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Lecture 2

The document discusses the importance of business analytics. It provides an overview of business analytics and describes four types of business analytics techniques: descriptive analytics, diagnostic analytics, predictive analytics, and prescriptive analytics. Descriptive analytics analyzes historical data to uncover trends. Diagnostic analytics seeks to explain anomalies. Predictive analytics makes predictions about the future using patterns in historical data. Prescriptive analytics determines what needs to be done to achieve goals based on past performance.

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9 views

Lecture 2

The document discusses the importance of business analytics. It provides an overview of business analytics and describes four types of business analytics techniques: descriptive analytics, diagnostic analytics, predictive analytics, and prescriptive analytics. Descriptive analytics analyzes historical data to uncover trends. Diagnostic analytics seeks to explain anomalies. Predictive analytics makes predictions about the future using patterns in historical data. Prescriptive analytics determines what needs to be done to achieve goals based on past performance.

Uploaded by

gaclasherscoccr
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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INSTITUTE –University School of

Business
DEPARTMENT -AIT
M.B.A

Basics of Business Analytics


Course Code-BBO-104
Faculty Name : Dr. Syed Abou Iltaf Hussain

Lecture no. 2 : Why Business Analytics is important?


DISCOVER . LEARN . EMPOWER

UNIT-1: Introduction to Business Analytics

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Why Business Analytics is Crucial?

Improved Efficiency Increase revenue

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The Importance of Business Analytics

Delivering Business Intelligence in Real-Time

1. Business processes must be efficient and responsive.

2. Managers need real-time business intelligence and predictive analytics to


make the right decisions quickly and confidently.

This is a big change from the traditional business model, where


decisions were made at the top and only after a laborious process
involving numerous meetings, formal presentations, and pie charts
Types of Business Analytics Techniques
Business analytics techniques can be segmented in the following four ways:

1. Descriptive Analytics: This technique describes the past or present situation of the
organization's activities.

2. Diagnostic Analytics: This technique discovers factors or reasons for past or current
performance.

3. Predictive Analytics: This technique predicts figures and results using a combination
of business analytics tools.

4. Prescriptive Analytics: This technique recommends specific solutions for businesses


to drive their growth forward.
Descriptive Analytics

Descriptive analytics is the analysis of historical data using two key methods – data aggregation
and data mining - which are used to uncover trends and patterns. Descriptive analytics is not used
to draw inferences or make predictions about the future from its findings; rather it is concerned
with representing what has happened in the past.

Examples of descriptive analytics include KPIs such as year-on-year percentage sales growth,
revenue per customer and the average time customers take to pay bills. The products of
descriptive analytics appear in financial statements, other reports, dashboards and presentations.
Diagnostic Analytics

• Diagnostic analytics is also known as root cause analysis because of its emphasis on
cause and effect. Diagnostic analytics, like descriptive analytics, relies on previous data.
Its distinguishing trait, however, is that it seeks to detect and explain anomalies and
outliers.
• It is characterized by techniques such as drill-down, data discovery, data mining and
correlations.
• Example of diagnostic analytics is a marketing funnel analysis.
Predictive Analytics

• Predictive analytics is a branch of advanced analytics that makes predictions about


future outcomes using historical data combined with statistical modeling, data mining
techniques and machine learning.
• Companies employ predictive analytics to find patterns in this data to identify risks and
opportunities.
• Predictive analytics is often associated with big data and data science.
Prescriptive Analytics

• Prescriptive analytics is a form of data analytics that uses past performance and trends
to determine what needs to be done to achieve future goals. Even with the obvious
benefits, business leaders should understand that prescriptive analytics has its own
drawbacks.

For instance, prescriptive analytics could be used to:


1. Evaluate whether a local fire department should require residents to evacuate a
particular area when a wildfire is burning nearby
2. Predict whether an article on a particular topic will be popular with readers based on
data about searches and social shares for related topics
3. Adjust a worker training program in real-time based on how the worker is responding to
each lesson
Reference

1. Winston, W. (2016). Microsoft Excel data analysis and business modeling. Microsoft
press.
2. Knaflic, C. N. (2015). Storytelling with data: A data visualization guide for business
professionals. John Wiley & Sons.
Thank you for your attention!

Discussion
THANK YOU

For queries
Email: [email protected]

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