FUNDAMENTALS OF BUSINESS ANALYTICS

MODULE 1.1
Visual Perspective of Business
Analytics
Why is Big Data Important?
1. Cost Savings:
Some tools of Big Data like Hadoop and Cloud-Based Analytics can bring cost
advantages to business when large amounts of data are to be stored and these tools
also help in identifying more efficient ways of doing business.

2. Time Reductions:
The high speed of tools can easily identify new sources of data which helps
businesses analyze data immediately and make quick decisions based on the
learning.
Why is Big Data Important?
3. Understand the market conditions:
By analyzing big data, you can get a better understanding of current market
conditions. For example, by analyzing customers’ purchasing behaviors, a company
can find out the products that are sold the most and produce products according to
this trend.

4. Control online reputation:

Big data tools can do sentiment analysis. Therefore, you can get feedback about
who is saying what about your company. If you want to monitor and improve the
online presence of your business, then, big data tools can help in all this.
Why is Big Data Important?
5. Using Big Data Analytics to Boost Customer Acquisition and Retention
The use of big data allows businesses to observe various customer related patterns
and trends. Observing customer behavior is important to trigger loyalty

6. Using Big Data Analytics to Solve Advertisers Problem and Offer Marketing
Insights
Big data analytics can help change all business operations. This includes the ability to
match customer expectation, changing company’s product line and of course ensuring
that the marketing campaigns are powerful.
Why is Big Data Important?

7. Big Data Analytics As a Driver of Innovations and Product Development

Another huge advantage of big data is the ability to help companies innovate and
redevelop their products.
What is the Difference between Big Data
and Analytics?
Business analytics focuses on one core metric and that is the financial and
operational analytics of the business. On the other hand, ‘Big data’
analytics helps to analyze a broader range of data coming in from all
sources and helps the company to make better decisions.

Moreover, big data involves automation and business analytics rely on the
person looking at the data and drawing inferences from it. In big data, the
machine largely takes over the job of analytics.
Benefits of Big Data and Data Analytics

 Big data makes it possible for you to gain more complete

answers because you have more information.

 More complete answers mean more confidence in the

data—which means a completely different approach to tackling
problems.
LEARNING OBJECTIVES:
Module 2 After completing this module, you will be
BUSINESS ANALYTICS FRAMEWORK
able to:
▪ Discuss how data becomes business value.
▪ Explain basic concepts on data analysis
framework, data extraction, data
warehousing and data analytics.
▪ Identify the different types of Business
Analytics
▪ Give examples on the applications of
business analytics in finance, human
resource, and marketing.
FRAMEWORK FOR BUSINESS
ANALYTICS
▪ Data extraction

▪ Data warehousing

▪ Extract,Transform, or Load
Processes (ETL)
FRAMEWORK FOR BUSINESS
ANALYTICS
▪ Data extraction.
This is the first step in turning data into analytics. There are at least 3 sources of data
which are the source systems, raw transactions, and from documents and forms.
▪ Data warehousing.
This is where the data is cleaned, curated, organized, and ready for analysis.
A data warehouse (DW) is a collection of corporate information and data derived
from operational systems and external data sources.
▪ Extract, Transform, or Load Processes (ETL).
This is the process of moving data from source systems to data warehouse to an
analytical tool.
Types of Analytics
1. Descriptive Analytics
his is the data that is used to benchmark or to profile

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

3. Prescriptive Analytics
This is used to create recommendations through simulation and optimization models.
TYPES OF ANALYTICS
TYPES OF ANALYTICS

 Descriptive analytics: the use of data to understand past and

current business performance and make informed decisions
 Predictive analytics: predict the future by examining
historical data, detecting patterns or relationships in these data,
and then extrapolating these relationships forward in time.
 Prescriptive analytics: identify the best alternatives to
minimize or maximize some objective
Descriptive analytics
▪ It
is a statistical method that is used to search and summarize historical
data in order to identify patterns or meaning.
▪ Data aggregation and data mining are two techniques used in
descriptive analytics to discover historical data. Data is first gathered
and sorted by data aggregation in order to make the datasets more
manageable by analysts.
▪ Data mining describes the next step of the analysis and involves a
search of the data to identify patterns and meaning. Identified patterns
are analyzed to discover the specific ways that learners interacted with
the learning content and within the learning environment.
Descriptive analytics
Advantages:
1. Quickly and easily report on the Return on Investment (ROI) by showing how
performance achieved business or target goals.
2. Identify gaps and performance issues early - before they become problems.
3. Identify specific learners who require additional support, regardless of how
many students or employees there are.
4. Identify successful learners in order to offer positive feedback or additional
resources. · Analyze the value and impact of course design and learning
resources.
Predictive Analytics
Predictive Analytics is a statistical method that utilizes algorithms and machine learning
to identify trends in data and predict future behaviors.
The software for predictive analytics has moved beyond the realm of statisticians and
is becoming more affordable and accessible for different markets and industries,
including the field of learning & development.
For online learning specifically, predictive analytics is often found incorporated in the
Learning Management System (LMS), but can also be purchased separately as
specialized software.
For the learner, predictive forecasting could be as simple as a dashboard located on
the main screen after logging in to access a course. Analyzing data from past and
current progress, visual indicators in the dashboard could be provided to signal
whether the employee was on track with training requirements
Prescriptive Analytics
Prescriptive analytics involves providing advice on what actions can be taken given the
predictions about the future and what drives the future. is a statistical method used to
generate recommendations and make decisions based on the computational findings
of algorithmic models.

Generating automated decisions or recommendations requires specific and unique

algorithmic models and clear direction from those utilizing the analytical technique. A
recommendation cannot be generated without knowing what to look for or what
problem is desired to be solved. In this way, prescriptive analytics begins with a
problem.
 Most department stores clear seasonal inventory by reducing prices.
 Key question: When to reduce the price and by how much to maximize
revenue?
 Potential applications of analytics:
Descriptive analytics: examine historical data for similar products (prices, units sold,
advertising, …)

 Predictive analytics: predict sales based on price

 Prescriptive analytics: find the best sets of pricing and

advertising to maximize sales revenue
Applications of Business Analytics in
Finance
Descriptive analysis in finance is using analytics in reporting financial results, from
gathering financial inputs from different sources, cleansing it, to reporting it.
Predictive analysis, on the other hand, is when we want to predict the trend of
sales for the next two months using historical patterns of seasonality, and
examining whether investing a lot in sales people might also drive the sales trend.
Prescriptive analysis is applied when we want to determine the feasibility of the
project, say the likelihood that the project will falter, or overshoot the budget, or
fail. This is with the assumption that we have looked into consideration the various
inputs such as cost of materials, location of project, etc
Applications of Business Analytics in
Human Resources (HR)
Suppose you are an HR manager and you want to understand demographics of the
employees in your company. You may need information on the diversity of the
employees’ location, address, school graduated, etc. This is where descriptive
analysis can be used to manage human resources better. As an HR manager, you
may also want to determine which employees are likely to resign, because
recruiting new people will mean additional cost for the company. You may use
predictive analysis in this case by looking at the historical patterns of resignations
to determine the likely causes of resignations and the number of employees that
are likely to resign in the future. Finally, as an HR manager, you may also want to
determine the drivers that make employees stay in the company. Employee
engagement, such as looking at what makes them content, happy and stay in the
company (ex. party, bonus, free training, etc) is where prescriptive analysis can be
used.
Applications of Business Analytics in
Human Resources (HR)
Suppose you are an HR manager and you want to understand demographics of the
employees in your company. You may need information on the diversity of the
employees’ location, address, school graduated, etc. This is where descriptive
analysis can be used to manage human resources better. As an HR manager, you
may also want to determine which employees are likely to resign, because
recruiting new people will mean additional cost for the company. You may use
predictive analysis in this case by looking at the historical patterns of resignations
to determine the likely causes of resignations and the number of employees that
are likely to resign in the future. Finally, as an HR manager, you may also want to
determine the drivers that make employees stay in the company. Employee
engagement, such as looking at what makes them content, happy and stay in the
company (ex. party, bonus, free training, etc) is where prescriptive analysis can be
used.
Applications of Business Analytics
Marketing
Let’s say you are in charge of monitoring the results of an online marketing and sales
campaign in your company. You can use descriptive analytics to determine how many
people clicked the ads, how many people bought the product, how many people paid
cash-on-delivery, or by credit card. If you want understand how factors (ex. price,
marketing mix and attributing the effect, channels, mode of payment, etc) contribute to
the performance to predict the future performance (success or failure) of a campaign, or
do achieve targets, you can use predictive analytics. Prescriptive analytics in marketing
can be seen through the recommendation engines which are found to be successful in
driving more sales. These are the recommendations that you can see whenever you visit
in an online shopping website, say to buy a book. This recommendation will go something
like “those who bought that book also bought this book”. This recommendation is based
on the prescriptive algorithms which look on the patterns of people who buy the same
product or profiles that look similar or items that are purchased together.
References

"Applications for Business Analytics" by Mr. Dominic Ligot

Chi Square Academy. 2017. Types of Analytics: Prescriptive, Predictive, and Prescriptive.
Accessed:
https://www.chisquareacademy.com/2017/03/31/types-of-analyticsdescriptive-predictive-and-p
rescriptive-analytics/
Dezyre.com. 2018. Types of Analytics: descriptive, predictive, prescriptive analytics.
Accessed:
https://www.dezyre.com/article/types-of-analytics-descriptive-predictiveprescriptive-analytics/2
09
Fundamentals of Business Analytics ,ǁR.N.Prasad & Seema Acharya,Wiley
Publications,2nd Edition,2016.