UNIT – I INTRODUCTION TO BUSINESS ANALYTICS

What is Data Analytics?

Data analytics is the process of analyzing raw data to derive meaningful, actionable insights that can
subsequently be utilized to inform and drive smart business decisions.

Role of Data Analytics:

 Gather Hidden Insights- Data is mined for hidden insights, which are then analyzed in light of
business requirements.
 Generate Reports- Reports are generated from the data and distributed to the appropriate teams
and individuals to deal with additional steps for a successful business.
 Perform Market Analysis- Market analysis can be used to determine the strengths and weaknesses
of competitors.
 Improve Business Requirements- Data analysis enables businesses to better meet the needs and
expectations of their customers.

Data Analytics tools

 Python: This is the most widely used analytics tool for statistics and data modeling. R can be
compiled and run on a variety of systems, including UNIX, Windows, and Mac OS. Python is one
of the most highly paid skills right now in the market that’s why there is a great demand for Python
Training in the industry.
 R programming: Python is an object-oriented programming language that is open source and
simple to learn, develop, and maintain. It includes libraries for machine learning and visualization
such as Scikit-learn, TensorFlow, Matplotlib, Pandas, and Keras.
 Tableau Public: This is a free program that links to any data source, including Excel and corporate
data warehouses. It then generates visualizations, maps, dashboards, and other web-based tools with
real-time changes.
 SAS: This tool, which is a programming language and environment for data manipulation and
analytics, is simple to use and can analyze data from various sources.
 Microsoft Excel: This is a popular data analytics tool. This tool examines tasks that summarize
data with a preview of pivot tables and is mostly used for clients’ internal data.
 Apache Spark: This tool executes applications on Hadoop clusters 100 times quicker in memory
and 10 times faster in storage, making it one of the largest large-scale data processing engines. This
tool is also widely used for developing data pipelines and machine learning models.
Data Analytics Lifecycle :
Phase 1: Discovery –
 The data science team learns 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 Business Analytics

The four most popular types of business analytics are descriptive, diagnostic, predictive, and
prescriptive.

1. Descriptive Analytics

It analyses historical data to determine the response of a unit over a set of given variables. It tracks key
performance indicators (KPIs) for a better understanding of the present state of a business.

Descriptive analytics answers the question, “What happened?”

It involves the following steps:

 Deciding which business metrics will effectively evaluate performance against objectives

 Identifying required data as per the current business state

 Collecting and preparing data using various processes like depublication, transformation, and
cleansing.

 Analyzing data for patterns to measure performance

 Presenting data in charts and graphs to make it understandable for non-analytics experts

2. Diagnostic Analytics

Diagnostic Analytics is one of those business analytics types that help understand why things happened
in the past. Using drill-downs, data mining, data discovery, and correlations, you can comprehend the
driving factors.

Examples of Diagnostic Analytics

 Examining market demand

 Identifying technical issues

 Explaining customer behavior

 Improving organization culture

3. Predictive Analytics

It considers historical data trends for determining the probability of particular future outcomes. It uses
several techniques like data mining, machine learning algorithms, and statistical modeling to forecast the
likelihood of events.
Examples of Predictive Analytics

 Predicting customer preferences

 Detection of employee intentions

 Recommending products

 Predicting staff and resources

4. Prescriptive Analytics

Prescriptive analytics generates recommendations to handle similar future situations relying on past
performances. It employs several tools, statistics, and ML algorithms for the available internal data and
external data.

Examples of Prescriptive Analytics

 Tracking fluctuating manufacturing prices

 Improving equipment management

 Suggest the best course of action

 Price modeling

Business Problem Definition

It defines the problem that a company is facing. Also, it involves an intricate analysis of the
problem, details relevant to the situation, and a solution that can solve the problem.

Data Collection

WHAT IS DATA COLLECTION?

Data collection is the methodological process of gathering information about a specific subject. It’s
crucial to ensure your data is complete during the collection phase and that it’s collected legally
and ethically. If not, your analysis won’t be accurate and could have far-reaching consequences.

In general, there are three types of consumer data:

 First-party data, which is collected directly from users by your organization

 Second-party data, which is data shared by another organization about its customers (or its first-party
data)
 Third-party data, which is data that’s been aggregated and rented or sold by organizations that don’t
have a connection to your company or users
7 DATA COLLECTION METHODS USED IN BUSINESS ANALYTICS
1. Surveys

 Surveys are physical or digital questionnaires that gather both qualitative and quantitative data
from subjects.
 One situation in which you might conduct a survey is gathering attendee feedback after an event.
 This can provide a sense of what attendees enjoyed, what they wish was different, and areas in
which you can improve or save money during your next event for a similar audience.

2. Transactional Tracking

 Each time your customers make a purchase, tracking that data can allow you to make decisions
about targeted marketing efforts and understand your customer base better.

3. Interviews and Focus Groups

 Interviews and focus groups consist of talking to subjects face-to-face about a specific topic or
issue.
 Interviews tend to be one-on-one, and focus groups are typically made up of several people.

4. Observation

 Observing people interacting with your website or product can be useful for data collection
because of the candor it offers.
 If your user experience is confusing or difficult, you can witness it in real-time.

5. Online Tracking

 These are both tools that track users’ online behavior across websites and provide insight into
what content they’re interested in and typically engage with.

6. Forms

 Online forms are beneficial for gathering qualitative data about users, specifically demographic
data or contact information.
 They’re relatively inexpensive and simple to set up, and you can use them to gate content or
registrations, such as webinars and email newsletters.

7. Social Media Monitoring

 Monitoring your company’s social media channels for follower engagement is an accessible way
to track data about your audience’s interests and motivations.
 Data Preparation:

• Data preparation is the process of cleaning and transforming raw data prior to processing
and analysis.

1. Gather data

The data preparation process begins with finding the right data. This can come
from an existing data catalog or data sources can be added ad-hoc.

2. Discover and assess data

After collecting the data, it is important to discover each dataset. This step is
about getting to know the data and understanding what has to be done before the
data becomes useful in a particular context.

3. Cleanse and validate data

Cleaning up the data is traditionally the most time-consuming part of the

data preparation process, but it’s crucial for removing faulty data and filling
in gaps. Important tasks here include:

 Removing extraneous data and outliers

 Filling in missing values
 Conforming data to a standardized pattern
 Masking private or sensitive data entries

4. Store data

 Once prepared, the data can be stored or channeled into a third party
application — such as a business intelligence tool — clearing the way
for processing and analysis to take place.

5. Transform and enrich data

  Data transformation is the process of updating the format or value
entries in order to reach a well-defined outcome, or to make the data
more easily understood by a wider audience. Enriching data refers to
adding and connecting data with other related information to provide
deeper insights.

6. Data validation and publishing - It is the proess of checking the integrity, accuracy and structure
of data before it is used for a business operation.

Business problems

Business problems are obstacles that a business might encounter as they continue to conduct
operations. Learning more about common business problems can help a company develop plans and react to
these obstacles effectively. These types of problems often relate to certain components of a business, such as:

 Strategy
 Service or products
 People
 Processes
 Applications
 Information
 Infrastructure
Benefits of data preparation :
Fix errors quickly — Data preparation helps catch errors before processing. After data has been removed from
its original source, these errors become more difficult to understand and correct.

Produce top-quality data — Cleaning and reformatting datasets ensures that all data used in analysis will be of
high quality.

Make better business decisions — Higher-quality data that can be processed and analyzed more quickly and
efficiently leads to more timely, efficient, better-quality business decisions.

Superior scalability — Cloud data preparation can grow at the pace of the business. Enterprises don’t have to
worry about the underlying infrastructure or try to anticipate their evolutions.

Future proof — Cloud data preparation upgrades automatically so that new capabilities or problem fixes can be
turned on as soon as they are released. This allows organizations to stay ahead of the innovation curve without
delays and added costs.

Accelerated data usage and collaboration — doing data prep in the cloud means it is always on, doesn’t require
any technical installation, and lets teams collaborate on the work for faster results.
 UNIT -2 BUSINESS INTELLIGENCE

Business intelligence:

Business intelligence combines business analytics, data mining, data visualization, data tools and
infrastructure, and best practices to help organizations make more data-driven decisions.

DATA WAREHOUSE

data warehouse is a large centralized repository of data that contains information from many sources
within an organization.

DATA MART:

• A data mart is a data storage system that contains information specific to an organization's business
unit.

DATA WAREHOUSE/BI ARCITECTURE:

1. Collection of data - gathering data from various data sources such as CRM, ERP, databases, files, or APIs,
depending on the requirements and resources of a company. Modern BI software offers a lot of
different, fast, and easy data connectors to make this process smooth and easy
by using smart ETL engines in the background. They enable communication
between scattered departments and systems that would otherwise stay
disparate.

2. Data integration - When data is collected through scattered systems, the next step continues in extracting
data and loading it into a BI data warehouse architecture. This is called ETL (Extract-Transform-Load). The
process is simple; data is pulled from external sources (from step 1) while ensuring
that these sources aren’t negatively impacted by performance or other issues.
Secondly, data conformed to the demanded standard.

3. Data storage - a data warehouse (DWH) has significance in storing all the company’s data (from one or several
sources) in a single place.

4. Analysis of data-we will focus on the analysis of data after it’s handled, processed, and cleaned in former steps
with the help of data warehouse(s). The ubiquitous need for successful analysis for
empowering businesses of all sizes to grow and profit is done through BI
application tools.

5. Data distribution - The most important processes when it comes to sharing information and providing
stakeholders with indispensable insights to obtain sustainable business development

a) Reporting via automated e-mails - Created reports can be shared with selected
recipients on a defined schedule. The dashboards will be automatically
updated on a daily, weekly, or monthly basis which eliminates manual work
and enables up-to-date information.

b) Dash boarding - Another reporting option is to directly share a dashboard in a

secure viewer environment. The users you share with cannot make edits or
 change the content but can use assigned filters to manipulate data and
interact with the KPI dashboard.

C) Embedding & white label BI - This form of data distribution allows you to integrate a
BI system with all its features into your own application. This way, you get all
the benefits of business intelligence (interactive filters, user role management,
live monitoring, etc.) without the need to invest in developing a tool of your own.
Paired with this, a white-labeling option allows you to customize the embedded
dashboard with the colors, logo, and font of the company for an extra
professional look.

6. Reactions based on generated insights - Interactive dashboards display different indicators, analytics metrics,
and other role-relevant data on a single screen.

The final stage wouldn’t be possible and businesses won’t be able to progress.
CEOs, managers, professionals, coworkers, and all the interested stakeholders can
have the power of data to generate valid, accurate, data-based decisions that will
help them move forward.

Data Mart and Data Warehouse Difference

Data Mart

 Focus: A single subject or functional organization area

 Data Sources: Relatively few sources linked to one line of business

 Size: Less than 100 GB

 Normalization: No preference between a normalized and denormalized structure

 Decision Types: Tactical decisions pertaining to particular business lines and ways of
doing things

 Cost: Typically from $10,000 upwards

 Setup Time: 3-6 months

 Data Held: Typically summarized data

Data Warehouse
  Focus: Enterprise-wide repository of disparate data sources

 Data Sources: Many external and internal sources from different areas of an
organization

 Size: 100 GB minimum but often in the range of terabytes for large organizations

 Normalization: Modern warehouses are mostly denormalized for quicker data querying
and read performance

 Decision Types: Strategic decisions that affect the entire enterprise

 Cost: Varies but often greater than $100,000; for cloud solutions costs can be
dramatically lower as organizations pay per use

 Setup Time: At least a year for on-premise warehouses; cloud data warehouses are
much quicker to set up

 Data Held: Raw data, metadata, and summary data

Decision Making
Decision making is the process of making choices by identifying a decision, gathering
information, and assessing alternative resolutions.

Types of Decision Making:

1.Strategic or unstructured (infrequent): Long-term, complex, made by senior managers. Strategic

decisions comprise the highest level of organizational business decisions and are usually less frequent
and made by the organization’s executives. Yet, their impact is enormous and far-reaching.

Some types of strategic decisions include selecting a particular market to penetrate, a company to
acquire, or whether to hire additional staff.

Select a Market

Acquire a Company

Recruit additional staff

2.Tactical or semi structured (more frquent): Tactical decisions (or semistructured decisions) occur
with greater frequency (e.g., weekly or monthly) and fall into the mid-management level. Often,
they relate to the implementation of strategic decisions.

Examples of tactical decisions include product price changes, work schedules, departmental
reorganization, and similar activities.
 Change product pricing

Reschedule work

Reorganize a department

3.Operational or structured: Day-to-day, simple, routine, made by junior managers. usually happen
frequently (e.g., daily or hourly), relate to day-to-day operations of the enterprise, and have a
lesser impact on the organization. Operational decisions determine the day-to-day profitability
of the business, how effectively it retains customers, or how well it manages risk.

Answering a sales inquiry, approving a quotation, or calculating employee bonuses may be

examples of this decision type.

Decision-Making Process
The decision-making process is a term used to describe how a company gets to a point where it
can make the best decision for its company. This process is a way of thinking, a way of seeing the
world, and a method of arriving at what you believe are the best possible decisions.

The decision-making process can be broken down into three steps:

1. Analysis of the current situation.

2. Presentation of the data to the manager, who can take the data and make a decision.

3. Applying the final decision.

Step 1: Identification of the Purpose of the Decision

• In this step, the problem is thoroughly analyzed.

– What exactly is the problem?

– Why the problem should be solved?

– Who are the affected parties of the problem?

– Does the problem have a deadline or a specific time-line?

Step 2: Information Gathering

• To gather as much as information related to the factors and stakeholders involved

in the problem.

• For the process of information gathering, tools such as 'Check Sheets' can be
effectively used.

Step 3: Principles for Judging the Alternatives

• The baseline criteria for judging the alternatives should be set up.

• As an example, profit is one of the main concerns in every decision making

process.
 • Companies usually do not make decisions that reduce profits

Step 4: Brainstorm and Analyze the Choices

• brainstorming to list down all the ideas is the best option.

• Before the idea generation step, it is vital to understand the causes of the problem
and prioritization of causes.

• Cause-and-Effect diagram helps you to identify all possible causes of the problem
and Pareto chart helps you to prioritize and identify the causes with the highest
effect.

Step 5: Evaluation of Alternatives

• Use your judgment principles and decision-making criteria to evaluate each

alternative.

• You need to compare each alternative for their positives and negatives

Step 6: Select the Best Alternative

• The selection of the best alternative is an informed decision since you have already
followed a methodology to derive and select the best alternative.

Step 7: Execute the decision

• Convert your decision into a plan or a sequence of activities.

Step 8: Evaluate the Results

• Evaluate the outcome of the decision.