DADS403: Business Analytics Manipal University Jaipur (MUJ)

MASTER OF BUSINESS ADMINISTRATION

SEMESTER 4

DADS403
BUSINESS ANALYTICS

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DADS403: Business Analytics Manipal University Jaipur (MUJ)

Unit 1
Using Analytics in Business
Table of Contents

SL Fig No / Table SAQ /

Topic Page No
No / Graph Activity
1 Introduction - -
3
1.1 Learning Objectives - -
2 Analytics - - 4
3 Business Analytics - - 5-6
4 Types of Business Analytics - - 7-16
5 Importance and Need of Business Analytics - - 17
6 Analytics in business domains - - 18-19
7 Summary - - 20
8 Self-Assessment Questions - - 21-22
9 Terminal Questions - - 23
10 Answers - -
10.1 Self-Assessment - - 24-26
10.2 Terminal Questions - -
11 Suggested Books and References - - 27

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1. INTRODUCTION
Business analytics is a broad field that encompasses a range of techniques and tools,
including data mining, machine learning, statistical analysis, predictive modelling, and
optimization. It can be applied to a variety of business issues, including increasing
operational effectiveness, comprehending consumer behaviour, spotting market trends, and
forecasting future performance.

Businesses can use business analytics to better understand their operations and customers
so they can make more educated decisions based on facts and evidence. This could enhance
overall corporate performance, boost profitability, and provide businesses a competitive
edge.

For every company that wants to stay competitive and make data-driven decisions that are
supported by research and insights, business analytics is a crucial tool.

1.1 Learning Objectives

After studying this unit, you should be able to:

❖ Explain the concept of Analytics.

❖ Describe Business Analytics
❖ Explain different Business Domains

So, let us start by Business Analytics and its usage.

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2. ANALYTICS
Before starting the term business analytics, we are going to understand the term Analytics.

Analytics is the process of drawing conclusions and knowledge from complicated and
massive datasets using data, statistical techniques, and quantitative analysis. Analytics' main
objective is to turn unstructured data into insightful knowledge that can be applied to
decision-making.

Data collecting, data cleansing, data exploration, data analysis, and data visualisation are just
a few of the tasks involved in analytics. Raw data is obtained from a variety of sources,
including databases, surveys, and websites, during the data collecting phase. In the data
cleaning process, errors, missing numbers, and outliers are checked and either fixed or
removed from the data.

To better comprehend the features of the data, the data exploration phase entails displaying
and summarising it. Using mathematical and statistical models to the data allows you to draw
conclusions, spot trends and relationships, and make forecasts. The ideas and findings are
then presented to stakeholders in an approachable manner via data visualisation.

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3. BUSINESS ANALYTICS
Business analytics is the activity of using quantitative, mathematical, and statistical
techniques to draw insightful conclusions from data and information and to shape business
decisions that are informed by that data. It is the process of finding patterns, trends, linkages,
and insights in huge, complicated datasets using data and statistical techniques, then
employing those insights to boost company performance.

Business analytics' major objective is to enhance decision-making by giving organisations

actionable insights that help them better understand their consumers, streamline
operations, and boost overall performance. Businesses may foresee future trends, find areas
for development and optimization, and create growth-promoting plans with the use of
business analytics.

Thus Business analytics specifically refers to:

• Accepting and processing archived business data.
• Analysing the data through trends and patterns for recognizing the causes and effects
impacting our business
• Designing of a decision support system for taking business decisions during various
situations.

As per the technical definition by Gartner “Business Analytics is a collection of solutions used
to build analytical model and simulators for creating scenarios or case studies for predicting
the future aspects of business”

Data collection, analysis, and interpretation for the purpose of improving business choices is
referred to as business analytics. It involves several various elements, each of which is
essential to comprehending and improving business success. Following are some
representations of the various elements of business analytics:
• Descriptive Analytics: Analysing historical data is part of descriptive analytics, which
helps us understand what has happened in the past. For instance, a retailer might
examine sales information from the previous year to identify the most popular
products and the best-performing outlets.

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• Diagnostic analytics: This section entails data analysis to determine the cause of an
event. For instance, a company might examine customer information to see why sales
for a certain product or location have decreased.
• Predictive Analytics: Using statistical models to forecast what is most likely to occur in
the future is known as predictive analytics. Using previous data and industry patterns,
a company can utilise predictive analytics to project revenues for the upcoming
quarter.
• Prescriptive analytics is a part of analytics that uses data to suggest a course of action.
Prescriptive analytics, for instance, can be used by a company to establish the best price
for a product based on consumer demand and rival pricing.
• Data Visualisation: Charts, graphs, and other visual tools are used in data visualisation
to help businesses understand and present complicated data. For instance, a company
might utilise a dashboard to display important performance indicators like sales,
revenue, and client happiness.
• Data mining: This step uses statistical models and algorithms to find patterns and
insights in huge datasets. For instance, a company might utilise data mining to find
consumer groups with comparable buying patterns so that marketing campaigns can
be more successfully tailored.

Ultimately, every aspect of business analytics contributes in a different way to assisting

organisations in bettering their decision-making and understanding of their data. These
elements can be combined to help firms better understand their operations and provide
better results.

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4. TYPES OF BUSINESS ANALYTICS

We can classify the business analytics under the following terms:
• Descriptive Analytics
• Diagnostic Analytics
• Predictive Analytics
• Prescriptive Analytics

Descriptive Analytics
It is the simplest form of data analytics where summarization of data is done for making an
analysis. The goal of descriptive analytics is to understand the past by examining historical
data. This aspect of analytics can aid firms in making better decisions by providing data-
driven insights in a range of business scenarios. Here are some instances of how descriptive
analytics have been used:
• Sales analysis: To determine which goods are selling the most, which stores are
performing the best, and which regions are generating the most income, a company
may utilise descriptive analytics to evaluate its sales data.
• Website analytics: To determine which pages are receiving the most views, which
sources are generating the most traffic, and which keywords are generating the most
search traffic, a business may employ descriptive analytics to evaluate its website
traffic data.
• Financial analysis: To understand its sales, expenses, profits, and cash flow, a company
may utilise descriptive analytics to evaluate its financial data. The results of this study
can be used to make financial planning and budgeting decisions as well as discover
trends and patterns in financial performance.
• Customer analysis: To better understand customer behaviour, preferences, and
purchasing patterns, a firm may utilise descriptive analytics to study customer data.
This study can increase customer service and retention while informing marketing and
sales strategy.
• Operations analysis: To understand efficiency, productivity, and quality measures, a
company may utilise descriptive analytics to evaluate operational data. This study can

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support operational decision-making by highlighting areas that could use

improvement.

Descriptive analytics is a useful tool for companies trying to understand their data better
and apply that understanding to produce better results. Businesses can find trends, patterns,
and insights that help them make decisions and perform better by examining historical data.

This information later can be used to identify the strengths and weakness of the company or
organization. Further, it helps us in framing the policies and structure so that higher growth
can be achieved.

The common tools used in descriptive analytics involves the following:

• Business intelligence (BI) tools: These are software programmes that assist
organisations in data analysis, report writing, and visualisation. These tools can be used
to create scorecards and dashboards that highlight trends and patterns in data as well
as key performance measures.These technologies can be used to produce graphs,
charts, and other visual representations of data that are simpler to comprehend and
analyse.
• Spreadsheet programmes: Microsoft Excel and other spreadsheet programmes are
frequently used for undertaking descriptive analytics. Spreadsheets can be used by
businesses to organise and analyse data, make graphs and charts, and produce reports.
• Statistical software: To perform more intricate analysis of data, statistical software like
R or SAS can be utilised. Regression analysis, time series analysis, and other statistical
analyses can be carried out using these tools.
• Data mining software: To find patterns and insights in huge datasets, data mining
software such as IBM SPSS Modeler or RapidMiner can be utilised. These tools utilise
machine learning and algorithmic techniques to find hidden links and patterns in data.

Generally, firms can undertake descriptive analytics using a wide range of methods. The
particular requirements of the business, the complexity of the data, and the level of skill of
the analysts conducting the analysis will all influence the tool selection.

The technologies and software's that are used in descriptive analysis includes the following:

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• Spreadsheet software: You can organise and summarise data using spreadsheet
programmes like Microsoft Excel or Google Sheets, compute descriptive statistics like
means and standard deviations, and make simple charts and graphs.
• Tools for business intelligence: Interactive dashboards and reports may be made using
BI tools like Power BI, Tableau, or QlikView, allowing users to explore and analyse data
in greater detail.
• Statistical software: More complex descriptive analyses, such as regression analysis,
ANOVA, and factor analysis, can be carried out using statistical software like R, SAS, or
SPSS.
• Geographic information systems (GIS): GIS applications like ArcGIS or QGIS allow users
to build maps and spatial visualisations that may be used to explore and analyse spatial
data.
• Data visualisation tools: To design unique visuals that clearly convey insights from the
data, data visualisation tools like D3.js, Plotly, or ggplot2 can be utilised.
• Text analytics software: To analyse and compile textual data, including sentiment
analysis, topic modelling, and clustering, text analytics software can be utilised, such as
RapidMiner or KNIME.
• Data mining software: Market basket analysis, decision trees, and clustering are just a
few examples of the patterns and relationships that may be found in massive datasets
using data mining software like IBM SPSS Modeler or RapidMiner.

These are just a few examples of technologies and software that can be used for descriptive
analysis. The choice of software and technology will depend on the specific needs of the
project and the level of expertise of the user.

Diagnostic Analytics
Business analytics that analyse data to determine why something occurred is known as
diagnostic analytics. In order to determine the fundamental causes of trends and patterns in
data, it goes beyond descriptive analytics, which concentrates on what occurred. This
scheme is also known as advance form of analytics. The objective of this scheme is to find the
root cause of occurrence of any event or trend. This approach is used by organizations to

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redress the issues of the company. Here are some instances of how diagnostic analytics are
put to use and applied:
• Customer churn analysis: A company may employ diagnostic analytics to learn why
customers are leaving. A company can uncover typical reasons for churn, such as poor
customer service or concerns with product quality, by analysing customer data, and
take action to solve such issues.
• Supply chain analysis: To identify the causes of delays or disturbances in its supply
chain, a business may employ diagnostic analytics. A company can locate supply chain
bottlenecks and take action to increase efficiency by examining data on inventory
levels, shipment durations, and other variables.
• Quality control analysis: To identify the causes of product quality problems, a company
may employ diagnostic analytics. A company can pinpoint the main causes of quality
problems and take action to enhance product quality by examining data on
manufacturing procedures, product flaws, and customer complaints.
• Website performance analysis: To determine why its website is not operating as well
as required, a business may employ diagnostic analytics. Using information on website
traffic, bounce rates, and user behaviour, a company can pinpoint problems with the
layout or content of a website that might be hindering performance.
• Financial performance analysis: To determine why a company's financial performance
is falling short of expectations, diagnostic analytics may be used. A company can spot
potential areas of overspending or underperformance and take action to enhance
financial performance by evaluating data on revenue, expenses, and other financial
parameters.

Businesses that want to comprehend the underlying reasons of data trends and patterns
might benefit greatly from diagnostic analytics. Businesses can take targeted action to solve
performance concerns and enhance outcomes by pinpointing the root causes of those
difficulties.

Diagnostic analytics is the practise of looking at data to determine why specific prior
occurrences took place. Retrospective analysis aids in locating the source of a problem or

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provides information about an organization's historical performance. Typical diagnostic

analytics tools include the following:
• A Pareto chart: It is a visual representation that lists issues in terms of their relative
size or frequency in decreasing order of importance. Identifying the most important
causes of a problem is helpful. For instance, the most frequent flaws in a manufacturing
process can be found using a Pareto chart.
• A scatter plot: It is a graph that illustrates the association between two variables. It aids
in determining whether there is or is not a correlation between two variables. A scatter
plot, for instance, can be used to examine the connection between an organization's
advertising expenditure and sales revenue.
• Histogram: A histogram is a chart that displays how data are distributed. It is useful to
know how frequently a specific value or range of values occurs. A histogram, for
instance, can be used to examine how staff pay are distributed within an organisation.
• Box Plot: A box plot is a type of graph used to display data distribution and spot outliers.
It is useful to determine whether a specific data point differs considerably from the rest
of the data. An analysis of the distribution of customer satisfaction ratings for a product,
for instance, can be done using a box plot.
• Root Cause Analysis: Root cause analysis is the process of figuring out what caused a
problem or an event in the first place. Finding the causes of the issue and coming up
with a remedy to stop it from happening again are both beneficial. Root cause analysis,
for instance, can be used to determine why a project exceeded its budget or why a
product was recalled.

Depending on the kind of research you're undertaking, a variety of software tools can help
you conduct diagnostic analysis. Here are a few illustrations:
• SPSS (Statistical Package for the Social Sciences): Software for statistical analysis, data
management, and data visualisation is called SPSS. It is frequently employed in social
science research and is versatile when it comes to data analysis activities.
• MATLAB: Data analysis, simulation, and visualisation can all be done using the
numerical computer programme MATLAB. It is frequently employed in physics,
engineering, and other scientific disciplines.

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• R: This software for statistical computation and graphics is available for free and open-
source. It is widely used in data science, machine learning, and other fields.
• Excel: Excel may be used for a variety of data analysis tasks, including statistical
analysis and data visualisation, despite not being especially created for this purpose.
• Tableau: It is a programme for data visualisation that makes it possible to interactively
display data so you may explore and examine it more easily.
• SAS (Statistical Analysis System): Data administration, statistical analysis, and
predictive modelling are all performed using the software suite SAS (Statistical Analysis
System). It is frequently applied to commercial and medical research.
• Stata: It is a statistical software programme used for data administration, analysis, and
visualisation. Research in the social sciences frequently employs it.

These are just a few examples of software programs that can be used for diagnostic analysis.
The choice of software will depend on the specific analysis you are conducting, your level of
expertise, and other factors.

Predictive Analytics
The process of making predictions about the course of future events or outcomes using
statistical algorithms and machine learning techniques is known as predictive analytics.
There are many uses for predictive analytics in various industries, some of them includes:
• Marketing and sales: Predictive analytics is frequently used in marketing and sales to
assist companies in identifying potential clients, streamlining pricing plans, and
developing specialised ad campaigns. Predictive analytics, for instance, is used by
businesses like Amazon to suggest products to customers based on their past purchases
and browsing patterns.
• Healthcare: To forecast patient outcomes and identify patients who are at risk of
contracting particular diseases, predictive analytics is employed in the industry. To
identify patients who are at danger of getting sepsis, for instance, a hospital might
employ predictive analytics. This would enable early intervention and treatment.
• Finance: In the financial industry, predictive analytics is used to forecast stock values,
identify credit risk, and spot fraud. Predictive analytics may be used by credit card
firms, for instance, to spot fraudulent transactions and stop unlawful purchases.

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• Manufacturing: To improve production procedures and avoid equipment failure,

manufacturing uses predictive analytics. Predictive analytics can be used in a
manufacturing facility, for instance, to schedule maintenance before a piece of
equipment fails and delays output.
• Sports: To forecast game results and identify athletes who are likely to perform well,
sports use predictive analytics. Predictive analytics might be used by a sports club, for
instance, to determine which players are more likely to score during a match and
modify their starting lineup appropriately.

Predictive analytics can be applied to practically any business where data is available and
has a wide range of uses. Businesses can improve their judgements, streamline their
operations, and acquire a competitive edge in their sector by studying historical data and
forecasting future events.

Sentiment analysis is one of the common examples under this scheme. To do this, one needs
to collect the social media data and make an analysis on its usage for getting desired results
i.e. a sentimental analysis is done to know about the user opinion about social media
contents.

Since, predictive analysis involves analysing data and making predictions about future
events or behaviours using a variety of approaches and algorithms, there are numerous tools
and technologies that are available which can automate the process of performing predictive
analysis. Some of them includes:

Machine learning libraries: These are collections of programmes that offer a range of
algorithms and methods for carrying out tasks like classification, regression, clustering, and
other types of machine learning. Scikit-learn, TensorFlow, PyTorch, and Keras are a few
examples.
• Business intelligence (BI) tools: These are software programmes that assist firms in
data analysis and data visualisation so they can make wise decisions. Tableau, Microsoft
Power BI, and QlikView are a few examples of them.

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• Software for data mining: This programme analyses data using algorithms to find
patterns that can be utilised in predictive modelling. Examples include SAS Enterprise
Miner, KNIME, and RapidMiner
• Statistical software: This refers to software programmes that enable statisticians and
data analysts to conduct statistical analyses on data. R, SPSS, and Stata are among
instances.
• Platforms for predictive analytics: These are computer programmes that offer complete
solutions for conducting this type of analysis, from preparing the data to developing
and deploying models. DataRobot, H2O.ai, and Alteryx are a few examples.
• Predictive analytics tools in the cloud: These are software programmes that enable
users to do analysis on cloud-based platforms. Examples include Amazon SageMaker,
Google Cloud AI Platform, and Microsoft Azure Machine Learning.
• Natural language processing (NLP) software: These are software applications that use
machine learning algorithms to analyze and interpret natural language data. Examples
include IBM Watson, Google Cloud Natural Language API, and NLTK.

Overall, there are a variety of software and technologies available to perform predictive
analysis, and the choice of which to use depends on the specific needs and requirements of
the user.

Prescriptive Analytics
Prescriptive analytics is a branch of advanced analytics that produces suggestions for the
best course of action to accomplish a particular business goal using a combination of
historical data, real-time data, and sophisticated algorithms. Prescriptive analytics offers
actionable insights on what steps to take to improve outcomes, in contrast to descriptive and
predictive analytics, which concentrate on describing what has happened and forecasting
what will happen, respectively. Through this method we can get recommendations on how
to resolve the issues or concerns associated with our business It suggests all the outcomes
according to the specific manners which need to be take care off. Here we build the data to
answer the questions like “What should we do next?”.

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Strong feedback system and constant repeated analysis are the two main components under
this scheme. Here we focused on the findings of the relationship between activity and its
outcomes.

Prescriptive analytics can be applied in business in the following ways, as examples:

Supply Chain Management: By advising the ideal inventory levels, delivery schedules, and
production methods based on variables like consumer demand, supplier capacity, and
transportation costs, prescriptive analytics can assist firms in optimising their supply chains.
Prescriptive analytics, for instance, can be used by a shipping company to choose the best
delivery routes based on current traffic and weather information.
• Marketing: By suggesting the optimum channels, messages, and window of opportunity
to reach their target demographic, prescriptive analytics can help firms optimise their
marketing initiatives. Prescriptive analytics, for instance, can be used by a shop to
choose the best pricing and marketing tactics for the launch of a new product based on
past sales data, consumer preferences, and rival pricing.
• Healthcare: By suggesting the optimal treatment methods based on aspects including
the patient's history, symptoms, and medical conditions, prescriptive analytics can
assist healthcare providers in improving patient care. Prescriptive analytics, for
instance, can be used by a hospital to choose the best course of action for a patient with
a chronic illness based on genetic information and the outcomes of clinical trials.
• Finance: Based on market trends, consumer behaviour, and legal requirements,
prescriptive analytics can assist financial organisations enhance their risk management
strategies by suggesting the optimum investment portfolios, credit policies, and fraud
detection techniques. For instance, given on a client's risk appetite and investment
objectives, a bank may utilise prescriptive analytics to establish the ideal mix of stocks,
bonds, and other assets for the client's portfolio.

Prescriptive analytics can be used to improve decision-making in a variety of functional

areas, including operations, marketing, finance, and healthcare, and has a wide range of
commercial applications. Prescriptive analytics can assist firms in making better decisions,
lowering expenses, and enhancing performance by offering actionable insights on the
optimal course of action.

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To perform prescriptive analysis, there are several software and technologies available that
can help automate the process and make it easier to extract insights from data:
• Software for optimization is created to evaluate all potential solutions and choose the
most suitable one in order to find the best one for a certain issue. Examples include
Gurobi, FICO Xpress, and IBM CPLEX.
• Software for simulation: This software is used to model a system and simulate its
behaviour in a variety of situations in order to produce suggestions for the best course
of action. Arena, Simio, and AnyLogic are a few examples.
• Software for managing decisions: This programme offers a framework for making
judgements based on facts, regulations, and commercial goals. IBM Decision Manager,
SAS Decision Manager, and FICO Blaze Advisor are a few examples.
• Platforms for predictive analytics: They are computer programmes that offer complete
prescriptive analytical workflows, from data preparation to model development and
deployment. DataRobot, H2O.ai, and Alteryx are a few examples.
• Tools for prescriptive analytics on the cloud: These are computer programmes that
enable users to conduct prescriptive analysis on cloud-based systems. Examples
include Amazon SageMaker, Google Cloud AI Platform, and Microsoft Azure Machine
Learning.
• Business intelligence (BI) tools are software programmes that assist firms in data
analysis and data visualisation so they can make wise decisions. Tableau, Microsoft
Power BI, and QlikView are a few examples.

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5. IMPORTANCE AND NEED FOR BUSINESS ANALYTICS

Business analytics is the procedure for gathering, handling, and analysing data in order to
generate insights and make wise business decisions. Businesses now must rely on analytics
to be competitive and make data-driven decisions in a world that is increasingly driven by
data. Business analytics is important as they aid in:
• Data-driven decision making: Business analytics enables organisations to base choices
on facts rather than hunches or speculation. Businesses can find patterns, trends, and
insights through data analysis that can help them make better decisions and get better
results.
• Performance improvement: Business analytics may assist organisations in determining
their strong points and places for development. Through the optimization of their
operations, goods, and services, they may be able to improve their financial results and
expand their market share.
• Competitive advantage: By spotting market trends, consumer preferences, and other
opportunities that their rivals might not be aware of, business analytics can give
organisations a competitive edge. This can assist companies in staying innovative and
positioning themselves for success.
• Resource optimization: By helping companies manage resources more effectively,
business analytics can lower costs and boost productivity. Businesses can determine
where they are over or underinvesting by evaluating data and then make the necessary
corrections.
• Risk management: Business analytics may assist organisations in identifying possible
hazards and proactively implementing mitigation strategies. By doing this, firms may
reduce the impact of unforeseen events and prevent expensive blunders.

Business analytics are crucial because they can give organisations a competitive edge by
assisting them in making better decisions, enhancing performance, and enhancing
profitability. Businesses may streamline processes, boost productivity, and better serve
client needs by utilising data and analytics solutions.

Some real time examples explaining the need for Business Analytics:

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6. ANALYTICS IN BUSINESS DOMAIN

Business analytics is used in a wide range of industries and domains to help organizations
make data-driven decisions. Here are some examples of different domains where business
analytics is used:
• Finance: Business analytics is used in the finance industry to evaluate financial data,
spot trends and patterns, and project future financial performance. A financial
institution might utilise business analytics, for instance, to forecast loan default rates,
enhance investment portfolios, or spot fraud.
• Marketing: To study consumer behaviour, pinpoint customer segments, and create
specialised marketing efforts, business analytics is frequently utilised in the marketing
industry. For instance, a retailer might employ business analytics to examine past
consumer purchases and create tailored marketing efforts based on their preferences.
• Operations: By evaluating operational data and pinpointing opportunities for
improvement, business analytics is utilised in the operations domain to increase
productivity and efficiency. A manufacturing organisation, for instance, might employ
business analytics to streamline operations, cut waste, and enhance quality assurance.
• Human Resources: HR professionals utilise business analytics to examine employee
data, spot trends, and make fact-based decisions regarding hiring, performance
evaluation, and employee retention. For instance, a business may utilise business
analytics to pinpoint the traits of successful workers and then use that knowledge to
enhance hiring procedures
• Healthcare: To analyse patient data, spot health patterns, and improve healthcare
delivery, the healthcare sector uses business analytics. Business analytics can be used
by a hospital, for instance, to pinpoint patients who are at a high risk of readmission, to
optimise staffing levels, and to enhance patient outcomes.
• E-commerce: To monitor consumer behaviour, enhance pricing tactics, and enhance
the customer experience, the e-commerce industry uses business analytics. An online
shop might, for instance, utilise business analytics to evaluate client browsing and
purchasing patterns, create targeted promotions, and improve pricing methods in
order to increase sales..

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Case Study- Walmart

Walmart, the biggest retailer in the world, is one instance of a real-world case study where
business analytics was applied to address a business issue. Walmart sought to cut expenses
and boost customer satisfaction by streamlining their supply chain and inventory
management.Walmart started employing business analytics to collect information on sales,
inventory levels, and customer demand in order to do this. Using this information, they later
created predictive models that could forecast demand and optimise inventory levels. As a
result, Walmart was able to lower the cost of its inventory while assuring that top-selling
items were constantly in stock. Also, Walmart used business analytics to analyse the
performance of their suppliers and transportation partners in order to optimise their supply
chain. They improved delivery times and cut costs by using data analytics to locate
bottlenecks and inefficiencies in their supply chain.Walmart's efforts allowed them to lower
inventory expenses by $3 billion while also enhancing the effectiveness of their supply chain
and customer service. Walmart was able to keep one step ahead of the competition and hold
onto their position as the largest retailer in the world by employing business analytics to
streamline their processes.

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7. SUMMARY
• Data analytics means analyzing the data and get future predictions from it.
• Business analytics means analyzing the data for business purposes and get future
predictions for enhancing our business capabilities.
• By Gartner “Business Analytics is a collection of solutions used to build analytical model
and simulators for creating scenarios or case studies for predicting the future aspects
of business”
• We can classify the business analytics under the following terms:
• Descriptive Analytics
• Diagnostic Analytics
• Predictive Analytics
• Prescriptive Analytics
• Descriptive analytics -What happen?
• Diagnostic Analytics- Why did it happened?
• Predictive Analytics- What might happen in the future?
• Prescriptive Analytics- What should we do next?
• Some of the Business Domains are mentioned below:
o Finance
o Marketing
o Human Resource Management
o Operations
o E Commerce

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8. SELF-ASSESSMENT QUESTIONS

1. What is the main objective of analytics?

A) To simplify data
B) To turn unstructured data into actionable insights
C) To collect as much data as possible
D) To create complex data models
2. Which phase involves correcting errors, missing numbers, and outliers in data?
A) Data collection
B) Data cleaning
C) Data exploration
D) Data visualization
3. Which type of analytics helps in understanding what has happened in the past using
historical data?
A) Predictive Analytics
B) Diagnostic Analytics
C) Descriptive Analytics
D) Prescriptive Analytics
4. What is an example of diagnostic analytics?
A) Analyzing customer data to see why sales have decreased
B) Predicting sales for the next quarter
C) Determining the best price for a product
D) Analyzing sales data from the previous year
5. What does prescriptive analytics suggest?
A) Causes of past events
B) Future trends
C) Courses of action to take
D) Historical patterns
6. Which tool is commonly used for descriptive analytics?
A) IBM SPSS Modeler
B) Microsoft Excel
C) SAS
D) H2O.ai
7. What is the goal of predictive analytics?
A) To describe what has happened
B) To prescribe actions
C) To predict future outcomes
D) To diagnose issues
8. In business analytics, what is meant by "data-driven decision making"?
A) Decisions based solely on intuition

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B) Decisions made without any data

C) Decisions influenced by detailed data analysis
D) Decisions that disregard data insights
9. Which business analytics type focuses on identifying the causes of events?
A) Descriptive
B) Diagnostic
C) Predictive
D) Prescriptive
10. What does the Gartner definition emphasize about business analytics?
A) It focuses only on past data.
B) It's a collection of solutions for creating analytical models.
C) It does not support decision-making.
D) It is unrelated to business operations.
11. What is NOT a focus area of business analytics?
A) Data visualization
B) Predicting social trends
C) Improving decision-making
D) Creating products
12. How does prescriptive analytics differ from predictive analytics?
A) It describes past events rather than future events.
B) It offers specific recommendations for actions.
C) It only uses historical data.
D) It is less accurate in forecasting.
13. What kind of software is used for data visualization in business analytics?
A) Decision management software
B) Simulation software
C) Business intelligence tools
D) Optimization software
14. Which analytics helps in understanding customer behavior and trends in the
marketing sector?
A) Predictive Analytics
B) Diagnostic Analytics
C) Descriptive Analytics
D) Prescriptive Analytics
15. What role does business analytics play in resource optimization?
A) It increases resource consumption.
B) It helps manage resources more effectively.
C) It disregards resource usage.
D) It focuses only on human resources.

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9. TERMINAL QUESTIONS
Short Answer Questions
Q.1 Define Business Analytics.
Q.2 What is Data Mining. How it is different from Data ware house?
Q.3 Differentiate between R and Python?
Q.4 Explain all the Business domain?
Q.5 Explain Business analytics in Financial and IT-Industry?
Q.6 Write a short note on Supply Chain management?

Long Answer Questions

Q.1. State the difference between Business Analytics and Analytics?
Q.2 Explain the components of Business analytics?
Q.3 Explain types of Business Analytics?
Q.4 Explain some basic tools of Business Analytics?
Q.5 Write a short note on Business analytics in Ecommerce and Manufacturing?

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10. ANSWERS
10.1 Self-Assessment
1. B) To turn unstructured data into actionable insights
2. B) Data cleaning
3. C) Descriptive Analytics
4. A) Analyzing customer data to see why sales have decreased
5. C) Courses of action to take
6. B) Microsoft Excel
7. C) To predict future outcomes
8. C) Decisions influenced by detailed data analysis
9. B) Diagnostic
10. B) It's a collection of solutions for creating analytical models.
11. D) Creating products
12. B) It offers specific recommendations for actions.
13. C) Business intelligence tools
14. A) Predictive Analytics
15. B) It helps manage resources more effectively.
10.2 Terminal Questions
Short Answer
Ans 1: Analyzing the data through trends and patterns for recognizing the causes and effects
impacting our business [Refer Sec 2]

Ans 2: This is a technique of data arrangement where we sort the huge data sets such that
one can identify the trends and patterns from the data set. This helps in solving various
problems associated with our businesses. [Refer Sec 2]

Ans 3: R is a programming language for statistical analysis and graphical representation of

data sets. R was developed by Ross Ihaka and Robert Gentleman in University of Auckland
New Zealand. This is an open source language available freely. The graphical and data
visualization are the strongest points of R Language.

Python is an open source programming language used to develop web enabled programme.
In addition to this it is also used for software development and data science programming.

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This is mostly used when we want to do data analysis by using statistical techniques. It was
introduced in 1991 by Guido Van Rossum [Refer sec 2]

Ans 4: There is a wide variety of business domain some of them are mentioned below:
• Financial services
• IT- Industry
• Supply Chain
• E-Commerce
• Manufacturing [Refer Sec 3]

Ans 5: In Financial Services, we do analytics to find the financial implications on the

organization or the company. Here, we will check the data pertaining to income, tax
accountability, cost of investment, and other expenses charged in the business In this we also
check the adaptability of risks associated with various operations.

For observing organizational changes we can use big data analytics, statistical analytics and
data visualization techniques. Role of IT industry is very important in delivering analytical
tools for business organizations. IT Industry is the essential part of doing business analytics.
[Refer sec 4]

Ans 6: Analytics in supply chain allows our businesses to better forecast the future. The
Supply chain system always generates the data in gigantic form. While making analytics the
supply chain industry gets benefited in the following terms: [Refer sec 4]

Long Answer(s)
Ans.1 Data analytics means analyzing the data and get future predictions from it whereas
business analytics means analyzing the data for business purposes and get future predictions
for enhancing our business capabilities. [Refer sec 2]

Ans.2 [Refer Sec 1.2]

Ans 3: We can classify the business analytics under the following terms:

We can classify the business analytics under the following terms:

• Descriptive Analytics

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• Diagnostic Analytics
• Predictive Analytics
• Prescriptive Analytics

[Refer Sec 1.2]

Ans 4: Most of the business analytics tools can be obtained from various open source
platforms (i.e. no need to pay any amount). [Refer Sec 1.4]

Ans 5: E-Commerce is selling or buying electronically. So, one always needs an analytics in
E-commerce process to achieve higher strength in our business model.

Manufacturing analytics, Manufacturer is a person or a company engaged with creation of

finished products and sell them to the distributer after getting a reasonable price. Later,
these products or goods are sold to the customers. Therefore, selling of products is one major
concern where analytics can help. [Refer sec 1.14]

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11. SUGGESTED BOOKS AND REFERENCE(S)

1. Marketing Models (Kotler, Lilien, Moorthy)
1. Measuring Marketing: 101 key metrics every marketer needs (Davis)Marketing
Analytics, Wayne L Winston, Wiley

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