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.[1] 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 analytical modeling and numerical analysis,
including explanatory and predictive modeling,[2] 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."
In other words, querying, reporting, OLAP, it is alert tools can answer questions such as what
happened, how many, how often, where the problem is, and what actions are needed. Business
analytics can answer questions like why is this happening, what if these trends continue, what will
happen next (predict), and what is the best outcome that can happen (optimize).[3]

Types of analytics[edit]
 Decision Analytics: supports human decisions with visual analytics that the user models to
reflect reasoning.[5]
 Descriptive Analytics: gains insight from historical data with reporting, scorecards, clustering etc.
 Predictive Analytics: employs predictive modelling using statistical and machine
learning techniques
 Prescriptive Analytics: recommends decisions using optimization, simulation, etc.

Basic domains within analytics[edit]

 Behavioral analytics
 Cohort Analysis
 Collections analytics
 Contextual data modeling - supports the human reasoning that occurs after viewing "executive
dashboards" or any other visual analytics
 Cyber analytics
 Enterprise Optimization
 Financial services analytics
 Fraud analytics
 Health care analytics
 Marketing analytics
 Pricing analytics
 Retail sales analytics
 Risk & Credit analytics
 Supply Chain analytics
 Talent analytics
 Telecommunications
 Transportation analytics
 Customer Journey Analytics
 Market Basket Analysis
Challenges[edit]
Business analytics depends on sufficient volumes of high quality data. The difficulty in ensuring data
quality is integrating and reconciling data across different systems, and then deciding what subsets
of data to make available.[3]
Previously, analytics was considered a type of after-the-fact method of forecasting consumer
behavior by examining the number of units sold in the last quarter or the last year. This type of data
warehousing required a lot more storage space than it did speed. Now business analytics is
becoming a tool that can influence the outcome of customer interactions.[6] When a specific customer
type is considering a purchase, an analytics-enabled enterprise can modify the sales pitch to appeal
to that consumer. This means the storage space for all that data must react extremely fast to provide
the necessary data in real-time.

A business analyst (BA) is someone who analyzes an organization or business domain (real or
hypothetical) and documents its business or processes or systems, assessing the business model or
its integration with technology. Business Analyst helps in guiding businesses in improving
processes, products, services and software through data analysis.[1]
The role of a systems analyst can also be defined as a bridge between the business problems and
the technology solutions. Here business problems can be anything about business systems, for
example the model, process, or method. The technology solutions can be the use of technology
architecture, tools, or software applications. System analysts are required to analyze, transform and
ultimately resolve the business problems with the help of technology.

1. Business developer – to identify the organization's business needs and business'

opportunities
2. Business model analysis – to define the organization's policies and market approaches
3. Process design – to standardize the organization’s workflows
4. Systems analysis – the interpretation of business rules and requirements for technical
systems (generally within IT)
Real estate decisions
Starbucks contracts with a location-analytics company called Esri to use their
technology platform that helps analyze maps and retail locations. ... From all of this
data, Starbucks can estimate the profitability of a store, and therefore decide whether a
new store opening will be economically viable.
•
• Company started in 1971 in Seattle, Washington named “Starbucks Coffee, Tea and Spice”
by Jerry Baldwin, Zev Siegel and writer Gordon Bowker.
• Starbucks offered exceptional coffee drinks and dark roasted coffee beans and coffee-
making equipment.
• A dominant retailer with more than 21,000 retail stores serving millions of customers every
day in 66 countries.
• President and CEO- Howard Schultz.

Starbucks is one of the largest and best-known companies in the world, with
over 27,000 stores and $22 billion in revenue last year[i]. And the secret
ingredient to much of Starbucks’ success is its innovative use of data
analytics.
Data is key to Starbucks, which includes a head of Global Strategy, Insights
and Analytics as part of its executive leadership team. According to
Starbucks, this function uses “methodologies ranging from ethnography to big
data analytics… that helps support Starbucks pricing strategy, real estate
development planning, product development, trade promotion optimization
and marketing strategy.”

A few specific ways in which Starbucks uses data analytics to drive business
improvements are:
1. Real estate decisions
In 2008, Howard Schultz returned as CEO to a floundering Starbucks and had to shut
down hundreds of store locations. Moving forward, he insisted that the company take a
much more analytical approach in where they place their stores. Now, they use a
mixture of “art and science” to ensure their store locations are placed for success.

Starbucks contracts with a location-analytics company called Esri to use their

technology platform that helps analyze maps and retail locations. It uses data like
population density, average incomes, and traffic patterns to identify target areas for a
new store.[ii] Starbucks uses a both local and corporate level approach to new stores.
They have 20 analytics experts around the world analyzing maps and geographic
information systems data, but also empower regional teams to give input on location,
store design, and other issues[iii]. From all of this data, Starbucks can estimate the
profitability of a store, and therefore decide whether a new store opening will be
economically viable.
FROM HBS DIGITAL INITIATIVE

What are the ways organizations are using data analytics to drive social impact in
developing countries?
Data & Analysis
 Harvard business analytics program: narrowing a gap in the big data age
Learning About Technology

Sample of Starbucks’ GIS

2. Menu design and optimization
Starbucks also uses data to help align its menu and product lines with consumer
preferences. For example, when building out its grocery lines of k-cups and bottled
beverages, Starbucks used both data from its stores as well as customer market
research to decide which products to create. One finding was that many tea drinkers
don’t put sugar in their tea, so Starbucks created two unsweetened tea k-cups[iv].
Starbucks is strengthening its ability to use data to drive its menu with its new digital
menu boards. Starbucks has started testing digital menu boards in a handful of U.S.
locations. The digital boards will allow Starbucks to change which products it features to
drive and increase sales strategically. The boards can feature different items based on
time of day, weather, and more (i.e. lunch items in the afternoon, cold drinks when the
 weather is hotter). In theory, the boards can also be used to dynamically change prices
throughout the day and season to reflect shifts in demand.

New Starbucks menu boards (source: Bloomberg)

3. Personalized attention
Though Starbucks uses generally available data to inform its decisions such as store
location, its true competitive advantage is its trove of exclusive customer data.
Starbucks has more than 14 million people signed up for its Starbucks Rewards loyalty
program. Rewards represented 36% of U.S. company-operated sales last year and
mobile payment was 29 percent of transactions[v]. Through this, Starbucks can see
what specific people are ordering and adjust offerings accordingly. By knowing what
loyalty customers are ordering and how often they order it, they can send consumers
personalized offers and marketing materials to help drive more sales.
I believe Starbucks’ loyalty program will be the key to their continued success moving
forward. Though other companies have started to implement data analysis as well,
removing Starbucks’ advantages from more general sources like Esri, it will be hard for
any competitor to build up the amount of data Starbucks has from its 14 million loyalty
program members. Starbucks seems to realize this, as it is attempting to grow its
rewards program through initiatives like its new Starbucks Rewards Visa credit card.
Global coffee giant Starbucks SBUX is the latest conglomerate to announce a new

business initiative that will utilize one of the hottest technologies of the moment:

artificial intelligence (AI). And in this instance, Starbucks hopes to use AI to get

you to buy even more coffee.

The Digital Flywheel Program, Starbucks will implement AI technology in its

popular Starbucks Rewards members' accounts, considering factors like order

history, current weather conditions, time of day, whether it's a weekend or a

workday, and even if it's a customer's birthday in order to make drink and food

suggestions.

The technology will also introduce new ways for Starbucks customers to order.

According to the company's global chief strategy officer Matthew Ryan, the

Starbucks mobile app will start to integrate "real-time triggers and push

notifications to engage customers more deeply, building on the momentum that is

generating the higher spend per members," he said during an earnings call on July

27. This means that Rewards members could order from a push notification on

their smartphone or through a text message if they are near a Starbucks location.
Just like their relationship with a barista, customers receive the same care and
personalized recommendations when it comes from our digital platforms,”
says Jon Francis, senior vice president, Starbucks Analytics and Market
Research.

Starbucks is delivering personalized recommendations to customers via its mobile app and, soon,
its drive-thrus.
This personalization means that customers are more likely to get suggestions
for items they will enjoy. For example, if a customer consistently orders dairy-
free beverages, the platform can infer a non-dairy preference, steer clear of
recommending items containing dairy, and suggest dairy-free food and drinks.
In essence, reinforcement learning allows the app to get to know each
customer better. And while the recommendations are driven by a machine, the
end goal is personal interaction.
To reduce disruptions to that experience and securely connect its devices in
the cloud, Starbucks is partnering with Microsoft to deploy Azure Sphere,
designed to secure the coming wave of connected internet of things (IoT)
devices across its store equipment.

Starbucks partners are able to spend more time hand-crafting the perfect beverage and less time
on machine maintenance thanks to cloud-connected devices.
The IoT-enabled machines collect more than a dozen data points for every
shot of espresso pulled, from the type of beans used to the coffee’s
temperature and water quality, generating more than 5 megabytes of data in
an eight-hour shift. Microsoft worked with Starbucks to develop an external
device called a guardian module to connect the company’s various pieces of
equipment to Azure Sphere in order to securely aggregate data and
proactively identify problems with the machines.
The solution will also enable Starbucks to send new coffee recipes directly to
machines, which it has previously done by manually delivering the recipes to
stores via thumb drive multiple times a year. Now the recipes can be delivered
securely from the cloud to Azure Sphere-enabled devices at the click of a
button.
“Think about the complexity — we have to get to 30,000 stores in nearly 80
markets to update those recipes,” says Jeff Wile, senior vice president of retail
and core technology services for Starbucks Technology. “
Starbucks is exploring the role of digital traceability in empowering coffee farmers. “I firmly believe
that by empowering farmers with knowledge and data through technology, we can support them in
ultimately improving their livelihoods,” says Michelle Burns, SVP of Global Coffee & Tea.

This new transparency is powered by Microsoft’s Azure Blockchain Service,

which allows supply chain participants to trace both the movement of their
coffee and its transformation from bean to final bag. Each state change is
recorded to a shared, immutable ledger providing all parties a more complete
view of their products’ journey.
This can not only empower farmers with more information and visibility once
the beans leave their farms, but also allows customers to see the impact their
coffee purchase has on the real people they’re supporting.

When Starbucks launched its rewards program and mobile app, they
dramatically increased the data they collected and could use to get to know
their customers and extract info about purchasing habits. The mobile app has
more than 17 million and the reward program has 13 million active users.
These users alone create an overwhelming amount of data about what, where
and when they buy coffee and complementary products that can be overlaid
on other data including weather, holidays and special promotions. Here are
just some of the ways that Starbucks uses the data it collects.
Data Scientists at Starbucks know what coffee
you drink, where you buy it and at what time of
day.

Starbucks Uses Predictive

Analytics To Personalize Your
Experience
Starbucks along with many other retailers is going from just forecasting what may
happen, to using Predictive Analytics and Artificial Intelligence (AI) to deliver a more
personal experience. And this goes beyond sending customers emails on their birthdays
– it sets the groundwork for merging digital marketing and physical stores

Starbucks is trying to maximize their AI adoption by deploying voice and text

recognition AI. My Starbucks Barista is a virtual barista in the mobile app for
easily placing orders via voice or text messages as reduced friction in placing
orders means potentially more sales.
Decision Support System
DSS is a computer program application that analyzes business data and presents it so that user
can more easily take their business decisions.Starbucks uses a singular DSS system at the parent

company in USA: “oracle”. Oracle generates monthly reports on which important decisions are
based.Only the parent company has the authority make decisions about products.

Virtual barista

My Starbucks Barista through the Starbucks mobile app, allows you to place an
order through voice command or messaging to a virtual barista using artificial
intelligence algorithms behind the scenes. Since there are so many nuances to
an individual order, it’s quite an accomplishment for an artificial intelligence
engine to provide a seamless customer experience.

App Description
The Starbucks® app is a convenient way to pay in store or skip the line and
order ahead. Rewards are built right in, so you’ll collect Stars and start
earning free drinks and food with every purchase.

Pay in store
Save time and earn Rewards when you pay with the Starbucks® app at many
stores in the U.S.

Mobile Order & Pay

Customize and place your order, and pick up from a nearby store without
waiting in line.
Rewards Personalized experience is an integral part of the “digital flywheel”
strategy. We are quite familiar with personalization through every time you enjoy Starbucks

with your name on the cup. Starbucks has one step further when the personalization is

based on historical customer data on the application. Through this operation, Starbucks can

upsell (according to research, people ordering over the mobile often spend more per order).

Based on, customer data such as order history, product placement preferences, location,

email, objective information such as weather, from third parties, etc. Starbucks can also

provide personalized one-on-one customer promotions which encourage customers to

purchase more (in some cases to make customers buy things they do not know before) of

products at Starbucks.

Using Starbucks app user data to

predict effective offers

Starbucks Rewards, the company’s loyalty program has about 13

million active members, indicating strong engagement with patrons.

The loyalty program and mobile app also make it much easier for
Starbucks to collect data, test new ideas, and roll out targeted data-
driven initiatives.
Starbucks knows how you like your
coffee

Starbucks fans, your favorite coffee shop has been taking notes.

Using consumer data, the coffee chain designed its new line of products
to complement the habits it gleaned from its own stores. Basically, the
company says it talked to its baristas about how customers ordered
coffee, lattes and tea while in Starbucks locations and culled several

industry reports about at-home consumption. It used that data to create

K-Cups and bottled beverages to sell in grocery stores.

1. Starbucks

The obvious — and often overhyped — examples are Amazon, Walmart, and other major
retailers. But such use-cases are low-hanging fruit. The reality is, many brands you might
not expect are using AI and big data — like Starbucks, for instance.

Personalization is highly valuable to consumers in the modern day and age, as it means
faster service, more relevant options, and better all-around experiences. Big data and
customer metrics, including real-time information, have made it possible to deliver more
targeted service options. Starbucks is at the forefront of this, using their mobile app and vast
data stores to display preferred orders to baristas before customers even get to the counter.
It also improves performance considerably, speeding up order and service times, especially
during the busiest hours.
How does it work? Members of the Starbucks rewards program and mobile app often use it
to order drinks, call in future orders and take advantage of exclusive benefits. At the same
time, the company uses this service to gather a lot of information about their customers’
habits and buying preferences. That is precisely how they can provide preferred order
information to baristas.

But the company also uses this information to build more relevant marketing campaigns and
promotions, decide locations for new stores or potential business and even decide future
menu updates.
Starbucks Going Venti with Big Data and
Analytics
August 21, 2018 by sarah Lontoco

Starbucks launched suburban sprawl coffee houses all across the world, and
they serve millions of cups of coffee (or sugary ice cream shakes) a day. With
all that, they now also gather massive amounts of data from their customers,
and they’re leveraging that in many ways to improve the customer experience
and their business.

The company has approximately 90 million transactions a week from their

25,000 stores worldwide, so Big Data and artificial intelligence is now the
name of their game in helping direct marketing, sales and business
decisions. Let’s take a look at how data works for them.

Where’s the Data Coming From?

The majority of their data comes from its rewards program and mobile
app. When Starbucks launched it, a dramatic increase in data came about,
letting them get to know their customers in more detail, and extract info about
purchasing habits.

Those two data sets alone create an overwhelming amount of data, what with
the 17 million mobile app users and 13 million active users for their rewards
program. The what, where and when of their coffee purchases can be
overlaid on other public data sets, including weather, holidays and their own
promotions, as well as their rivals’.

A Personalized Starbucks Experience

If you’re a member of the rewards program or use the mobile app, you allow
Starbucks to gather data about you, such as your preferred drink and the
usual time of the day for your order. Starbucks is able to identify you through
your smartphone in any location, and give the barista your preferred order, as
well as suggesting new treats you might be interested in trying.

Starbucks’s digital flywheel program is the driver of this intel. This is a cloud-
based AI that’s able to recommend food and drink items to customers who
didn’t even know that they wanted to try something new. The
recommendations will change based on what makes the most sense
according to other data points such as the weather, your location and whether
it’s a holiday or not.

And of course the ‘personal’ touch also extends to their marketing, with
targeted offers and discounts that go beyond the typical birthday
discount. They will also do this to re-engage with you, if you haven’t visited a
Starbucks in a while.

New Store Locations

As everyone knows, the right location is key to a company’s success in retail,

and the Starbucks market planning team taps into the power of data
intelligence through Atlas to determine where stores should be located. Atlas
is a business intelligence tool developed by Esri, and it evaluates massive
amounts of data before recommending a new store location.

It checks intel such as proximity to other Starbucks locations, demographics,

traffic patterns and more. It can even predict the impact to other Starbucks
locations in the area with the opening of a new store. So even if you think
there’s a Starbucks on every corner, their data tells them otherwise.

Starbucks’ data-driven approach also extends to their production expansion,

with the determination of what items to offer in the grocery being determined
by data on customer preferences combined with intelligence from other
industry reports about at-home consumption.

Data-Driven Menu

And of course data also drives special limited-offering menu items based on
what’s happening at the time, such as launching a new Frappucino when
there’s heatwave in the area. It’s also used to determine which Starbucks
locations are allowed to serve alcohol, for their “Starbucks Evenings”. With all
the thousands of combinations allowed for your order, you can bet their AI will
continue to monitor which beverages sell the best in order to make menu
modifications.

Humans vs Machines
Human-readable (also known as unstructured data) refers to information that only humans can
interpret and study, such as an image or the meaning of a block of text. If it requires a person to
interpret it, that information is human-readable.

Machine-readable (or structured data) refers to information that computer programs can
process. A program is a set of instructions for manipulating data. And when we take data and
apply a set of programs, we get software. In order for a program to perform instructions on
data, that data must have some kind of uniform structure.