Business Analytics

BBA 202
BBA IV SEM
 Business Analytics
• Business Analytics is the discovery and communication of meaningful
patterns of data and that to business‐related problems.

• It is the scientific process of transforming data into insight for making

better decisions (INFORMS). [data => information => knowledge =>
wisdom]
• BA is the extensive use of data, statistical and quantitative analysis,
explanatory and predictive models, and fact‐based management to
drive decisions and actions(Davenport & Harris)
 Business Analytics
• What is Business Analytics (BA)?
• BA is the use of:
• data,
• information technology,
• statistical analysis,
• quantitative methods, and mathematical or computer‐based models
• to help managers to gain improved insight about their
business operations and make better, fact‐based decisions
 Business Analytics
• Business Analytics Applications

• Pricing decisions
• Financial and marketing activities
• Supply chain management
• Management of customer relationships
• Human resource planning
• Enterprise resource planning
 Business Analytics
• Importance of Business Analytics

• There is a strong relationship of BA with: ‐

• profitability of businesses
• ‐ revenue of businesses
• ‐ shareholder return
• BA enhances understanding of data
• BA is vital for businesses to remain competitive
• BA enables creation of informative reports
 Business Analytics
Evolution of Business Analytics
• Time study exercise by Taylor
• Operations research (OR)
• Management science (MS)
• OR and MS with ICT
• Business intelligence
• Decision support systems
• Personal computer software
 Business Analytics
Framework of Business Analytics
Statistics
‐ descriptive statistics
‐ inferential statistics
‐ forecasting ‐ modelling
Quantitative methods
‐ Simulation
‐ optimization
‐ modelling
Information systems for business intelligence
‐ Big data, small data
‐ data marts, spreadsheets
‐ modelling
Applications of Business
Analytics
Applications of Business
Analytics
Applications of Business
Analytics
Applications of Business
Analytics
Applications of Business
Analytics
 Business Analytics
Why Business Analytics?
‐ Analytical Approach ‐ Non‐
analytical approach (Delphi Technique/ Grounded theory)
Analytical approach is better choice than non‐analytical approach
Why????
Using data to derive conclusions/decisions can deliver a significant high
er chance of making a good, long‐lasting decision over non‐
data driven approach.
More useful Applications as per the current requirements:
Risk management, fraud detection, revenue management, healthcare
management Advantage:
Time saving, cost saving, more productive, competitive advantage, incr
eased customer satisfaction, expanded sales/profits, etc.
 Business Analytics
A Categorization of Analytical Methods and Models
Analytics is generally thought to comprise three broad categories of
techniques: descriptive analytics, predictive analytics, and prescriptive
analytics.
Descriptive Analytics
Descriptive analytics encompasses the set of techniques that describes what
has happened in the past. Examples are data queries, reports, descriptive
statistics, data visualization including data dashboards, some data-mining
techniques, and basic what-if spreadsheet models.
A data query is a request for information with certain characteristics from a
database.
Data dashboards are collections of tables, charts, maps, and summary
statistics that are updated as new data become available
 Business Analytics
Predictive Analytics
Predictive analytics consists of techniques that use models constructed
from past data to predict the future or ascertain the impact of one
variable on another. For example, past data on product sales may be used
to construct a mathematical model to predict future sales, which can
factor in the product’s growth trajectory and seasonality based on past
patterns.
Data mining, techniques used to find patterns or relationships among
elements of the data in a large database, is often used in predictive
analytics.
Simulation involves the use of probability and statistics to construct a
computer model to study the impact of uncertainty on a decision.
e.g.Banks use simulation models to analyse the probability of loan default
 Business Analytics
Prescriptive Analytics
Prescriptive analytics differ from descriptive or predictive analytics in that
prescriptive analytics indicate a best course of action to take; that is, the
output of a prescriptive m.
The airline industry’s use of revenue management is an example of a
prescriptive analytics. Airlines use past purchasing data as inputs into a
model that recommends the best pricing strategy across all flights for
maximizing revenueodel is a best decision.
 Business Analytics
Step-wise Process of Business Analytics
• ‐ Problem identification
• ‐ literature review
• ‐ hypotheses setting
• ‐ modelling
• ‐ Data collection
• ‐ Data structuring
• ‐ Data Analysis
• ‐ Reliability and validity
• ‐ Results and discussion
• ‐ Robustness
• ‐ Sensitivity analysis
• ‐ Inferences
 Business Analytics
• Data Scientist:
• Role: Data Scientists are primarily responsible for extracting insights
and knowledge from data using various statistical, analytical, and
machine learning techniques. They analyze complex datasets to
identify patterns, trends, and correlations that can help businesses
make informed decisions.
• Skills: Data Scientists require strong programming skills (typically in
languages like Python or R), expertise in statistical analysis, machine
learning algorithms, data visualization, and domain knowledge in the
specific field they are working in. They also need to have a solid
understanding of databases and data manipulation techniques.
 Business Analytics
• Data Engineer:
• Role: Data Engineers are focused on the design, construction, and
maintenance of the systems and infrastructure that allow for the
processing of large volumes of data. They are responsible for
developing data pipelines, data warehouses, and ETL (Extract,
Transform, Load) processes to ensure that data is accessible and
usable for analysis.
• Skills: Data Engineers need to be proficient in database technologies
(SQL, NoSQL), big data tools (Hadoop, Spark), data modeling, and
software engineering principles. They also work closely with Data
Scientists and Business Data Analysts to ensure that the data
infrastructure meets the organization's needs.
 Business Analytics
• Business Data Analyst:
• Role: Business Data Analysts focus on interpreting data to provide
actionable insights that support business decision-making. They work
closely with stakeholders across various departments to understand
their data needs, gather requirements, and present findings in a clear
and understandable manner.
• Skills: Business Data Analysts require strong analytical skills,
proficiency in data visualization tools (such as Tableau, Power BI), and
the ability to translate complex data into actionable insights for non-
technical stakeholders. They also need a good understanding of
business processes and goals to effectively analyze and interpret data
in a meaningful way.
 Business Analytics in Practice
• Financial Analytics
• Applications of analytics in finance are numerous and pervasive. Predictive
models are used to forecast future financial performance, to assess the risk of
investment portfolios and projects, and to construct financial instruments such
as derivatives. Prescriptive models are used to construct optimal portfolios of
investments, to allocate assets, and to create optimal capital budgeting plans
• Human Resource (HR) Analytics
• A relatively new area of application for analytics is the management of an
organization’s human resources (HR). The HR function is charged with ensuring
that the organization (1) has the mix of skill sets necessary to meet its needs,
(2) is hiring the highest-quality talent and providing an environment that
retains it, and (3) achieves its organizational diversity goals. Descriptive and
predictive analytics to support employee hiring and to track and influence
retention
 Business Analytics in Practice
• Marketing Analytics
• Marketing is one of the fastest growing areas for the application of
analytics. A better understanding of consumer behavior through the use
of scanner data and data generated from social media has led to an
increased interest in marketing analytics. As a result, descriptive,
predictive, and prescriptive analytics are all heavily used in marketing. A
better understanding of consumer behavior through analytics leads to the
better use of advertising budgets, more effective pricing strategies,
improved forecasting of demand, improved product line management,
and increased customer satisfaction and loyalty.
 Business Analytics in Practice
• Health Care Analytics
• The use of analytics in health care is on the increase because of
pressure to simultaneously control cost and provide more effective
treatment. Descriptive, predictive, and prescriptive analytics are
used to improve patient, staff, and facility scheduling; patient flow;
purchasing; and inventory control. The use of prescriptive analytics
for diagnosis and treatment is relatively new, but it may prove to be
the most important application of analytics in health care.
 Business Analytics in Practice
• Supply Chain Analytics
• One of the earliest applications of analytics was in logistics and
supply chain management. The core service of companies such as
UPS and FedEx is the efficient delivery of goods, and analytics has
long been used to achieve efficiency. The optimal sorting of goods,
vehicle and staff scheduling, and vehicle routing are all key to
profitability for logistics companies such as UPS, FedEx, and others
like them. Companies can benefit from better inventory and
processing control and more efficient supply chains. Analytic tools
used in this area span the entire spectrum of analytics.
 Business Analytics in Practice
• Analytics for Government and Nonprofits
• Government agencies and other nonprofits have used analytics to drive out
inefficiencies and increase the effectiveness and accountability of programs.
Indeed, much of advanced analytics has its roots in the U.S. and English military
dating back to World War II. Today, the use of analytics in government is becoming
pervasive in everything from elections to tax collection.
• Sports Analytics
• The use of analytics for player evaluation and on-field strategy is now common,
especially in professional sports. Examples are professional sports teams that use
analytics to assess players for the amateur drafts and to decide how much to offer
players in contract negotiations; professional motorcycle racing teams that use
sophisticated optimization for gearbox design to gain competitive advantage; and
teams that use analytics to assist with on-field decisions such as which pitchers to
use in various games of a Major League Baseball playoff series
 Business Analytics in Practice
Web Analytics
• Web analytics is the analysis of online activity, which includes, but is not
limited to, visits to Web sites and social media sites such as Facebook and
LinkedIn. Web analytics obviously has huge implications for promoting
and selling products and services via the Internet. Leading companies
apply descriptive and advanced analytics to data collected in online
experiments to determine the best way to configure Web sites, position
ads, and utilize social networks for the promotion of products and
services. Online experimentation involves exposing various subgroups to
different versions of a Web site and tracking the results. Because of the
massive pool of Internet users, experiments can be conducted without
risking the disruption of the overall business of the company.
 Career in Business Analytics
A career in Business Analytics offers a unique opportunity to blend
analytical skills with business acumen to drive organizational success.
As businesses continue to harness the power of data, the demand for
skilled professionals in this field will only continue to grow.
Demand for Business Analysts: The demand for skilled business analysts
is on the rise across various industries, including finance, healthcare,
retail, and technology. Organizations are increasingly relying on data-
driven insights to gain a competitive advantage, leading to a growing
need for professionals who can interpret data and provide strategic
guidance.
 Career in Business Analytics
Skills Required:
• Data Analysis: Proficiency in analyzing large datasets using statistical
methods and tools such as Excel, Python, R, or SQL.
• Problem-Solving: The ability to identify business problems, formulate
hypotheses, and develop analytical solutions to address them.
• Data Visualization: Communicating insights effectively through data
visualization tools like Tableau or Power BI.
• Domain Knowledge: Understanding of business operations and
industry-specific trends to contextualize analytical findings.
• Communication: Strong verbal and written communication skills to
convey complex findings to stakeholders.
 Career in Business Analytics
Career Paths:
• Business Analyst: Entry-level role involving data analysis, report generation,
and providing insights to support decision-making.
• Data Analyst: Focusing primarily on data collection, cleaning, and analysis to
derive actionable insights.
• Business Intelligence Analyst: Specializing in transforming raw data into
meaningful and actionable information to support strategic decision-
making.
• Data Scientist: Leveraging advanced statistical and machine learning
techniques to uncover insights and build predictive models.
• Data Engineer: Designing and maintaining data pipelines to ensure the
efficient flow and storage of data for analysis.
 Introduction to R Programming Language

This language was created by Ross Ihaka and Robert Gentleman in

1995 (and released in 1997) as a part of the GNU project. This project
used the GNU operating system and its packages to create free software
and has since been maintained by the R foundation – a non-profit
organization. As a result, it is free and functions under the GNU General
Public License in source code form provided by the Free Software
Foundation.
 Introduction to R Programming Language

R is a free, open-source language used as a statistical and visualization software. It can handle
structured as well as semi-structured data.

R is a powerful tool which was built for productivity in data analysis tasks from the outset.

It is built as a statistician-friendly interface to abstract away the computational jugglery.

 The programming skill accumulated from R is easily transferable to other domains.

Other domains include web scraping, file handling.

 Introduction to R Programming Language

 Is available across all platforms, such as Linux, Mac, and Windows • Has the ability to
integrate with the procedures written in the C, C++, .Net, Python, or FORTRAN languages

Has an effective data handling and storage facility

 Provides a wide variety of integrated collection of tools for data analytics

 Introduction to R Programming Language

• R is a free software.
• R is a statistical software where complex stats models like linear regression, logistic
regression, hypothesis testing, ANOVA(Analysis Of Variance), GLM(Generalized Linear Model),
etc., can be run.
• R has some great tools to aid data visualization to create graphs, bar charts, multi-panel
lattice charts, scatter plots, and new custom-designed graphics.
• ML algorithms like SVM, Naives Bayes theorem, XGboost, Decision tree, and Random forest
are available in R readily. These algorithms have proven to be better over time and provide
good accuracy of results.
• You can now write R codes in SAS as R codes are widely used, and programmers are getting
familiar with these. • R can handle semi-structured data and has algorithms built.
• Programmers can define their customized algorithms in R and develop their own
 Introduction to R Programming Language

• (1) Objects and Environment

• Being an object-based language, in R anything that can be saved in a variable is
known as an object. In turn, all the operations in R are performed on or
around these objects. The class of the object determines the associated
functions that can be used to manipulate these objects. The data type or the
data structure of the object determines the class of the object.
• All these objects are shown in the Environment window. This makes managing
objects extremely easy as the user can see the objects that are currently
occupying the space in RAM. The user can export, and import objects using
a .RData file and can even delete objects that are unnecessary to make the
coding process more efficient.
 Introduction to R Programming Language

• (2) Console
• It is considered the brain of the R programming language and the IDE
used for running R- R Studio. In the console, you can write the code,
execute it and simultaneously see the output. Any code written in the
console, however, cannot be saved in the form of a script. Also, codes
that have been already executed in the console cannot be edited.
Interestingly, any code that is written in the code window is executed in
the console only.
 Introduction to R Programming Language

• (3) Script
• Codes written in the code window can be saved as a .R file. This file is
commonly known as an R script. These scripts are helpful in sharing and
re-using the codes.
• (4) Operators
• These are symbols that allow us to perform certain operations. For
example, the Task performed using the function sum() can also be
performed using its operator, like this:
• sum(10,20) can also be performed using the + operator -> 10+20
 Introduction to R Programming Language

• R is a comprehensive tool as it can take care of all the major aspects of the data
science domain these include-
• R programming
• Creating User-defined functions
• Automating certain tasks through loops etc
• Data Manipulation, Data Mining, and Data Visualization
• Almost all things done in MS Excel and SQL can be done in R
• Can perform all the Statical concepts that other languages such as SAS and SPSS can do
• This includes simple descriptive stats and applied inferential stats
• It can be used to create complex graphs
• Web Application
• R Shiny which can allow us to create a web-based application to create dashboards
Introduction to R Programming Language
Introduction to R Programming Language
 Checking Data Type
• # numeric • class(x)
• x <- 10.5
• class(x) • # character/string
• x <- "R is exciting"
• # integer • class(x)
• x <- 1000L
• class(x) • # logical
• x <- TRUE
• # complex • class(x)
• x <- 9i + 3
 Checking Data Type
max(5, 10, 15) paste(str1, str2)
10 > 9 TRUE
min(5, 10, 15) 10 == 9 FALSE
sqrt(16) 10 < 9 FALSE
abs(-4.7)
str1 <- "Hello"
str2 <- "World"
 Checking Data Type
a <- 33 i <- 1
b <- 200 while (i < 6) {
print(i)
if (b > a) { i <- i + 1
print("b is greater than a") }
}
Introduction to R Programming Language
Introduction to R Programming Language
Introduction to R Programming Language
Introduction to R Programming Language
Introduction to R Programming Language
Introduction to R Programming Language
Introduction to R Programming Language
Introduction to R Programming Language
Introduction to R Programming Language
 Key Ideas of R
 Idea 1: Data is Separate From Analysis

• Data is distinct from the analysis that is undertaken on this data

 Idea 2 : Functions

• This states that each time we pass the same input to the function, we get the same answer. Second, functions do not

modify the input

 Idea 3: Data Analysis is the Composition of Several Functions

• All data analysis is a sequence of several functions applied one after another, each time producing a specific,

meaningful transformation of the input data. In devising these functions, we are splitting the analysis into a

sequence of small steps, each independent of the other. Any changes to the internal logic of this function do not

change the nature of our analysis which is its biggest advantage

 A Taste of R

Data There is only one way to store data that is, Data Frame. A data frame is merely a

spreadsheet which is a kind of a structure with variables of interest arranged in columns and
the samples on which the variables have been measured arranged in the rows.

Functions and Composition For commonly used statistical functions such as mean() and

median() we do not need to enter any library. These are included when you enter the R
environment. The pipe operator provides an elegant way to organize nested computations.
 Summarizing the Data
• 1.Vectors
• A sequence of elements of the same type.
• Created using the c() function.

num_vec <- c(1, 2, 3, 4, 5)

char_vec <- c("apple", "banana", "cherry")

print(num_vec)

print(char_vec)

print(class(num_vec))

print(class(char_vec))
 Summarizing the Data
• 2. Lists
• Ordered collection of elements, which can be of different types.
• Created using the list() function.

my_list <- list(1, "apple", TRUE, 3 + 4i)

print(my_list)

print(class(my_list))
 Summarizing the Data
• 3. Data Frames
• Table-like structure where each column can contain different types of data.
• Created using the data.frame() function.

 df <- data.frame(

 numbers = c(1, 2, 3),

 fruits = c("apple", "banana", "cherry"),

 logicals = c(TRUE, FALSE, TRUE)

)

 print(df)

 print(class(df))
 Summarizing the Data

• mat <- matrix(1:9, nrow = 3, ncol = 3)

• print(mat)
• print(class(mat))