Unit-6-Business Analytics

Data, Information, Knowledge, Intelligence

 Data are individual observations.
 Information is a useful collection of data.
 Intelligence combines information to form a predictive narrative that enables better decision-making.
Data, Information, Knowledge,
Intelligence
• In summary, data serves as the foundation, information provides
context, knowledge represents the insights drawn from information,
and intelligence involves the application of that knowledge in practical
scenarios. This hierarchy reflects the increasing value derived from
raw inputs as they are processed into actionable insights.
 Analytics, Data analytics and Business analytics

• Analytics is the systematic computational analysis of data to uncover patterns, trends,

and insights. It encompasses a wide range of techniques and tools for collecting,
processing, and analyzing data to inform decision-making.
• Data Analytics specifically refers to the process of examining datasets to conclude about
the information they contain. It encompasses various tools and techniques for cleaning,
transforming, and modeling data to discover useful information that can assist decision-
making. Data analytics can be performed on structured (e.g., databases, spreadsheets) and
unstructured data (e.g., text, videos).
• Business analytics is focused on analyzing various types of information to make
practical, data-driven business decisions, and implementing changes based on those
decisions.
• Business Analytics (BA) is a subset of data analytics focused specifically on analyzing
business data to inform strategic and tactical business decisions. It involves:
• Business Analytics has become an integral part of business operations
and performance management.
• Businesses and corporations who wish to gain a competitive edge in
the market during modern times must employ the services of skilled
business analysts to do so.
• Without utilizing data effectively and without a dedicated analytics
team, companies will not be able to sustain themselves in this world
Benefits of Data Analytics
• informed Decision-Making: Data analytics provides organizations with insights drawn from
data, allowing for more informed and objective decision-making. It reduces reliance on gut
feelings or assumptions.

• Improved Efficiency: By identifying trends and inefficiencies, organizations can streamline

their operations, optimize processes, and make adjustments that lead to cost savings and
improved performance.

• Enhanced Customer Insights: Data analytics enables businesses to better understand customer
preferences, behaviors, and trends. This knowledge can help tailor products, services, and
marketing strategies to meet customer needs more effectively.

• Predictive Analysis: Through predictive analytics, organizations can forecast future trends,
behaviors, and outcomes. This can be particularly useful in areas like inventory management,
 Benefits of Data Analytics
• Competitive Advantage: Companies that effectively utilize data analytics can gain
insights that give them an edge over competitors, such as identifying market opportunities
or understanding consumer behavior more deeply.

• Risk Management: Data analytics helps organizations identify potential risks and
vulnerabilities by analyzing patterns and historical data. This proactive approach can lead
to better risk mitigation strategies.

• Personalization: In sectors like retail and marketing, data analytics allows for the creation
of highly personalized experiences for customers, increasing engagement and loyalty.

• Performance Measurement: Organizations can track and analyze their performance

metrics in real-time, allowing for timely adjustments and improvements in strategies and
operations.
 Benefits of Data Analytics
• Enhanced Collaboration: By making data-driven insights accessible across
departments, organizations can foster collaboration and ensure that everyone
is working towards the same goals based on solid evidence.
• Better Supply Chain Management: Data analytics can optimize supply chain
operations by predicting demand more accurately, reducing waste, and
improving logistics.
• Healthcare Improvements: In healthcare, data analytics helps in patient care,
resource management, and predictive analytics for disease outbreaks, leading
to better outcomes and efficient healthcare delivery.
• Employee Productivity: Organizations can use data analytics to monitor
employee performance, identify areas for improvement, and enhance
workforce productivity.
 Benefits of Data Analytics
• According to The Global State of Enterprise Analytics (pdf) report by
business intelligence company MicroStrategy, 56 percent of respondents
said data analytics led to “faster, more effective decision-making” at their
companies.
• Other benefits cited include:
• Improved efficiency and productivity (64 percent)
• Better financial performance (51 percent)
• Identification and creation of new product and service revenue (46 percent)
• Improved customer acquisition and retention (46 percent)
• Improved customer experiences (44 percent)
• Competitive advantage (43 percent)
Descriptive, Predictive and
Prescriptive: Three Types of
Business Analytics
Descriptive analytics are often displayed using visual data representations like line, bar and
pie charts and, although they give useful insights on its own, often act as a foundation for
future analysis. Because descriptive analytics uses fairly simple analysis techniques, any
findings should be easy for the wider business audience to understand.

Predictive analytics is a more advanced method of data analysis that uses probabilities to
make assessments of what could happen in the future. Like descriptive analytics, prescriptive
analytics uses data mining – however it also uses statistical modelling and machine learning
techniques to identify the likelihood of future outcomes based on historical data.

Although closely related to both descriptive and predictive analytics, prescriptive

analytics emphasizes actionable insights instead of data monitoring. This is achieved through
gathering data from a range of descriptive and predictive sources and applying them to the
decision-making process.
 Descriptive, Predictive and
Prescriptive

• Descriptive analytics tells you what happened,

• predictive analytics tells you what could happen,
• and prescriptive analytics tells you what you should
do.
• Together, these three forms of analytics provide a
comprehensive approach to data analysis, enabling
organizations to make informed decisions, anticipate
future situations, and take proactive measures.
Evolution of Business Analytics
 Evolution of Business Analytics
• Early Data Reporting (Pre-1970s):
• Manual Reporting: Businesses relied on manual data collection and
reporting, often done through paper-based methods. Calculating
performance metrics was labor-intensive and prone to errors.
• Basic Mathematical Tools: Simple statistical tools and spreadsheets began
to be used for calculations, but analytics were mostly descriptive.
• Descriptive Analytics (1970s-1980s):
• Data Warehousing: The introduction of data warehousing allowed
organizations to consolidate data from different sources, making analysis
easier and more comprehensive.
 Evolution of Business Analytics
• Diagnostic Analytics (1990s):
• In-depth Analysis: Focus shifted from merely reporting data to understanding
why events happened. This era saw the development of more advanced
statistical models.
• Predictive Analytics (2000s):
• Statistical Modeling and Machine Learning: The advent of more sophisticated
machine learning algorithms allowed businesses to predict future outcomes
based on historical data.
• Prescriptive Analytics (2010s):Cloud Computing: The rise of cloud
technologies transformed how data was stored, analyzed, and shared,
enabling businesses of all sizes to leverage advanced analytics.
 Evolution of Business Analytics
• Cognitive and Automated Analytics (2020s and Beyond):
• Artificial Intelligence and Machine Learning: Advanced AI techniques are
now used to automate decision-making processes and simulate outcomes.
• Future Trends:
• Augmented Analytics: Combining AI with traditional analytics to automate
data preparation and insights generation.
• Edge Analytics: Analyzing data closer to the source (e.g., IoT devices) to
reduce latency and improve decision-making speed.
• Integration of Blockchain for Data Integrity: Leveraging blockchain
technology to ensure data integrity and transparency in analytics
processes.
Business Analytics Process
 Business Analytics Process
• Define Objectives:
Identify the key business questions or problems you want to solve.
Set clear objectives for what you hope to achieve with the analysis.
• Data Collection:
Gather relevant data from various sources, such as internal databases, external
datasets, surveys, or web analytics.
• Data Preparation:
Clean and preprocess the data, addressing any missing values, duplicates, or
outliers.
Data Exploration:
Conduct exploratory data analysis (EDA) to understand the data's characteristics
 Business Analytics Process
• Modeling:
Choose appropriate analytical techniques and models based on the
business objectives (e.g., predictive analytics, prescriptive analytics,
descriptive analytics).
Analysis:
Apply the chosen models to the data to derive insights and make
predictions.
Visualization and Reporting:
Create visualizations, dashboards, and reports to present the analysis
results in an understandable way.
 Business Analytics Process
• Decision Making:
Share the findings with decision-makers and stakeholders.

Implementation:
Collaborate with relevant teams to implement changes based on the analytics
findings.

Monitoring and Evaluation:

Track the outcomes of the implemented changes to assess their impact on the
business.
 What is business intelligence architecture (BI
architecture)

• A business intelligence architecture

is a framework for the various
technologies an organization
deploys to run business intelligence
and analytics applications. It
includes the IT systems and
software tools that are used to
collect, integrate, store and analyze
BI data and then present
information on business operations
and trends to corporate executives
and other business users.
Business Analytics Architectures
and Framework
 Analytics in Business Support
Functions
• Human Resources
• Talent Acquisition: Analyzing recruitment data to identify the most effective
channels for sourcing talent and predicting the success of candidates based on
historical performance.
• Employee Engagement: Using surveys and sentiment analysis to gauge employee
satisfaction and engagement levels, offering insights into turnover risks and areas
for improvement.
• Finance
• Budgeting and Forecasting: Analyzing historical financial data to create more
accurate revenue forecasts and assist in budgeting processes.
• Cost Reduction: Identifying trends and patterns in spending to pinpoint areas for
cost reduction and better resource allocation.
Analytics in Business Support
Functions
• Customer Service
• Customer Insights: Analyzing customer data to understand preferences,
behaviors, and pain points, allowing for more personalized service and
communication.
• Marketing
• Campaign Effectiveness: Analyzing data from marketing campaigns to
understand which strategies yield the best ROI and engagement levels.
• Segmentation and Targeting: Using customer data to segment audiences
more effectively and deliver personalized marketing messages.
Application of
Business
Analytics in
Business
Support
Function
 Importance of Data Analytics in Industries
• Today, data analytics is crucial to almost every business. It enables companies to
derive insights from the vast amounts of data they amass to enhance operations, make
better decisions, and gain a competitive edge. Here are some ways data analytics
company is important in different industries:
• Retail – It helps understand customer behavior, recommend products, optimize pricing,
reduce fraud, and improve supply chain management.
• Healthcare – It helps improve diagnosis, detect outbreaks, optimize care plans, reduce
readmissions and fraud, and discover new treatments.
• Banking and Finance – It helps detect fraud, reduce risks, customize offerings, improve
customer engagement, and anticipate market trends.
• Transportation – It also helps optimize fleet management, route planning, predict
demand, improve traffic flows, and reduce costs.
• Manufacturing – Data analytics experts help improve productivity, optimize processes,
predict equipment failures, customize products, and reduce defects and waste.
• Telecommunications – It helps improve customer service, optimize networks, reduce
churn, detect anomalies, and combat fraud and security threats.
• Energy – It also helps optimize power generation and distribution, predict demand,
reduce costs, detect anomalies, improve efficiency, and detect equipment issues.
 Importance of Data Analytics in
Industries
• Informed Decision-Making
• Data-Driven Insights: Data analytics transforms raw data into meaningful insights that can guide strategic
decisions
• Operational Efficiency
• Process Optimization: By analyzing data related to operations, companies can identify inefficiencies and
streamline processes to reduce costs and improve performance.
• Enhanced Customer Experience
• Personalization: Data analytics helps in understanding customer preferences and behaviors, enabling
businesses to tailor their products and services accordingly.
• Competitive Advantage
• Market Insights: Data analytics provides insights into market trends, competitor performance, and
customer demands, allowing businesses to stay ahead of the competition.
• Innovation: Analyzing data can lead to new product development or service enhancements, driving
innovation within the industry.
 Sports Analytics

• Sports analytics is the process of plugging

statistics into mathematical models to predict the
outcome of a given play or game. Coaches rely on
analytics to watch opponents and optimize play
calls in games, while front offices use it to
prioritize player development. Analytics also play
a major role off the field, providing fans with both
sports betting and fantasy sports insights.
 Applications of Sports Analytics
• Player Evaluation and Scouting: Analysts study metrics and performance data to assess potential recruits and
existing players. This can include advanced statistics like WAR (Wins Above Replacement) in baseball or PER
(Player Efficiency Rating) in basketball.

• In-Game Strategy: Teams use analytics to inform coaching decisions during games, such as when to take timeouts,
go for it on fourth down, or adjust formations.

• Injury Prevention: Data from wearables can help monitor players' physical conditions and fatigue levels, allowing
coaches to manage workloads and reduce the risk of injury.

• Fan Engagement: Analytics can improve the fan experience through targeted marketing, personalized content, and
enhancing game-day experiences.

• Performance Optimization: Teams analyze practice sessions and game footage to identify strengths and
weaknesses, helping players improve their skills.

• Business Decisions: Beyond on-field performance, analytics is used for ticket sales forecasting, pricing strategies,
Social Media Analytics
 Social Media Analytics
• Social media analytics refers to the
process of gathering, analyzing,
and interpreting data from social
media platforms to understand
user behavior, engagement, and
the effectiveness of social media
strategies. This analysis helps
businesses and organizations make
data-driven decisions, improve
their social media presence, and
tailor their marketing efforts.
 Key Components of Social Media Analytics
• Data Collection:
• Platforms: Data can be collected from platforms like Facebook, Twitter, Instagram,
LinkedIn, TikTok, and more.
• Tools: Use of various tools and software (e.g., Google Analytics, Hootsuite, Sprout
Social, Buffer) to gather metrics.
• Key Metrics:
• Engagement: Likes, shares, comments, retweets, mentions, and overall interaction rates.
• Reach and Impressions: Number of unique users who see the content (reach) versus the
total number of times the content is displayed (impressions).
• Follower Growth: Tracking the increase or decrease in followers over time.
• Traffic Generation: Number of visitors driven to a website from social media sources.
• Conversion Rates: Percentage of social media users completing desired actions, like
signing up or making a purchase.
Key Components of Social Media Analytics
• Audience Analysis:
Demographics: Insights into the age, gender, location, and preferences
of the audience.
• Sentiment Analysis: Understanding audience sentiment (positive,
negative, neutral) towards the brand or content.
• Competitor Analysis:
Monitoring competitors’ social media strategies and performance.
Identifying industry trends and benchmarking against competitors.
Social Network Analytics