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Business Analytics
Business analytics (BA) refers to the skills, technologies, practices for continuous iterative
exploration and investigation of past business performance to gain insight and drive business
planning. Business analytics focuses on developing new insights and understanding of business
performance based on data and statistical methods. In contrast, business intelligence traditionally
focuses on using a consistent set of metrics to both measure past performance and guide business
planning, which is also based on data and statistical methods.
Business analytics makes extensive use of statistical analysis, including explanatory
and predictive modeling, and fact-based management to drive decision making. It is therefore
closely related to management science. Analytics may be used as input for human decisions or
may drive fully automated decisions. Business intelligence is querying, reporting, online
analytical processing (OLAP), and "alerts".

Example of Application
Banks, such as Capital One, use data analysis (or analytics, as it is also called in the business
setting), to differentiate among customers based on credit risk, usage and other characteristics
and then to match customer characteristics with appropriate product offerings. Harrahs, the
gaming firm, uses analytics in its customer loyalty programs. E & J Gallo Winery quantitatively
analyses and predicts the appeal of its wines. Between 2002 and 2005, Deere & Company saved
more than $1 billion by employing a new analytical tool to better optimize inventory. A telecoms
company that pursues efficient call center usage over customer service may save money.

Types of Analytics
Decision Analytics: supports human decisions with visual analytics that the user models
to reflect reasoning.
Descriptive Analytics: gains insight from historical data with reporting,
scorecards, clustering etc.
Predictive Analytics: employs predictive modeling using statistical and machine
learning techniques.
Prescriptive Analytics: recommends decisions using optimization, simulation, etc.
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10 Most Popular Analytics Tools in Business

There are mainly two types of Analytics tools:-
a) Open source Analytic tools
b) Commercial Analytic tools

A. Open Source Analytics Tools

i. R R is now the most popular analytics tool in the industry. It has surpassed SAS in
usage and is now the tool of choice even for companies that can easily afford SAS. Over
the years, R has become a lot more robust. It handles large data sets much better than it
used to, say even a decade earlier. It has also become a lot more versatile. 1800 new
packages were introduced in R between April 2015 and April 2016. The total number of
R packages is now over 8000. There are some concerns about the sheer number of
packages but this has certainly added a lot to Rs capabilities. R also integrates very well
with many Big Data platforms which has contributed to its success.

ii. Python Python has been a favorite of programmers for long. This is mainly because
its an easy to learn language that is also quite fast. However, it developed into a
powerful analytics tool with the development of analytical and statistical libraries like
numpy, scipy etc. Today it offers a comprehensive coverage of statistical and
mathematical functions. Increasingly, we are seeing programmers and other tech folks
moving into analytics. Most of these guys are already familiar with Python and therefore
it has become a tool of choice for many data scientists.

iii. Apache Spark Spark is another open source processing engine that is built with a
focus on analytics, especially on unstructured data or huge volumes of data. Spark has
become tremendously popular in the last couple of years. This is because of various
reasons easy integration with the Hadoop ecosystem being one of them. Spark has its
own machine learning library which makes it ideal for analytics as well.

iv. Apache Storm Storm is the Big Data tool of choice for moving data or when the data
comes in as a continuous stream. Spark works on static data. Storm is ideal for real time
analytics or stream processing.

v. PIG and HIVE Pig and Hive are integral tools in the Hadoop ecosystem that reduce
the complexity of writing MapReduce queries. Both these languages are like SQL (Hive
more so than Pig). Most companies that work with Big Data and leverage the Hadoop
platform use Pig and/or Hive.
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B. Commercial Analytics Tools

i. SAS SAS continues to be widely used in the industry. Some flexibility on pricing from
the SAS Institute has helped its cause. SAS continues to be a robust, versatile and easy to
learn tool. SAS has added tons of new modules. Some of the specialized modules that
have been added in the recent past are SAS analytics for IOT, SAS Anti-money
Laundering, and SAS Analytics Pro for Midsize Business.
ii. Tableau Tableau is an easy to learn tool that does an effective job of slicing and
dicing your data and creating great visualizations and dashboards. Tableau can create
better visualizations than Excel and can most definitely handle much more data than
Excel can. If you want interactivity in your plots, then Tableau is surely the way to go.
iii. Excel Excel is of course the most widely used analytics tool in the world. I have
seldom come across a data scientist who does not use Excel. Whether you are an expert
in R or Tableau, you will still use Excel for the grunt work. Non-analytics professionals
will usually not have access to tools like SAS or R on their machines. But everyone has
Excel. Excel becomes vital when the analytics team interfaces with the business steam.
iv. QlikView Qlikview and Tableau are essentially vying for the top spot amongst the
data visualization giants. Qlikview is supposed to be slightly faster than Tableau and
gives experienced users a bit more flexibility. Tableau has a more intuitive GUI and is
easier to learn.
v. Splunk Splunk is more popular than some of the more known names like Cloud era
and Hortonworks. It started as a Google for log files which means its primary use was
to process machine log files data. It has now become much more than that. Splunk has
great visualization options and a web interface makes it easy to use.
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Top Companies Using the most popular Analytics Tools

Popular Analytics Tools Top Companies using them
Open Source
R Accenture, Cognizant, Google, Facebook
Python Alibaba, Google, TCS
Apache Spark Uber, Pinterest, Ola, Wipro
Apache Storm Groupon, Yahoo, Twitter
PIG & HIVE Yahoo, Baidu, Flipkart

Commercial

SAS HSBC, Citibankm Gallup, Netflix, WNS,

HDFC
Tableau Barclays, Gallup, HP

Excel Almost every company known to

mankind
Qlikview TCS, Capgemini, Cisco

Splunk Adobe, Nasdaq, Coca-Cola

SAS (Software)

SAS (previously "Statistical Analysis System") is a software suite developed by SAS

Institute for advanced analytics, multivariate analyses, business intelligence, data management,
and predictive analytics.SAS was developed at North Carolina State University from 1966 until
1976, when SAS Institute was incorporated. SAS was further developed in the 1980s and 1990s
with the addition of new statistical procedures, additional components and the introduction
of JMP. A point-and-click interface was added in version 9 in 2004. A social media
analytics product was added in 2010.
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Mission
SAS dlivers proven solutions that drive innovation and improve performance.

Company Facts:-
SAS has customers in 148 countries.
SAS is installed at more than 83000 business, government and university sites.
94 of the 100 companies of the 2016 Fortune Global 500 are SAS customers.
13984 worldwide Employees.
Top Companies using SAS are : HDFC, HSBC, Netflix etc.

HDFC
As one of Indias largest banking institutions, HDFC Bank has embraced sophisticated
information technology to pursue its expansion from corporate banking to become a world-class
provider of wholesale and retail financial services. SAS provides a broad range of analytics to
help HDFC Bank make credit decisions, enhance its cross-sell and up-sell marketing, and
comply with strict regulations.

In the mid-1990s, the Housing Development Finance Corporation Limited (HDFC) was among
the first to receive an "in principle" approval from the Reserve Bank of India (RBI) to establish a
private bank, part of the liberalization of the banking industry. In just a few short years, Mumbai-
based HDFC Bank has expanded from its commercial banking roots to the broader world of
retail financial services, with a footprint stretching across the country and encompassing a broad
range of offerings.

Thanks to an unswerving commitment to a world-class technology infrastructure, more than 18

million customers can visit more than 1,700 networked branches in hundreds of cities, use
thousands of ATMs, and take advantage of online and telephone banking.
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BENEFITS TO HDFC AFTER IMPLEMENTING SAS

Achieving the 360-degree view

According to Munish Mittal, Executive Vice President and Head of the Technology Solutions
Group, HDFC Bank views cross-selling to existing customers as a crucial growth strategy. "One
of the most important functions of our data warehouse is to achieve a consolidated view of the
relationship our bank has with each customer," he said. "We want a 360-degree view that shows
us the credit card account, fixed-deposits, asset accounts the totality of their relationship so
that we can segment our most profitable customers to offer more attractive products, services and
pricing, and create an overall better relationship with them."

SAS, combined with the bank's CRM solution, helps HDFC Bank model its customer data and
assign propensity to buy, spend and (for credit and debit cards) activate. SAS helped the bank
target sales communications to its customers thereby reducing the number of calls each customer
receives. Additionally, the highest-performing, highest-margin strata of customers - the
"Imperia" customers receive an almost concierge-like experience with aggressive, attractive
pricing and multiple cross-selling offers. "When we know that the customer is high in the value
chain," Mittal said, "we know that there's a stronger level of profitability in that relationship. So
we reach a greater number of higher-margin customers at far lower cost."

The correct product for cross-sales promotion is identified using the customer profile, life stage
and behavioral dynamics. The predictive power of this analysis encouraged the bank to extend
the use of SAS to inbound channels; thereby further reducing the number of calls from the bank
without compromising meaningful interactions with the customer. Today, more than 70 percent
of HDFC Bank's credit card portfolio is a result of cross-sales to existing customers of standard
liability products, such as savings and salary accounts.

Improving the compliance posture

Anti-money laundering regulation creates strict burdens for banking institutions around the
world and India is no exception. HDFC Bank uses SAS as part of a stringent and focused
program for monitoring and identifying potentially fraudulent transactions. For instance, SAS
helps identify suspicious activity such as layering or moving money to multiple accounts, finding
large single-day cash deposits, opening a number of accounts in a short period of time or sudden
activity in long-dormant accounts.
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"The Know Your Customer [KYC] aspect of banking is very important in anti-money laundering
regulations," explained Mittal. "As we on-board the customer, we run that customer through
certain profiles and cross-check against a list of banned individuals. Identifying a customer and
matching him against good and bad lists requires very clean data. SAS helps us do some
enrichment and data cleansing to strengthen our KYC compliance."

According to V. Chakrapani, Executive Vice President, Audit & Compliance at HDFC Bank, the
comprehensiveness of SAS' scenario modeling has made monitoring of transactions "from an
anti-money laundering perspective, qualitatively rich and dependable, and has enabled the bank
to file qualitative suspicious transaction reports to the Financial Intelligence Unit."

Lowering credit risk

One of the biggest challenges for any retail bank is administering a sound credit-underwriting
policy. HDFC Bank makes thousands of credit decisions every day. "We have hundreds of credit
officers working on originating and approving loans," said Mittal. "We process more than 1,000
applications an hour every day. Many of these scenarios require instant loan approval. For
instance, a customer at a two-wheeler dealer wants to take his purchase with him immediately.
We combine our in-house lending, loan origination and scoring solutions with SAS technology
to provide our customers with the luxury of instant financing decisions."

Using SAS, HDFC Bank interfaces to a credit-bureau report, validates the customer's identity
and runs the application through various models such as propensity to default. The result is that
HDFC Bank delivers an answer to the requestor within minutes, online. "SAS delivers an
exceptional level of performance and reliability in these scenarios," Mittal said.

In the absence of a unique identification, such as a Social Security number, SAS helps identify
group and customer level debt exposure. This benefits the bank in many ways:

The credit officer can view customer level debt exposure across all other loans within the bank.

The bank can reject customers who have a derogatory repayment in other loans within the bank.
On an average, every month the bank rejects up to 2 percent of applicants because of an existing
derogatory repayment. Assuming a probability of default and loss given default of 50 percent,
HDFC Bank is saving nearly 1 percent of its total annual disbursement from potential credit
losses.
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In accordance with regulatory guidelines, SAS helps identify standard exposures of defaulted
customers so the bank can initiate preventive measures and provisions. On average 8-10 percent
of HDFC Bank's total gross non-payment accounts (NPA) are related NPAs (meaning this
customer has another defaulted exposure).

Taking intelligence to the next level

When it comes to business analytics, HDFC Bank has ambitious plans to achieve new insights.
"We want to take our business intelligence to the next level," said Mittal. "We want to study the
behavior of the customer because it can help us develop more accurate, predictive forecasts for
our business. Those predictive models not only prevent losses by spotting likely defaults, they
can also predict propensity to buy or propensity to convert. In the next six to 18 months, we
anticipate deploying solutions that will bring these initiatives to a higher level.

To that end, the bank is planning to include analytics in its future strategic decisions, including
geographic expansion, channel efficiency measurement and resource allocation. The bank also
plans to transition from a product-based to a customer-based portfolio management strategy.
Mittal and the bank's executive branch feel that SAS Analytics is the right fit for the competitive
advantage.

"When it comes to analytical technology, SAS is the gold standard," said Mittal. "An
organization like HDFC Bank, which is committed to quality and service and delivering an
exceptional experience to our customers we need that best-in-class technology. I think SAS is
up on the pedestal when it comes to business analytics, modeling, fraud detection and statistical
analyses.

"Every day, we are making decisions based on SAS' analysis such as whether to extend credit
to a new customer. And every decision we make that helps us reduce nonperforming assets
indirectly generates a return on our investment. With SAS, we have greater confidence that we
are making reliable decisions and the system performance has been excellent. Definitely, SAS
has been a great experience for our bank."