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Lesson 2 Business Analytics Framework

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Lesson 2 Business Analytics Framework

Uploaded by

Alona Magante
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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• LESSON 2:

BUSINESS
ANALYTICS
FRAMEWORK
ITPFL7 BUSINESS ANALYTICS
“Whether you think you can, or
you think you can't--you're
right.”

― HENRY FORD
Recap

Business Analytics – an art of assembling the data


gathered through Business Intelligence to produce
meaningful conclusions.
Big Data - refers to the sets of data whose size or type is
beyond the ability of traditional relational databases to
capture, manage, and process the data with low latency
Study Question

As an exercise, look on the web for examples of data


service providers. List them down. What sorts of
services do these big data providers sell to their
clients?
Example of data and software service providers

•Slack, a communication platform


•DropBox, a storage platform
•Salesforce, a customer relationship management
(CRM) service and software
•G Suite, a suite of apps like Google Drive, Gmail, and
Google Docs
•Zoom, a video conferencing tool
Framework for Business Analytics

The process of turning raw data into business action is the framework for Business Analytics.
There are 3 steps in turning data into analytics which are Data Extraction, Data Warehousing,
and the Extract, Transform, or Load Processes (ETL).
Framework for Business Analytics

1. Data extraction. This is the first step in turning data into analytics. There are at least 3 sources
of data which are the source systems, raw transactions, and documents and forms.

2. Data warehousing. This is where the data is cleaned, curated, organized, and ready for
analysis.

3. Extract, Transform, or Load Processes (ETL). This is the process of moving data from source
systems to data warehouses to an analytical tool.
Types of Analytics

There are three types of analytics that can help businesses make the most out of the big data that
they have and find the solutions to problems that they have: descriptive, predictive and
prescriptive.

1. Descriptive Analytics. This is the data that is used to benchmark or to profile.

2. Predictive Analytics. This is used to determine relationships between two different types of
data and make predictions about future data.

3. Prescriptive Analytics. This is used to create recommendations through simulation and


optimization models.
Activity

• Watch "Descriptive Analytics" by Mr. Dominic Ligot

• Watch "Predictive Analytics" by Mr. Dominic Ligot

• Watch "Prescriptive Analytics" by Mr. Dominic Ligot


Group work
Divide yourselves into 4 groups
Each group will be assigned with video to be
discussed next meeting.
Videos will be played in today’s class.
Discussion guide
Definition

Approaches

Statistical methodology used

Model Tools

Summary
Study Question

Compare and differentiate descriptive, predictive, and prescriptive analytics.

Types of analytics Similarities Differences


Descriptive
Predictive
Prescriptive
Descriptive analysis
◦ It aids in analyzing data for better insights
◦ Present data as it is
◦ Answers question: “How the things look today”
Approaches/methodology
Approaches/methodology

1.Cross-tabulation – Cross-tabulation (crosstab) is a useful analysis tool


commonly used to compare the results for one or more variables with the
results of another variable. It is used with data on a nominal scale, where
variables are named or labeled with no specific order. Cross-tabulation is
especially useful for studying market research or survey responses.

2.Hypothesis/Inference - Hypothesis testing is a form of statistical inference


that uses data from a sample to draw conclusions about a population
parameter or a population probability distribution. First, a tentative
assumption is made about the parameter or distribution. Sample: T-test

3.Data Visualization – Data visualization is the representation of data through


the use of common graphics, such as charts, plots, infographics, and even
Types of Data Visualization
charts (time),
stacked area (composition),
Heat map (relative weight),
histogram-A histogram is a graph used to represent the frequency
distribution of a few data points of one variable.,
scatter plot (relationship between 2 variables)
Common Tools Use
Spreadsheets - A spreadsheet is a simple tool that helps you
create, organize, and analyze data. From simple computations to
automatic data analysis, spreadsheets can help you with a lot of your
everyday tasks!
BI – Business intelligence (BI) is software that ingests business data
and presents it in user-friendly views such as reports, dashboards,
charts, and graphs.
Customize data visualization - for problems that are too complex
for excel to do. Use heavy statistical computing
Predictive Analytics
 Concerns with modeling the relationship between predictors and
outcomes
 Testing the accuracy of the sample data
 Predictions are generated by feeding a new set of data
Approaches used
Statistical Analysis
Train Model
Test Model
Output model components
Output predictions
Statistical Analysis
Foundation of predictive analytics
Common statistical method samples are regression, decision trees and
neural networks
Train Model
Applying a statistical model to determine the relationship
between predictors and outcomes.
Test model for accuracy
The shape of the trend line is the relationship that is modeled by
the algorithm.
Test Model
Test for errors using a measure R2 and a graph
Check how far or how close was it to the historical data it is being
trained on
Output model and predictions
The relationship generated from a statistical model.
Predictions are generated by substituting new values of the test
data.
Prescriptive Analytics
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. Simply put, it seeks
to answer the question, “What should we do?”
Prescriptive analytics affords
organizations the ability to:
•Effortlessly map the path to success.

•Inform real-time and long-term business operations.

•Spend less time thinking and more time doing.

•Reduce human error or bias.


6 Examples of Prescriptive Analytics in
Action
•Venture Capital: Investment Decisions.
•Sales: Lead Scoring.
•Content Curation: Algorithmic Recommendations.
•Banking: Fraud Detection.
•Product Management: Development and Improvement.
•Marketing: Email Automation.
There are three types of analytics that businesses use to
drive their decision-making; descriptive analytics, which
tells us what has already happened; predictive analytics,
which shows us what could happen, and finally, prescriptive
analytics, which inform us what should happen in the
future.
Prescriptive analytics is the natural progression from descriptive and
predictive analytics procedures. It goes a step further to remove the
guesswork out of data analytics. It also saves data scientists and
marketers time in trying to understand what their data means and what
dots can be connected to deliver a highly personalized and propitious
user experience to their audiences.
Prepare for a quiz next meeting..

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