learning examples include credit scoring using social and environmental analysis
and sorting digital medical images such as X-rays to automate predictions for doctors to
use when diagnosing patients.
Predictive analytics

• Since predictive analytics can tell a business what could happen in the
future, this methodology empowers executives and managers to take a
more proactive, data-driven approach to business strategy and decision
making.
• Businesses can use predictive analytics for anything from forecasting
customer behaviour and purchasing patterns to identifying sales
trends.
• Predictions can also help forecast such things as supply chain,
operations and inventory demands.
Advantages and disadvantages of predictive analytics

• Predictive analysis is based on probabilities, it can never be completely accurate – but it

can act as a vital tool to forecast possible future events and inform effective business
strategy for the future.
• Predictive analytics can also improve many areas of a business, including:
• Efficiency, which could include inventory forecasting
• Customer service, which can help a company gain a better understanding of who their
customers are and what they want in order to tailor recommendations
• Fraud detection and prevention, which can help companies identify patterns and changes
• Risk reduction, which, in the finance industry, might mean improved candidate screening
• This method of analysis relies on the existence of historical data, usually large amounts of
it.
Examples Of predictive analytics

• The healthcare industry, as an example, is a key beneficiary of predictive analytics. In 2019,

RMIT University partnered with Digital Health Cooperative Research Centre to
develop clinical decision support software for aged care that will reduce emergency
hospitalisations and predict patient deterioration by interpreting historical data and developing
new predictive analytics techniques. The goal is that predictive analytics will allow aged-care
providers, residents and their families to better plan for the end of life.
• Other examples of industries in which predictive analysis can be used,, include the following:
• E-commerce – predicting customer preferences and recommending products to customers based
on past purchases and search history
• Sales – predicting the likelihood that customers will purchase another product or leave the store
• Human resources – detecting if employees are thinking of quitting and then persuading them to
stay
• IT security – identifying possible security breaches that require further investigation
• Healthcare – predicting staff and resource needs
Prescriptive Analytics: Advise on possible outcomes
• The relatively new field of prescriptive analytics allows users to “prescribe” a number of
different possible actions and guide them towards a solution.
• In a nutshell, these analytics are all about providing advice.
• Prescriptive analytics attempts to quantify the effect of future decisions in order to
advise on possible outcomes before the decisions are actually made.
• At their best, prescriptive analytics predicts not only what will happen, but also why it
will happen, providing recommendations regarding actions that will take advantage of
the predictions.
• Prescriptive analytics use a combination of techniques and tools such as business rules,
algorithms, machine learning and computational modelling procedures. These techniques
are applied against input from many different data sets including historical and
transactional data, real-time data feeds, and big data.
• Descriptive analytics tells you what has happened and predictive analytics tells you what
could happen, then prescriptive analytics tells you what should be done
 Prescriptive Analytics
• Prescriptive analytics takes what has been learned through
descriptive and predictive analysis and goes a step further by
recommending the best possible courses of action for a business.
• This is the most complex stage of the business analytics process,
requiring much more specialised analytics knowledge to perform,
and for this reason it is rarely used in day-to-day business
operations.
• predictive analytics looks at historical data using statistical techniques to
make predictions about the future, machine learning, a subset of
artificial intelligence, refers to the ability of a computer system to
understand large – often huge – amounts of data, without explicit
directions, and while doing so adapt and become increasingly smarter.
Prescriptive analytics

• Prescriptive analytics anticipates what, when and, importantly, why

something might happen.
• After considering the possible implications of each decision option,
recommendations can then be made in regard to which decisions will best
take advantage of future opportunities or mitigate future risks.
• prescriptive analytics predicts multiple futures and, in doing so, makes it
possible to consider the possible outcomes for each before any decisions are
made.
• When prescriptive analytics is performed effectively, findings can have a
real impact on business strategy and decision making to improve things
such as production, customer experience and business growth.
Advantages disadvantages of prescriptive analytics

• Prescriptive analytics, when used effectively, provides invaluable

insights in order to make the best possible, data-based decisions to
optimise business performance.
• However, as with predictive analytics, this methodology requires
large amounts of data to produce useful results, which isn’t always
available.
• Also, machine learning algorithms, on which this analysis often relies,
cannot always account for all external variables.
• On the flip side, the use of machine learning dramatically reduces the
possibility of human error.
Examples of prescriptive analytics
 a commonly used prescriptive analytics tool is GPS technology, since it provides recommended
routes to get the user to their desired destination based on such things as journey time and road
closures.
 In this instance, prescriptive analysis ‘optimises an objective that measures the distances from
your starting point to your destination and prescribes the optimal route that has the shortest
distance.’
Other areas of prescriptive analysis application, according to data analytics firm Sisense, include
the following:
• Oil and manufacturing – tracking fluctuating prices
• Manufacturing – improving equipment management, maintenance, price modelling, production
and storage
• Healthcare – improving patient care and healthcare administration by evaluating things such as
rates of readmission and the cost-effectiveness of procedures
• Insurance – assessing risk in regard to pricing and premium information for clients
• Pharmaceutical research – identifying the best testing and patient groups for clinical trials.
Ethics in data management
• Facebook's recent data breach, if found to violate the EU General Data
Protection Regulation (GDPR), could cost them 4% of their global revenue (or
$1.63 billion) in fines.
• This resonated as a warning shot to enterprises across the globe.
Why should businesses handle their users' data ethically?
• The answer is simple: it helps them earn their customers' trust. Every organization is,
at its core, in the people business
• . The trust they establish determines their success.
• That trust is notoriously easy to lose; a single instance of unethical behavior by a
company could jeopardise its future.
• Companies have expended enormous amounts of money and effort to fix small
negligences in ethical data handling..
• To preserve consumer trust, companies will need to go beyond data security and
privacy to ensure that there is ethical handling of data within and beyond the
organisation. Clearly defined and communicated principles and practices can drive
honest and appropriate behaviors. That's where Data Governance comes in.
Ethics in data management
• defining ownership of data,
• obtaining consent to collect and share data,
• protecting the identity of human subjects and
• their personal identifying information, and
• the licensing of data. Etc
Main
• What are the 3 basic data ethics?
• PRINCIPLE ONE: Minimising the risk of harm.
• PRINCIPLE TWO: Obtaining informed consent.
• PRINCIPLE THREE: Protecting anonymity and confidentiality.
PRINCIPLE FOUR: Avoiding deceptive practices.
Ethics in data management

• Before enterprises can initiate Data Governance, they must identify the
regulations and frameworks relevant to their businesses.
• Data Governance programs could benefit from ethics frameworks from the
government and/or the wider public sector.
• The UK's Department for Digital, Culture, Media & Sport, for example,
formulated one in service of its National Data Strategy.
• It outlines principles on how data should be used in the public sector,
emphasising the importance of collective standards and ethical
frameworks.
• Such frameworks serve as guidelines on understanding the effects of
technology, data workflows and data sharing, as well as their ethical
and real-world consequences
Ethics in data management

• Data ethics describes a behavior code, often focused on what is wrong

and what is right.
This encompasses the following:
• Data management – This includes recording, generation, curation,
dissemination, processing, use, and sharing.
• Algorithms – This includes machine learning al, robots, and artificial
agents.
• Corresponding practices – It includes programming, responsible
innovation, professional codes, and hacking.
ethical principles
• experts agree on the following ethical principles for using data:
1. Privacy customer identity and data should remain private – The term privacy does not mean
confidentiality, as private information might need for auditing based on the requirements in the
legal procedure. However, this private data was acquired from an individual with full consent. It is
also noted that the data should not be revealed for the utilization of other individuals or
companies, allowing them to track their identity.
2. Shared private information should always remain private – In most cases, third-party
companies share sensitive data. The typical examples of these are locational, financial, and
medical data. Also, they need to have limitations on how the data can be shared for privacy and
legal concern.
3. Customers should exercise a transparent view of how the data is being sold or utilized.
They also need to have the ability to handle the flow of their private data across third-party and
massive analytical systems.
4. There should be no interference between big data and human will. This is one of the ethical
principles for using data as big data analytics can determine and even moderate who we are
before making up our minds. Organizations need to start to ponder about the types of inferences
and predictions that should be and not allowed.
5. Big data should not institutionalize prejudicial biases – The typical examples of these are sexism
and racism. Algorithms of machine learning can grip unconscious biases in people and empower
them through countless training samples.
Ethical principles

Ethical principles for using data provide a high-level and wide context
for resolving ethical predicaments, namely:
• Secure vulnerable humans who could be impaired by the activities in
their professions;
• Enhance and protect the trust and reputation for the profession;
• Give a basis for public evaluation and expectations of the profession;
• Make the profession as a diverse moral public worthy of self-
sufficiency from external regulation and control;
• Serve as a guide for adjudicating disputes among organizations,
both non-members and members;
• Make institutions buoyant in the face of external burdens; and
• https://www2.deloitte.com/us/en/insights/industry/public-sector/chief-
data-officer-government-playbook/managing-data-ethics.html
• India : The new law, the Personal Data Protection Bill (PDP), is
currently in front of parliament and was proposed to effect a
comprehensive overhaul of India's current data protection regime,
which today is governed by the Information Technology Act, 2000.
• PDP Bill proposes that the processing of personal data must
comply with seven principles for processing, namely: (i)
processing of personal data has to be fair and reasonable; (ii) it
should be for a specific purpose; (iii) only personal data
necessary for the purpose should be collected; (iv) it should be
lawful;
UK GDPR sets out seven key principles:
• Lawfulness, fairness and transparency.
• Purpose limitation.
• Data minimisation.
• Accuracy.
• Storage limitation.
• Integrity and confidentiality (security)
• Accountability.