Business Analytics

PROF. BHAGYASHRI AMBUSKAR

 Analytics

 It means to examine or summarize to using statistical tools.

Collect organise Analyse Interpret

Analytics

 Analytics means using data and information to understand what has

happened, why it happened, and to make better decisions in the future. It's
about finding patterns and insights to improve actions and outcomes.
 Analytics is the process to using the statistical tools to improve the business
decision.
 Analytics is transforming data assets into competitive insights, that will
drive business decisions and actions, using people, processes, and
technologies
 Business Analytics

 The process by which business used statistical method and technologies for analysing
historical data to gain new insights and improve strategic decision making.
 Combination of
 Skills
 Technologies
 Practices
 It is used to examine an organizations data and make data driven decisions in future
using statistical analysis.
 Tools to used:

 Data Management
 Data Visualization
 Predictive Modelling
 Data Mining
 Forecasting simulation
 Optimization
 Types of Business Analytics
Descriptive Analytics : what happened
• Describe or summarize previous or present data.

Diagnostic Analytics : why did it happen

• Examine your Data

Predictive Analytics: what could happen

• Prediction of your data

Prescriptive Analytics : what should we do

• Future Planning
Descriptive Analytics

 Itssummarizes and describes data trends, patterns and

key information.
 Itgives clear picture of what has happened in past and
current scenario.
 Ithelps businesses summarize important information, like
sales numbers or customer feedback.
 Descriptive analytics is the simplest type of analytics and
the foundation the other types are built on.
 Itallows you to pull trends from raw data describe what
happened or is currently happening.
Examples:
 Retail Sales Reports
 Website Traffic Analysis
 Customer Feedback
 Social Media Insights
Diagnostic Analytics

 Diagnostic analytics is a data analysis technique that

examines past data to understand why certain events
occurred.
 Diagnostic analytics can help businesses make data-driven
decisions and better plan for the future
 Diagnostic analytics examines data to understand the root
causes of events, behaviors, and outcomes.
 It also helps to spot trends and explain customer behavior.
Using diagnostic analytics can inform a company's future
decisions, based on hard evidence, to improve business
performance and increase sales.
 It gives more critical look into past and present of business.
 It helps to understand why the issues have occurred and all
reason behind it.
Techniques

Data Mining

Data Discovery drill-down

Coorelations
Examples

 Healthcare: hospitals use diagnostic analytics to identify the root

causes of patient readmissions. By analyzing patient records,
treatment histories, and discharge protocols, they can determine
patterns leading to readmissions and improve care strategies.
 Retail: Retailers analyze sales data to understand why certain
products didn’t perform as expected. By examining factors like
seasonality, pricing changes, and marketing efforts, they can
identify the reasons behind declining sales and adjust their
strategies.
 Manufacturing: A manufacturing company might use diagnostic analytics to investigate
production delays. By analyzing machine performance data, maintenance logs, and supply
chain issues, they can pinpoint causes and implement solutions to optimize operations.
 Finance: Financial institutions analyze transaction data to understand spikes in fraudulent
activity. By looking at patterns in transactions, they can identify vulnerabilities and
enhance their fraud detection systems.
 Marketing: Marketers assess campaign performance to determine why a specific
campaign didn’t meet its goals. By analyzing customer engagement metrics, demographic
data, and external factors, they can understand the campaign's shortcomings and adjust
future strategies.
 Transportation: Public transportation systems analyze ridership data to
understand why certain routes are underperforming. By evaluating factors
like service frequency, reliability, and demographic changes, they can
make adjustments to improve usage.
 Telecommunications: Companies may investigate customer churn by
analyzing usage patterns and customer feedback. Understanding why
customers leave helps them improve service and retain subscribers.
Predictive Analytics

 Predictiveanalytics is a process that uses data analysis,

machine learning, and other techniques to forecast future
outcomes
 Predictiveanalytics is a process that uses data analysis,
machine learning, and other techniques to forecast future
outcomes
 Gives a look at what is going to happened.
 The process uses data analysis, machine learning, artificial
intelligence, and statistical models to find patterns that might
predict future behavior.
 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.
 Healthcare: Hospitals use predictive analytics to identify patients at risk for
diseases or complications. By analyzing patient data, they can predict who
may develop conditions like diabetes or heart disease and implement
preventive measures.
 Retail: Retailers predict customer buying behavior to optimize inventory and
personalize marketing efforts. For example, by analyzing past purchase data,
they can forecast which products are likely to be popular during specific
seasons or promotions.
 Finance: Banks use predictive analytics to assess credit risk. By analyzing
applicants’ financial histories and behaviors, they can predict the likelihood of
default and make informed lending decisions.
 Marketing: Companies employ predictive analytics to target customers with the
right offers. By analyzing customer data, they can identify segments that are
likely to respond to specific campaigns, increasing conversion rates.
 Manufacturing: Predictive maintenance uses analytics to forecast equipment
failures. By analyzing machinery data, companies can predict when maintenance
is needed, reducing downtime and costs.
Prescriptive Analytics

 Prescriptive analytics is a data analytics technique that uses statistical

algorithms and machine learning to recommend the best course of action to
take in a given situation
 Prescriptive analytics is the use of advanced processes and tools to analyze
data and content to recommend the optimal course of action or strategy
moving forward.
 Prescriptive analytics is a form of data analytics that helps businesses make
better and more informed decisions
Examples

 Supply Chain Management: Companies use prescriptive analytics to optimize

inventory levels and logistics. For instance, retailers can determine the best times to
reorder stock and which suppliers to use to minimize costs while meeting demand.
 Healthcare Treatment Plans: In healthcare, prescriptive analytics can recommend
personalized treatment plans based on patient data, historical treatment outcomes,
and best practices, helping doctors make more informed decisions.
 Financial Services: Investment firms employ prescriptive analytics to recommend
portfolio adjustments. By analyzing market conditions, risk factors, and historical
performance, they can suggest optimal investment strategies for clients.
1. Energy Management: Utility companies utilize prescriptive analytics to
recommend energy usage strategies for customers. For example, they might suggest
optimal times to use appliances to reduce costs and energy consumption.
2. Transportation Routing: Logistics companies use prescriptive analytics to
determine the most efficient routes for delivery trucks. By analyzing traffic patterns,
weather conditions, and delivery schedules, they can optimize routes to save time
and fuel.
3. Human Resources: In HR, prescriptive analytics can help with talent management
by recommending hiring strategies or training programs based on employee
performance data and industry trends, aiding in workforce development.
Importance of Data in Business
Analytics

 Informed Decision-Making: Data provides a solid foundation for making informed

decisions. By analyzing historical and real-time data, businesses can identify trends,
understand customer behavior, and make strategic choices that align with their goals.
 Performance Measurement: Data allows companies to measure key performance indicators
(KPIs) and assess their performance over time. This helps in identifying areas for
improvement and recognizing successful strategies.
 Customer Insights: Analyzing customer data helps businesses understand their preferences,
needs, and purchasing behaviors. This insight enables personalized marketing, better product
development, and improved customer service.
 Risk Management: Data analytics can identify potential risks and provide
insights into mitigating them. By analyzing patterns and anomalies, businesses
can anticipate challenges and respond proactively.
 Operational Efficiency: Data helps in optimizing operations by identifying
inefficiencies and bottlenecks. Through process analysis, businesses can
streamline operations and reduce costs.
 Competitive Advantage: Organizations that effectively leverage data can gain a
competitive edge. By utilizing data-driven insights, businesses can innovate faster
and respond to market changes more effectively.
 Forecasting and Planning: Predictive analytics uses historical
data to forecast future trends and outcomes. This assists in strategic
planning, resource allocation, and inventory management.
 Enhanced Collaboration: Data-driven cultures promote
collaboration across departments. When everyone works with the
same data, it fosters better communication and alignment on goals.
Data

Data is raw information that can be collected and analyzed. It comes

in various forms, such as numerical, categorical, text, temporal, and
spatial. Data is essential for making informed decisions,
understanding trends, and driving actions in business and other fields.
Examples

 Sales Data: Daily or monthly sales figures from a retail store, showing the
number of products sold
 Weather Data: Temperature, humidity, and precipitation measurements
collected from weather stations.
 Healthcare Records: Patient information, including medical history,
diagnoses, and treatment outcomes.
 Social Media Metrics: Likes, shares, and comments on posts, providing
insights into engagement.
Information

 Information is processed data that has been organized or structured in

a way that makes it meaningful and useful. It provides context and
relevance, allowing individuals or organizations to understand and
make decisions based on the data.
Examples

 Financial Reports: Quarterly earnings reports from a company that

summarize revenue, expenses, and profits.
 Health Records: Patient summaries that include diagnoses, treatment
plans, and medication history, providing insights for healthcare providers.
 Academic Grades: Report cards that present a student's performance
across different subjects, helping educators and parents understand areas
of strength and improvement.
Data Collection Methods

 Data collection methods are techniques and procedures for gathering

information for research purposes.
 Some common data collection methods include
1. Surveys
2. Interviews
3. Observations
4. Focus groups
5. Experiments
 • Statistical method
Primary • Surveys
Data • Interview
Collectio
• Polls
n
• Focus group

• Financial Reports
Secondar • Sales Report
y Data • Mission
Collectio
• Vision
n
• internet
Primary Data Collection Method

 It is collected from first-hand experience and is not used in the past.

The data gathered by primary data collection methods are highly
accurate and specific to the research’s motive.
 Primary data collection methods can be divided into two categories:
1. Quantitative
2. Qualitative
1. Quantitative Method

 Quantitative techniques for market research and demand forecasting usually use
statistical tools. In these techniques, demand is forecasted based on historical data. These
methods of primary data collection are generally used to make long-term forecasts.
Statistical analysis methods are highly reliable as subjectivity is minimal.
1. Time Series Analysis: A time series refers to a sequential order of values of a variable, known
as a trend, at equal time intervals. Using patterns, an organization can predict the demand for its
products and services over a projected time period.
2. Smoothing Techniques: Smoothing techniques can be used in cases where the time series lacks
significant trends. They eliminate random variation from the historical demand, helping identify
patterns and demand levels to estimate future demand.
The most common methods used in smoothing demand forecasting are the simple moving
average and weighted moving average methods.
3. Barometric Method: Also known as the leading indicators approach, researchers use this
method to speculate future trends based on current developments. When past events are
considered to predict future events, they act as leading indicators.
2. Qualitative Method
 It is closely associated with words, sounds, feelings, emotions, colors,
and non-quantifiable elements. These techniques are based on
experience, judgment, intuition, conjecture, emotion, etc.
 Quantitative methods do not provide the motive behind participants’
responses, often don’t reach underrepresented populations, and require
long periods of time to collect the data. Hence, it is best to combine
quantitative methods with qualitative methods.
1. Surveys
2. Polls
3. Interviews
4. Focus groups
5. Questionnaire