Data analytics

K.Koteswari
P. Preetha
Introduction:

Data: Data is a set of values of qualitative or

quantitative variables. It is information in raw or

unorganized form. It may be a fact, figure, characters,
symbols etc. Data can be numbers, like the record of
daily weather, or daily sales. Data can be
alphanumeric, such as the names of employees and
customers.
Information- Meaningful or organized data is

information, comes from analyzing data.

 Data base: A database is a modeled collection of data
that is accessible in many ways. A data model can be
designed to integrate the operational data of the
organization. The data model abstracts the key entities
involved in an action and their relationships. Most
databases today follow the relational data model and its
variants.
 Take the example of a sales organization. A data model
for managing customer orders will involve data about
customers, orders, products, and their
interrelationships. The relationship between the
customers and orders would be such that one customer
can place many orders, but one order will be placed by
one and only one customer. It is called a one-to-many
relationship. The relationship between orders and
Data Warehouse:
 A data warehouse is an organized store of data from all over

the organization, specially designed to help make

management decisions. Data can be extracted from
operational database to answer a particular set of queries.
This data, combined with other data, can be rolled up to a
consistent granularity and uploaded to a separate data store
called the data warehouse. Therefore, the data warehouse is
a simpler version of the operational data base, with the
purpose of addressing reporting and decision-making needs
only.
Data Mining :
 Data Mining is the art and science of discovering useful

innovative patterns from data. There is a wide variety of

patterns that can be found in the data.
Evolution of Data Analytics
Why Data Analytics?
 Organizations today handle and store billions of rows of data,

possibly with millions of combinations. Data Analytics has

been hailed as the ‘Game Changer’, because businesses
could transform the raw data into something actionable,
which improved their profits. One of the first applications of
analytics were found in the field of marketing, sales and
customer relationship management.
 Once the firms had analyzed the data, they found plethora

of information ranging from insights into the customer’s

needs to consumer behavior to understanding the demand
for products/ services.
Evolution of Analytics:
1. Analytics era 1.0:
 The first era is also known as the era of ‘Business

Intelligence’. Analytics 1.0 was a time of real progress in

gaining an objective, deep understanding of important
business phenomena and giving managers the fact-based
comprehension to go beyond intuition when making decisions.
 For the first time, data about production processes, sales,

customer interactions, and more were recorded, aggregated,

and analyzed. Data sets were small enough in volume and
static enough in velocity to be segregated in warehouses for
analysis.
 However, readying a data set for inclusion in a warehouse was

difficult. Analysts spent much of their time preparing data for

analysis.
 Analytics era 2.0 : Also known as the era of
‘Big Data’. The analytics 1.0 era lasted until the
mid- 2000’s and as analytics entered the 2.0
phase, the need for powerful new tools and the
opportunity to profit by providing them quickly
became apparent. Companies rushed to build
new capabilities and acquire new customers.
 Example: LinkedIn, created numerous data

products, including People You May Know, Jobs

You May Be Interested In, Groups You May Like,
Companies You May Want to Follow, Network
Updates, and Skills and Expertise and to do so,
it built a strong infrastructure and hired smart,
 Innovative technologies of many kinds had to be created,
acquired, and mastered in this era.
 Big data could not fit or be analyzed fast enough on a single
server, so it was processed with Hadoop, an open source software
framework for fast batch data processing across parallel servers.
 To deal with relatively unstructured data, companies turned to a
new class of databases known as NoSQL.
 Much information was stored and analyzed in public or private
cloud-computing environments.
 Machine-learning methods (semi-automated model development
and testing) were used to rapidly generate models from the fast-
moving data.
 The competencies/ skills thus required for Analytics 2.0 were
quite different from those needed for 1.0.
 The next-generation quantitative analysts were called data
scientists, and they possessed both computational and analytical
skills.
Analytics era 3.0:
 Like the first two eras of analytics, this one brings new

challenges and opportunities, both for the companies that

want to compete on analytics and for the vendors that supply
the data and tools with which to do so.
 High-performing companies will embed analytics directly into

decision and operational processes, and take advantage of

machine-learning and other technologies to generate insights
in the millions per second rather than an “insight a week or
month.”
 Data architectures (i.e., Hadoop) will augment the traditional

approaches removing scale barriers. Analytics truly becomes

the competitive differentiator for enterprises who capitalize on
the possibilities of this new era (International institute for
analytics, 2015).
 The pictorial representation of the
evolution of Data Analytics:
 The pictorial representation of the evolution of Data Analytics
shows that the concept of Data Analytics started in the early
1980s.
 In 1980’s the Data Analytics is used in such a way that only
reporting is used to happen.
 That means what is happening with the data being obtained.
 After this type of Data Analytic modeling, the Data Analytic is
being moved into the second phase that is with early 1990’s
more of Analysis (Analytics) came into existence.
 In this period, it focuses on “why did it happen” to the data.
 Then in 2000 onwards, the Monitoring of data happens. The
dashboards and the scoreboards are being used for the same.
 With this type of analysis, a clear idea of what’s happening to
the data is being understood.
 Then after 2010 onwards, the Prediction with the data
and the data inputs being implemented with.
 That means, what will happen with the data is the main
question being asked in the period after 2010.
 The different methods of statistics, data mining and the
optimization is being used in this period.
 Now we are in the era with the more detailed data
analytics and that is of nature Prescriptive.
 In this period we are training our machines to be
smarter and focusing on the computations to happen
with less time and less efforts.
 So we can conclude that we are in the period with more
of AI.
Data analytics
What is Analytics?
 Analytics is the use of tools and processes to combine and examine
sets of data to identify patterns, relationships and trends.
 The goal of analytics is to answer specific questions, discover new
insights, and help organizations make better, data-driven
decisions.

Data analytics: Data analytics is the knowledge of investigating

raw data with the intention of deriving solution for a specified
problem analysis.
 Nowadays analytics has been used by many corporate, industries

and institutions for making exact decision at various levels.

 The mechanism of drawing solutions during analysis of large

datasets with the intention of determining hidden patterns and its

relationship.
 Analytics differs from mining with the mechanism of determining

the new patterns, scope, techniques and its purpose.

Definition of Data Analytics
 Data Analytics is the process of exploring and

analyzing large datasets to find hidden

patterns, unseen trends, discover Correlations
and valuable insights.
 Data is collected and organized, then analysis is

performed, and insights are generated as follows:

 Data = a collection of facts.

Analytics = organizing and examining data.

Insights = discovering patterns in data.
Data insights that:
 Optimize processes to improve performance.

 Uncover new markets, products or services to add new

sources of revenue.
 Better balance risk vs. reward to reduce loss.

 Deepen the understanding of customers to increase loyalty

and lifetime value.

Campaign Optimization Example
 A marketing team can collect data of different email

campaigns and use data analytics to gain insights on which

one resonates best with their customers. The marketing
dashboard below provides an in-depth view of the conversion
funnel for email campaigns.
 The data insight in this case is that the “Bend the Trend”

campaign has the highest enrollment rate, which is the

primary key performance indicator for this team.
Why Data Analytics?
 Competitive advantage.
 Removes inefficiency in the system/organization.
 Provides ability to make better decisions.
Ex: Problems faced by Flip kart
 Forecast demand for each SKU.
 SKU forecasting predicts the demand for specific

products in a company's inventory. The process

analyzes data, such as past sales and consumer
trends, to help businesses predict future product
demand and keep optimum amounts of stock on
hand without overpaying for storage space.
 Predict customer cancellations and returns.
 Predict customer contacts at the customer service.
 Predict what a customer is likely to purchase in

future?
 How to optimize the delivery system?
Primary Focus Areas for Analytics
Understanding Customer Behavior :
 Understanding customer behavior has always been a challenge for

organizations.
 Customer behavior analytics is the process of collecting, analyzing, and

interpreting data about customers' interactions with a company to

understand and predict their behavior.
 The information from this process is used to improve the entire

customer journey, increase sales, and optimize marketing efforts.

 Understanding customer behavior is crucial for businesses to
make informed decisions(can help you have confidence that you're
choosing the right option.), improve customer satisfaction, and
increase revenue.
Understanding product usage:
 Product usage is the data that represents how and when your

customers are using your product. Product usage data is a crucial

resource for any business, as it can help you understand your consumer
better. These insights can help you make better business decisions and
optimize your marketing campaigns.
Increases operational efficiency:
 Data analytics is a powerful tool for improving

operational efficiency. By identifying

inefficiencies, improving forecasting, optimizing
resource allocation, and providing real-time
monitoring, businesses can improve their
processes and reduce costs.
Business Model Innovation :
 By using artificial intelligence and data analytics

tools, organizations can predict customer

needs, identify market trends, and create
innovative strategies for success.
THE APPLICATIONS OF DATA ANALYTICS

 The major industries that are implementing

advanced analytical technologies include –
 Business analytics
 Retail
 Healthcare
 Media and Entertainment
 Banking
 Transportation
Business Intelligence (BI):
 Data analytics helps organizations make data-driven decisions by analyzing

historical and current data. It involves creating reports, dashboards, and

visualizations to monitor key performance indicators (KPIs) and gain insights
into business operations.
BI systems gather data from various sources, transform it into
meaningful insights, and present it in the form of reports, dashboards,
and visualizations. The primary goal of BI is to provide historical and
current data that aids in making informed business decisions.
Retail:
 Retailers use data analytics to understand their customer needs and buying
habits to predict trends, recommend new products and boost their business.
Marketing Analytics:
 Marketers use data analytics to understand customer behavior, segment

customers, and optimize marketing campaigns. This includes analyzing

website traffic, social media engagement, email marketing performance, and
more.
Financial Analytics:
 In finance, data analytics is used for risk assessment, fraud detection,

portfolio management, and algorithmic trading. It helps financial institutions

make informed decisions and manage their investments effectively.
Healthcare :
 Health care industries analyse patient data to provide lifesaving

diagnoses and treatment options. They also deal with healthcare

plans, insurance information to derive key insights.
 Data analytics can improve patient care by analyzing electronic

health records (EHRs), predicting disease outbreaks, identifying

trends in patient outcomes, and optimizing hospital operations.
Manufacturing:
 Using data analytics, manufacturing sectors can discover new cost

saving and revenue opportunities. They can solve complex supply

chain issues, labour constraints and equipment breakdowns.
Banking:
 Banking institutions gather and access large volumes of data to

derive analytical insights and make sound financial decisions.

They find out probable loan defaulters, customer churn out rate
and detect frauds in transactions.
Transportation and Logistics :
 Logistics Companies use data analytics to develop new

business models, optimize routes, improve productivity and

order processing Capabilities as well as performance
management. Data analytics plays a crucial role in optimizing
routes, managing transportation fleets, and reducing fuel
consumption in the transportation industry.
Manufacturing and Quality Control:
 Analytics is used to monitor manufacturing processes, identify

defects, and improve product quality. Predictive maintenance is

also common in this industry.
Sports Analytics:
 Sports teams and organizations use analytics to make

decisions about player performance, game strategies, and fan

engagement. This includes player statistics analysis, injury
prediction, and game simulations.
 Environmental Analysis: Data analytics can help monitor
and analyze environmental data, such as air and water
quality, climate change, and wildlife conservation efforts.

 Government and Public Policy: Government agencies

use data analytics to make informed policy decisions,
detect fraud and waste, and optimize public services.

 Education: Educational institutions use analytics to track

student performance, personalize learning experiences, and
improve educational outcomes.

 Social Media and Sentiment Analysis: Social media

platforms use data analytics to understand user sentiment,
trends, and engagement. Businesses use this information
for brand monitoring and reputation management.
Steps involved In Data analytics
1. understand the problem
 understand the business problem. Define the

organizational goals and plan for a lucrative solution.

2. Data collection:
 Gather the right data from various sources and other

information based on your priorities.

 Data analytics begins with the collection of data from

various sources, including databases, websites,

sensors, and more. Data can be structured (e.g.,
databases, spreadsheets) or unstructured (e.g., text,
images, social media posts).
3. Data Cleaning:
 Clean the data to remove unwanted, redundant

and missing values and make it ready for

analysis.
4. Data exploration and analysis:
 use data visualization and business intelligence

tools, data mining techniques and predictive

modeling to analyses data.
5. Interpret the Results:
Interpret the results to find out hidden patterns,
future trends, and gain insights.
Importance of Data Analytics life cycle
 Data analytics life cycle defines the roadmap of how the data is
generated, collected, processed, used, and analyzed to achieve
business goals.
 It offers a systematic way to manage data for converting it into
information that can be used to fulfill organization and project
goals.
 The process provides the direction and methods to extract
information from the data and proceed in the right direction to
accomplish business goals.
 Based on the newly received insights, they can decide whether to
proceed with their existing Research or scrap it and redo the
Complete analysis.
 The data Analytics life cycle guides them throughout this process.
Importance of Data Analytics life cycle
Data Analytics Lifecycle :
The Data analytic lifecycle is designed for Big Data problems and data
science projects.
Phase 1: Discovery –
 The data science team learn and investigate the problem.

 Develop context and understanding.

 Come to know about data sources needed and available for the project.

 The team formulates initial hypothesis that can be later tested with

data.
Phase 2: Data Preparation –
 Steps to explore, preprocess, and condition data prior to modeling and

analysis.
 It requires the presence of an analytic sandbox, the team execute, load,

and transform, to get data into the sandbox.

 Data preparation tasks are likely to be performed multiple times and

not in predefined order.

 Several tools commonly used for this phase are – Hadoop, Alpine Miner,

Open Refine, etc.

Phase 3: Model Planning –Team explores data to learn
about relationships between variables and subsequently,
selects key variables and the most suitable models.
 In this phase, data science team develop data sets for

training, testing, and production purposes.

 Team builds and executes models based on the work done

in the model planning phase.

 Several tools commonly used for this phase are – Matlab,

STASTICA.
Phase 4: Model Building –Team develops datasets for
testing, training, and production purposes.
 Team also considers whether its existing tools will suffice for

running the models or if they need more robust

environment for executing models.
 Free or open-source tools – Rand PL/R, Octave, WEKA.

 Commercial tools – Matlab , STASTICA.

Phase 5: Communication Results –
 After executing model team need to compare outcomes of modeling

to criteria established for success and failure.

 Team considers how best to articulate findings and outcomes to

various team members and stakeholders, taking into account

warning, assumptions.
 Team should identify key findings, quantify business value, and

develop narrative to summarize and convey findings to stakeholders.

Phase 6: Operationalize –
 The team communicates benefits of project more broadly and sets

up pilot project to deploy work in controlled way before broadening

the work to full enterprise of users.
 This approach enables team to learn about performance and related

constraints of the model in production environment on small scale ,

and make adjustments before full deployment.
 The team delivers final reports, briefings, codes.

 Free or open source tools – Octave, WEKA, SQL, MADlib.

TYPES OF DATA ANALYTICS
Analytics can be classified into four levels which help
the organizations to become mature in terms of
analytical proficiency.
1. Descriptive Analytics “what happened”
2. Diagnostic Analytics “Why did this happen”
3. Predictive Analytics “what might happen in the future”
4. Prescriptive Analytics “what should we do next”
1. Descriptive Analytics
 Descriptive Analytics : This is the simplest form of analytics, It
summarizes an organization's existing data to understand what
has happened in the past or is happening currently. It emphasizes
"what is going on in the business”.
 Descriptive analytics determines historical data to understand the
relationship between past events and the present conditions of the
organization.
 It is one of the most widely used analytical tools favored by
marketing, finance, sales, and operations teams, as it efficiently
looks into past data and provides an analysis of the changes by
comparing patterns and trends.
 Descriptive analytics answers the question, “What happened? In
the past”.
 It summarizes current business status in the way of
narrative and innovative visualization.
 Data visualization is a natural fit for communicating
descriptive analysis because charts, graphs, and maps can
show trends in data—as well as dips and spikes—in a clear,
easily understandable way.
 It highlights past trends that lead to valuable insights for
business, but we do not emphasize here "why these trends
happened".
 We use Descriptive Analytics when we want to summarize
the story of an organization's performance (mostly in the
form of Dashboards).
 It provides us with a comprehensive view by joining
different things together to highlight hidden trends and
insights.
 Information extracted from descriptive analytics helps leadership
to take actions to make things better, and now with the help of Big
Data technologies, management sees the real–time progress of
various vital business metrics. Management sees a complete
picture by benchmarking company performance against the past
few years and key competitors.
 Below are a few examples of knowledge extracted from
descriptive analytics :
 More cars come for servicing during monsoon due to water
problems so garage should think about hiring part–time mechanics
during monsoon to cater to the temporary demand.
 Men convert credit card transactions into EMI more than women;
banks should target men for EMI promotion as they are more likely
to opt for the promotional campaign.
 Internet routers show lots of information packets drop during 4–6
PM due to high congestion, support team to provide extra
bandwidth during this time slot for seamless customer experience.
 The health department observes a
recurring hike in malaria disease in a
particular locality every year during the
rainy season; they find water bodies are
open in that area which is causing
For example, in an online
mosquito
learning coursebreeding.
with a
discussion board, descriptive
analytics could determine
how many students
participated in the
discussion, or how many
times a particular student
posted in the discussion
Essential Tools used in Descriptive
Analytics :
 Statistical Summary : It provides statistical
descriptions for a given business metric, e.g.
Mean, Median, Standard Deviation, Percentile,
Interquartile range, etc.
 Z–Score : Z Score tells us how far (in terms of
standard deviation) is a particular value of x from
its mean.
 Coefficient of Variance : It is a ratio where we
divide standard deviation with mean.
 Interquartile Range : It is an important
measure to gauge the variation in the dataset.
2. Diagnostic Analytics
 Diagnostic analytics addresses the next logical
question, “Why did this happen?”
 Diagnostic analytics provides "Why did it happen in my
business".
 It is a bit advanced where analysts examine data in
order to find reasons for business problems or
opportunities.
 Ex: In a time series data of sales, diagnostic analytics
would help you understand why the sales have
decreased or increased for a specific year or so.
 Eg: Reduction in production because of drop in quality.
Below are a few examples :
 A company found that employees are not completing

learning certifications, analyst diagnosed that most of the

employees are stuck at programming assignments, where
programming interface was not supportive/ flexible, and
there was no way to get hints/ help to proceed further.
 There was a low hotel check–in feedback score; analysts

diagnosed that front office executive enters customer

details which are not required fields during check–in itself.
Typing speed and system navigation is also very slow
which is resulting in a longer check– in time.
 The product return rate was very high during last month,

and it found that out of total return items more than 60%
of products were supplied by two vendors only, where the
vendor provided the wrong specification about products.
Essential tools used in Descriptive
Analytics :
 Correlation Analysis : It is a statistical measure
that indicates the strength of the relationship
between two variables.
 5 Why Analysis : It is a very structured approach
where we try to dig into a problem and peel it layer
by layer to reach the root cause of the problem.
 Cause and Effect Analysis : Here, we identify all
possible reasons for one problem then we pick up all
the reasons as a problem one by one and try to find
other causes for that problem.
3. Predictive Analytics
 Predictive analytics is used to make predictions
about future trends or events and answers the
question, “What might happen in the future?”.
 Predictive analytics is the heart of business analytics,
it aims to help the organization by predicting
probabilities of occurrence of a future event or future
values of any essential business metrics.
 Once organizations have a stable setup for
descriptive analytics, Predictive analytics combines
this historical data with advanced business protocols
(policy and rules) to forecast future values of
business events.
 Predictive analytics allows organizations to become
forward–looking, providing an appetite to consume
calculated risk by anticipating customer behavior and
business outcomes.
 Ex: sales in the next month/ quarter, employee attrition,

and product return rate, etc.

Below are a few examples :
 Netflix predicts the next movie customers want to

watch, more than 80% of customers select their next

movie from their recommendation list. In this way,
Netflix earns more rental income from regular customers
by suggesting them the next film or programs.
 Airline companies predict competitive airfares
to extraordinary and ordinary days also they
indicate how much airfare should be increased
as per the increased customer's traffic on their
websites.
 IRCTC predict the probability to confirm the seat

which provides assurance to the customer

about their seat confirmation, it helps to attract
more customers to their portal.
 Taxi services predict the demand during

different time slots and change their tariff

accordingly.
Important Tools used in Predictive
Analytics :
 Regression Analysis : It establishes the mathematical
relationship between input variables and output variables,
which means if we can calculate the future value of output for
any given input, e.g. sales forecast for next month.
 Logistic Regression : It is a classification predictive analytics
technique that can predict the output class for any given set of
inputs. E.g. by providing customer demographics logistic
regression can indicate whether the customer will default bank
loan in the future or not.
 Decision Tree : Most of the time, we use a decision tree as a
classification technique; it tells us the output probability of the
output variable for various permutations of our input variables.
Although it can be used for continuous output variables also
 Clustering Techniques : These techniques segregate our
customers into a few logical segments so that we can
create tailored offers for a different type of customers as
per their needs and interests.
 Random Forest : It is another very famous business
analytics technique that uses a collaborative approach to
solve the problem by generating a large number of
predictive models. Their accuracy is generally better
4. Prescriptive Analytics
 Finally, prescriptive analytics answers the question, “What
should we do next?”
 Prescriptive analytics solves the complex business problem as
it is the most advanced form of analytics, where we have to
choose the most optimal way to increase important business
metrics.
 perspective analytics can be applied once we have sound
business knowledge from descriptive and predictive analytics.
 Descriptive and predictive analytics suggest to us various ways to
improve business performance while prescriptive analytics tells us
the pros and cons of all alternatives and try to provide the optimal
outputs by keeping minimum risk in execution.
 Prescriptive analytics is not limited to predict "what will happen"
and "when will it happen" but it also tries to reveal "why it will
happen" and "what would be the impact on the business"
Below are Examples of Prescriptive Analytics :
 In 2019, there was a prediction of the cyclone on coastal

areas of Gujarat (by predicting changing airspeed,

varying wind direction, and mathematical relationship
between low pressure in the ocean with changes in
cyclone intensity) therefore Government and disaster
management team had taken proactive actions in shifting
citizens from coastal areas to save places, and they
stopped fishermen from going to sea and arrange
comfortable camps. While in a similar situation in 1999
we lost approx. 10,000 lives due to cyclone.
 Banks use prescriptive analytics to identify investment

options for their customers to maximize their returns and

minimize risk. They balance customer's portfolio by
having an optimized ratio of equity, debt, and other types
of funds.
 At the time of launching a new service or a product
into the market, organizations have to keep various
factors into the mind like the cost of the product,
features of the product, geographies in which they
will launch first, customer segments whom they
want to attract, marketing channels for product
promotion, etc. By getting analytical results from
descriptive and predictive analytics, analysts apply
prescriptive analytics to decide the right mix of all
these factors to make a product launch successful.
 In agriculture crop yield depends on various factors
like rainfall, soil type, demand in the market, etc.
Analysts apply prescriptive analytics and suggest
Important Tools used in Prescriptive
Analytics :
 Linear Programming : In linear programming, we optimize

the objective functions like revenue, market share, customer

feedback ratings by also keeping constraints in the model like
budget, no. of people deployed, etc. as linear functions.
 Analytical Hierarchy Process : We apply these techniques in
scenarios where we have to identify the best solution among
various available options, and there is the list of criteria's to
select the solution, e.g. select best cloud service providers
among top 5 organizations by keeping multiple factors into
consideration like budget, customer service, flexibility to
upgrade, backup services, maintenance cost, etc.
 Combinational Optimization : It involves identifying optimal
solutions from a considerable number of finite solutions, e.g. the
travelling salesman problem, vehicle routing problem, etc.
WHO NEEDS DATA ANALYTICS?
 Any business professional who makes decisions needs foundational

data analytics knowledge.

Professionals who can benefit from data analytics skills
include:
 Marketers, who utilize customer data, industry trends, and

performance data from past campaigns to plan marketing

strategies
 Product managers, who analyze market, industry, and user data

to improve their companies’ products

 Finance professionals, who use historical performance data and

industry trends to forecast their companies’ financial trajectories

 Human resources and diversity, equity, and inclusion

professionals, who gain insights into employees’ opinions,

motivations, and behaviors and pair it with industry trend data to
make meaningful changes within their organizations.
Importance Of Data Analytics
 Data is an unorganized and raw collection of facts
that has massive importance for a company.
 In the modern world, every company wants to collect
and analyze data to know their past mistakes.
 It might help them to build a better future.
Sometimes these companies find it challenging to
use analytics tools.
 The demand for data analysts and their related roles
comes into the picture. You might understand that
industries require data analytics skills.
 Data Analytics always helps companies to get an insight into how to
develop the business.
 There are several types of tools you will require to interpret the data.
 Companies use data analytics tools to understand customer behavior
and increase productivity.
 It might help them to store information about the latest trends in the
market.
 The company uses tools related to business intelligence and data
management to identify the changing functions.
 The main three things will give good insight, immediate action, and
information system. A good insight will help you to understand the
business context.
 The information will help to access the organization’s storage and
information system.
 You will be able to take immediate action based on valuable
information.
 The companies are trends to focus on experiments with analytical
languages and tools to develop new ideas.
Benefits of Data Analytics :
Improved Decision Making :
 When big data joins forces with artificial intelligence,

machine learning, and data mining, companies are

better equipped to make accurate predictions.
 For example, predictive analytics can suggest what

could happen in response to changes to the business,

and prescriptive analytics can indicate how the company
should react to these changes.
 Additionally, enterprises can use data analytics tools to

determine the success of changes and visualize the

results, so decision-makers know whether to roll the
changes out across the business.
Increased Efficiency and Productivity :
 Data analytics enables organizations to increase

efficiency and productivity by automating and

streamlining processes, maximizing resource allocation,
and minimizing manual labor.
 Additionally, data analytics assists businesses in

identifying areas where productivity can be increased,

such as waste reduction, better inventory control, and
supply chain optimization.
More effective marketing :
 By using data analytics, companies can pinpoint

precisely what customers are looking for.

 Data enables businesses to do in-depth analyses of

client trends, which companies can then utilize to

develop successful, focused, and targeted marketing.
Enhanced Customer Experience :
 By giving organizations useful insights into customer

behavior, preferences, and needs, data analytics enables

businesses to identify areas where they can improve their
customer experience–such as lowering wait times,
enhancing customer service, or streamlining user
interfaces.
Improved Risk Management :
 Data analytics can, for instance, assist companies in

identifying potential fraud, online threats, or operational

risks. Businesses can also take preventative action to
mitigate potential risks by monitoring data in real-time. By
utilizing data analytics to enhance risk management, they
can lessen the possibility of monetary losses, reputational
damage, and other negative outcomes.
Competitive Advantage :
 Analyzing data from various sources allows businesses to

understand market trends, consumer behavior, and

competitor activities. Businesses can use this information to
improve their strategies, spot new opportunities, and set
themselves apart from the competition.
 Data analytics can, for instance, aid companies in identifying

underserved market segments, anticipating client needs,

and enhancing product offerings. Simply put, businesses can
increase their market share, spur revenue growth, and fortify
their brand by utilizing data analytics to gain a competitive
advantage.
 Data analytics is a potent tool that can assist companies in

enhancing their operations and achieving better business

results.
Different Applications of Data Analytics
in Business
 Business Analytics provides an in-depth knowledge
of the organization’s data. This in turn helps in
understanding the present circumstances as well as in
predicting future events and trends.
1. FINANCE
◦ Business Analytics assists financial managers in managing
their finances optimally and then taking relevant
measures. Implementing business analytics in various
sectors of finance(such as investment banking and
budgeting) can prove to be highly fruitful for the finance
industry.
◦ It helps in building future strategies for a new product by
observing similar products and methodologies.
◦ In addition to this, business analytics can also be used to
predict future loan defaulters.
2. HUMAN RESOURCES MANAGEMENT (HRM)
◦ Human Resource Management is the process or practice of
managing, hiring, organizing, training, and directing people
in an organization in a strategic manner. Human Resources
(or HR) professionals use business analytics in several ways.
◦ It helps them in analyzing large amounts of data to
understand employees’ needs and grievances and therefore
assist them accordingly.
◦ Business analytics can be used by HR in determining the
right candidates, the expected salaries as well as the
trending retention rates in the industries.
◦ Moreover, HR professionals can leverage business analytics
to forecast the trajectory of the organization and thus
efficiently design appropriate training and development
programs for trainees or employees.
3. PRODUCTION AND INVENTORY MANAGEMENT
 Management is a key element in every organization. It

aims to enhance the profits and productivity of an

organization all the while trying to reduce overall costs.
 Business Analytics serves as a great tool for

management and manufacturing. It is involved in every

phase of product development. It supports analyzing
the inventory measures and designing business
solutions that are most suitable for products.
 It can help determine the costs and gauge the expected

sales of products. This way the organizations can adapt

to the latest styles and opportunities in the industry.
4. CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
◦ Customer Relationship Management or CRM is the process
of building and managing the organization’s relationships
as well as interactions with customers.
◦ Business analytics can be used in customer relationship
management to understand the customer base better and
therefore, implement corresponding strategies. This helps
significantly drive sales and amplifies the organization’s
profits.
◦ Customers’ purchasing patterns, needs, buying behaviors,
issues, feedback, and all the other indicators can be
obtained and analyzed through business analytics
methodologies. These indicators can then be used to foster
long-lasting and loyal relationships between clients and the
organization.
WHAT IS DATA ANALYTICS IN BUSINESS?
 Data analytics is the practice of examining data

to answer questions, identify trends, and extract

insights.
 When data analytics is used in business, it’s often

called business analytics.

 You can use tools, frameworks, and software to

analyze data, such as Microsoft Excel and Power

BI, Google Charts, Data Wrapper, Infogram,
Tableau, and Zoho Analytics.
 These can help you examine data from different

angles and create visualizations that illuminate

the story you’re trying to tell.
Importance Of Business Analytics:
 Business analytics is a methodology or tool to make a sound

commercial decision. Hence it impacts functioning of the whole

organization. Therefore, business analytics can help improve
profitability of the business, increase market share and revenue
and provide better return to a shareholder.
 Business analytics combines available data with various well

thought models to improve business decisions.

 Converts available data into valuable information.
 This information can be presented in any required format,

comfortable to the decision maker.

 For starters, business analytics is the tool your company

needs to make accurate decisions.

 These decisions are likely to impact your entire organization

as they help you to improve profitability, increase market

share, and provide a greater return to potential shareholders.
Essentially, the four main ways business
analytics is important :
 Improves performance by giving your business a

clear picture of what is and isn’t working.

 Provides faster and more accurate decisions .
 Minimizes risks as it helps a business make the right

choices regarding consumer behaviour, trends, and

performance.
 Inspires change and innovation by answering

questions about the consumer.

Benefits of Business Analytics
 Apart from having applications in various arenas, following
are the benefits of Business Analytics and its impact on
business –
 Accurately transferring information
 Consequent improvement in efficiency
 Help portray Future Challenges
 Make Strategic decisions
 As a perfect blend of data science and analytics
 Reduction in Costs
 Improved Decisions
 Share information with a larger audience
 Ease in Sharing information with stakeholders
Business analytics:
 Business analytics is a set of statistical and
operations research techniques, artificial
intelligence, information technology and
management strategies used for framing a business
problem, collecting data, and analyzing the data to
create value to organizations.
 Business Analytics can be broken into 3

components:
1. Business Context
2. Technology
3. Data Science
Business Context :
 Business analytics projects start with the business context and
ability of the organization to ask the right questions.
 Another good example of business context driving analytics is
the ‘did you forget feature’ used by the Indian online grocery
store bigbasket.com (Abraham et al., 2016). Many customers
have the tendency to forget items they intended to buy. The
customers may buy the forgotten items from a nearby store
where they live, resulting in reduction in basket size in the
future for online grocery stores such as bigbasket.com.
 Alternatively, the customer may place another order for
forgotten items, but this time, the size of the basket is likely to
be small and results in unnecessary logistics cost. Thus, the
ability to predict the items that a customer may have
forgotten to order can have a significant impact on the profits
of online grocers such as bigbasket.com.
 Another problem that online grocery customers face while
ordering the items is the time taken to place an order. Unlike
customers of Amazon or Flipkart, online grocery customers
order several items each time; the number of items in an
order may cross 100. Searching for all the items that a
customer would like to order is a time-consuming exercise,
especially when they order using smart phones. Thus, big
basket created a ‘smart basket’ which is a basket consisting
of items that a customer is likely to buy (recommended
basket) reducing the time required to place the order.
 The above examples( ‘did you forget’ and smart basket
feature at bigbasket.com) manifest the importance of
business context in business analytics, that is, the ability to
ask the right questions is an important success criteria for
analytics projects.
Technology:
 To find out whether a customer has forgotten to place an order for an item,

we need data. In both the cases, the point of sale data has to be captured
consisting of past purchases made by the customer. Information Technology
(IT) is used for data capture, data storage, data preparation, data analysis,
and data share. Today most data are unstructured data; data that is not in
the form of a matrix (rows and columns) is called unstructured data. Images,
texts, voice, video, click stream are few examples of unstructured data. To
analyse data, one may need to use software such as R, Python, SAS, SPSS,
Tableau, etc. for example, in the case of Target, technology can be used to
personalize coupons that can be sent to individual customers.
Data Science :
 Data Science is the most important component of analytics, it consists of

statistical and operations research techniques, machine learning and deep

learning algorithms.
 There are several techniques available for solving classification problems

such as logistic regression, classification trees, random forest, adaptive

boosting, neural networks, and so on. The objective of the data science
component is to identify the technique that is best based on a measure of
accuracy.
Web Analytics?
What is Web Analytics?
 Web analytics is the gathering, synthesizing, and analysis of
website data with the goal of improving the website user
experience.
 Web Analytics is the methodological study of online/offline
patterns and trends. It is a technique that you can employ to
collect, measure, report, and analyze your website data. It is
normally carried out to analyze the performance of a website
and optimize its web usage.
 We use web analytics to track key metrics and analyze
visitors’ activity and traffic flow.
 It is a tactical approach to collect data and generate reports.
 Web analytics enables a business to retain customers,
attract more visitors and increase the dollar volume each
customer spends.
Analytics can help in the following ways:
 Determine the likelihood that a given customer will

repurchase a product after purchasing it in the past.

 Personalize the site to customers who visit it repeatedly.

 Monitor the amount of money individual customers or

specific groups of customers spend.

 Observe the geographic regions from which the most and

the least customers visit the site and purchase specific

products.
 Predict which products customers are most and least likely

to buy in the future.

Web analytics process:
 Web Analytics is an ongoing process that helps in attracting more
traffic to a site and thereby, increasing the Return on Investment.
The web analytics process involves the following steps:
1. Setting goals:
 The first step in the web analytics process is for businesses to

determine goals and the end results they are trying to achieve. These
goals can include increased sales, customer satisfaction and brand
awareness.
2. Collecting data:
 The second step in web analytics is the collection and storage of data.

Businesses can collect data directly from a website or web analytics

tool, such as Google Analytics. The data mainly comes from Hypertext
Transfer Protocol requests. For example, a user's Internet Protocol
address is typically associated with many factors, including
geographic location and click through rates.
3. Processing data:
 The next stage of the web analytics funnel involves businesses

processing the collected data into actionable information.

4. Identifying key performance indicators (KPIs):
 In web analytics, a KPI is a quantifiable measure to monitor and

analyze user behavior on a website. Examples user sessions and

on-site search queries.
5. Developing a strategy :
 This stage involves implementing insights to formulate strategies

that align with an organization's goals. For example, search queries

conducted on-site can help an organization develop a content
strategy based on what users are searching for on its website.
6. Experimenting and testing:
 Businesses need to experiment with different strategies in order to

find the one that yields the best results.

 For example, A/B testing is a simple strategy to help learn how an

audience responds to different content. The process involves

creating two or more versions of content and then displaying it to
different audience segments to reveal which version of the content
performs better.
Off-site web analytics
 The term off-site web analytics refers to the practice of

monitoring visitor activity outside of an organization's

website to measure potential audience. Off-site web
analytics provides an industry wide analysis that gives
insight into how a business is performing in comparison to
competitors.
On-site web analytics
 On-site web analytics refers to a narrower focus that uses

analytics to track the activity of visitors to a specific site to

see how the site is performing. The data gathered is usually
more relevant to a site's owner and can include details on
site engagement, such as what content is most popular.
Two technological approaches to on-site web analytics
include log file analysis and page tagging.
Text analytics
 Text Analytics is the process of converting unstructured
text data into meaningful data for analysis, to measure
customer opinions, product reviews, feedback, to
provide search facility, sentimental analysis and entity
modeling to support fact based decision making.
 Text analytics is the quantitative data that you can
obtain by analyzing patterns in multiple samples of
text. It is presented in charts, tables, or graphs.
 Text analytics helps you determine if there’s a
particular trend or pattern from the results of analyzing
thousands of pieces of feedback. Meanwhile, you can
use text analysis to determine whether a customer’s
feedback is positive or negative
 Text Analytics determines key words, topics, category,
semantics, tags from the millions of text data available
in an organization in different files and formats.
 The term Text Analytics is roughly synonymous with
text mining.
 Text analytics software solutions provide tools, servers,
analytic algorithm based applications, data mining and
extraction tools for converting unstructured data in to
meaningful data for analysis.
 The outputs, which are extracted entities, facts,
relationships are generally stored in a relational, XML,
and other data warehousing applications for analysis
by other tools such as business intelligence tools or big
data analytics or predictive analytics tools.
Text analytics in business :
 Every business strives to provide the best to their customers. To
achieve this, they are depending on text analytics to study and
understand patterns, drifts in behavior through the positive and
negative feedback provided, buying trends, opinions of
consumers, blogs etc.
 And modify the approachability to satisfy needs which can make
a greater impact on business.
 By implementing text-based analytics, a business can bridge the
gap to unlock the very needs and demands of the customers.
 Text analytics focuses on quantitative insights that give the
essence of ‘why’ a particular problem arises and ‘what’ the
reasons are and upon understanding, ‘how’ can a business
overcome it in the most effective way.
 Various tools like HANA, Python, R, Microsoft excel etc can be
used to achieve important tasks of Text analytics as discussed
below.
Important Tasks in Text Analytics:
 Information Extraction: It involves extracting the relevant

information from large volumes of textual data. It centres on

extracting attributes and entities. This information can be used for
further analysis.
 Information Retrieval: Information Retrieval (IR) alludes to
extricating relevant and related examples dependent on a
particular arrangement of words or expressions. In this content
mining strategy, IR frameworks utilize various calculations to track
and screen client practices and find applicable information as
needs are. Google and Yahoo web indexes are the two most famous
IR frameworks.
 Clustering: It looks to recognize characteristic constructions in
text based data and sort them into relevant subgroups or 'bunches'
for additional examination. A critical test in the grouping interaction
is to frame significant groups from the unlabelled text-based
information without having any earlier data on them.
 Summarization: This content mining strategy
helps to create a summary of a large volume of
text in a way that the meaning and intent of the
original document is preserved.
 Categorization: This technique is used to
classify text (review, paragraph, document) into a
relevant category. The text could be the reviews
provided by different users for a product and the
reviews could be classified as positive or
negative. Similarly, a mail can be classified into a
spam or non spam email.
 Skills for Business Analytics
 Business analytics refers to the process of extracting
insights from data to make informed decisions regarding a
business question or challenge.
 Here are five skills you can develop to improve your

understanding of business analytics.

1. Data Literacy
 One of the fundamental skills to build before diving into

business analytics is data literacy. At its most basic, data

literacy means you’re familiar with the language of data,
including different types, sources, and analytical tools and
techniques.
 Being data literate also means you’re comfortable working

with data in various ways—from evaluating it to manipulating

it and gaining insights.
2. Data Collection
 The first step in leveraging analytics to drive business

decisions is to collect a data sample from which conclusions

can be drawn.
 In some cases, a dataset already exists, and it’s up to the

business analyst to pull relevant information. For example, if

you’re interested in discovering a retail store’s most
profitable products, you might start by pulling historical sales
data for transactions that took place over a specific period.
3. Statistical Analysis
 Several statistical methods can be helpful when it comes to

analysis, including:
 Hypothesis testing , which is a statistical means of testing an

assumption.
 Linear regression analysis, which can be used to evaluate the

relationship between two variables.

 Multiple regression analysis, which is used to evaluate the
relationship between three or more variables.
 Through these forms of analysis, you can draw insights and

conclusions that answer your business question.

4. Communication
 While insights derived from reliable data are key to making

informed business decisions, it’s likely that other stakeholders

need to be involved in the decision-making process. For this
reason, effectively communicating your findings is essential.
Without strong communication skills, the value of your
analyses can go unrealized.
5. Data Visualization
 Data visualization goes hand in hand with strong

communication, as it allows you to present findings in an easily

digestible format for those who may not be as data literate as
you are.