DATA SCIENCE FOR BUSINESS

Business analytics and organizational change

Ershad Gholamrezaie
Department of Informatics

Nov. 2020

UMEÅ UNIVERSITY
 WHAT IS DATA SCIENCE?

• Science
o “Science (from the Latin word scientia, meaning "knowledge") is a
systematic enterprise that builds and organizes knowledge in the form
of testable explanations and predictions about the universe.” (Wikipedia)

• Data?

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 WHAT IS DATA?

• In general data are information

o Observations
• General types of data
o Quantitative
o Qualitative
q Structured
q Unstructured
Ø Discrete
Ø Continuous
(https://commons.wikimedia.org)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 WHAT IS DATA SCIENCE?

• “Data science is an inter-disciplinary field that

uses scientific methods, processes, algorithms
and systems to extract knowledge and insights
from structured and unstructured data.”
(Wikipedia)
• Data in data science
o Collected analectic information
to find specific answers to specific
questions
(https://thedatascientist.com)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 WHAT IS DATA SCIENCE FOR BUSINESS?

• Data science for business is a set of fundamental scientific principles

to collect, process, and interpret data in the business context.

ü Healthcare
ü Public sector
ü Hazard and risk management
ü Finance and retail
ü IOT
ü Literarily EVERYWHERE
(https://thedatascientist.com)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 QUALITATIVE VS QUANTITATIVE DATA

Quantitative Qualitative
• Objective • Subjective
• Conclusive • Interpretive
• Countable • Conceptual
• Measurable • Descriptive
• Categorized by numbers • Categorized by characteristics

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 STRUCTURED VS UNSTRUCTURED DATA

• Structured data
o Well-defined format
o Mainly quantitative data
o Spreadsheets (i.e. easy to deal with)

• Unstructured data
o No well-defined format
o Mainly qualitative data
o Hard to analyse

(https://learn.g2.com)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 DISCRETE VS CONTINUOUS DATA

• Discrete data
o Disconnected
o The number of … (quantitative)
o Can be qualitative too (exp. gender)

• Continuous data
o Unfixed number
o Measurements
o Range (time-dependent) (https://learn.g2.com)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 GENERAL FLOWCHART
1st step and
the most Data (Provost & Fawcett: Fig. 2-2)
important acquisition
One?!!!

Model Data
evaluation preparation

Deployment
Visualization Data
(Modeling) processing

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 SUMMARY

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS (LinkedIn, Steve Nouri) ERSHAD.GHOLAMREZAIE@UMU.SE
 SUMMARY

Overfitting!

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS (LinkedIn, Steve Nouri) ERSHAD.GHOLAMREZAIE@UMU.SE
 MODELLING TECHNIQUES

General Techniques General Methodology

• Regression • Input (data)
• Classification • Function (Reg./Clas./Clus.)
• Clustering • Output (model, new data)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 REGRESSION Trend Line
• Regression is a function to fit a line to
a set(s) of data
o Linear (y = ax + b)
o Nonlinear:
1) Logarithmic
2) Exponential
3) Polynomial
4) Power
• Input:
o Predictors
• Output:
o Response (good for quantitative)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 REGRESSION Trend Line

• Regression is a function to
fit a line to a set(s) of data
o Linear (y = ax + b)
o y = ?x + ?
For all n points, it calculates 𝑥 ! & 𝑥𝑦
Calculate
𝑦! − 𝑦"
𝑎=
𝑥! − 𝑥" $ 𝑥 , $ 𝑦 , $ 𝑥 ! , $ 𝑥𝑦

o 𝑦 − 𝑦! = 𝑎 (𝑥 − 𝑥! ) 𝑛 ∑(𝑥𝑦) − ∑ 𝑥 ∑ 𝑦
𝑎=
𝑛 ∑(𝑥 ! ) − (∑ 𝑥)!
∑𝑦 − 𝑎 ∑𝑥
𝑏=
𝑛

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 CLASSIFICATION
• Classification is a model to assign
a set(s) of observations to a
specific category (supervised)
• Input:
o Earlier observations
(labelled)
• Function:
Classifier (transform unseen
o
data to Class)
• Output:
o Class (known)
o Good for qualitive data
(Provost & Fawcett: Fig. 3-13)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 CLUSTERING
• Clustering is a model to assign
a set(s) of data to a specific
category (unsupervised)
• Input:
o Unlabelled data
• Function:
K-means / Hierarchies
o
• Output: (Provost & Fawcett: Fig. 6-2)

o Cluster (Unknown)
UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 K-MEANS METHOD

• It is a simple and popular clustering

method (Tableau)
• Each cluster is based on the aggregated
(similarities) data points (centroids)
• “K” defines numbers of the centroids
• Centroids are the centres of the clusters
• “Means” is the average of the data that is
assigned to each centroids.
(Provost & Fawcett: Fig. 6-12)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 K-MEANS METHOD

• Formula in Tableau

!"# . $%&
o ☓
!"# / &%'

o Var is variance, B is between, W is

within, N is number of cases, k is
number of cluster

(Provost & Fawcett: Fig. 6-12)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 K-MEANS METHOD

• Formula in Tableau

!"# . $%&
o ☓
!"# / &%'

o Var is variance, B is between, W is

within, N is number of cases, k is
number of cluster

(Provost & Fawcett: Fig. 6-12)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 K-MEANS METHOD

• Formula in Tableau

!"# . $%&
o ☓
!"# / &%'

o Var is variance, B is between, W is

within, N is number of cases, k is
number of cluster

(Provost & Fawcett: Fig. 6-12)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 K-MEANS METHOD

• Formula in Tableau

!"# . $%&
o ☓
!"# / &%'

o Var is variance, B is between, W is

within, N is number of cases, k is
number of cluster

(Provost & Fawcett: Fig. 6-12)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 K-MEANS METHOD

• Formula in Tableau

!"# . $%&
o ☓
!"# / &%'

o Var is variance, B is between, W is

within, N is number of cases, k is
number of cluster

(Provost & Fawcett: Fig. 6-12)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 K-MEANS METHOD

• Formula in Tableau

!"# . $%&
o ☓
!"# / &%'

o Var is variance, B is between, W is

within, N is number of cases, k is
number of cluster

(Provost & Fawcett: Fig. 6-13)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 K-MEANS METHOD

• Formula in Tableau

!"# . $%&
o ☓
!"# / &%'

o Var is variance, B is between, W is

within, N is number of cases, k is
number of cluster

(Provost & Fawcett: Fig. 6-13)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 STATISTICS IN DATA SCIENCE?

• “Statistics consists of a body

of methods for collecting and
analysing data.”
(Agresti & Finlay, 1997)

(https://thedatascientist.com)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 TYPES OF STATISTICS

• Descriptive statistics (Expressive)

o Presenting

o Organizing

o Summarizing

o Limited within the dataset boundaries

o Mean, Median, Variance, Graphs, … (Provost & Fawcett: Fig. 2-2)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 TYPES OF STATISTICS

• Inferential statistics (Conclusive)

o Conclusive determination regarding a population
based of a sample(s)

o Beyond dataset boundaries

o It may use descriptive statistics

§ Mean, Median, …
(Provost & Fawcett: Fig. 3-13)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 VARIABLE / POPULATION / SAMPLE

• Variable is a properties or characteristics of an

event(s) that can vary and takes on different values.

• Population is the entire group of individuals.

• Sample is a part of the population that is considered

for a study.
(Provost & Fawcett: Fig. 3-13)

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 AVERAGE & MEAN & MEDIAN
Day Temp (°C)
• Mean (arithmetic mean) Monday 25
Ø 𝑥̅ 𝑠𝑎𝑚𝑝𝑙𝑒 Tuesday 20

Ø𝜇 population Wednesday 18
Thursday 23
∑&
#$% "#
Ø 𝑥̅ = Friday 28
#
Mean 22.8
• Average = Mean
UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 AVERAGE & MEAN & MEDIAN
Day Temp (°C)
• Median is the middle value of Monday 25
Tuesday 20
a set of ordered data
Wednesday 18
Ø𝑥
! = 𝑥!"# Thursday 23

$%& Friday 28
Ø𝑚𝑒𝑑 = Median 23
'

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 AVERAGE & MEAN & MEDIAN
Day Temp (°C)
• Median is the middle value of Monday 25 (4)
Tuesday 20 (2)
a set of ordered data
Wednesday 18 (1)
Ø𝑥
! = 𝑥!"# Thursday 23 (3)
Friday 28 (5)
$%&
Ø𝑚𝑒𝑑 = Saturday 33 (6)
'
Median 24

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 VARIANCE
• Variance merges values in the dataset to make Day Temp (°C)
a measure of average squared deviation of Monday -1
each number from the mean. Tuesday -2
• Population: Wednesday 0
" Thursday 1
Ø 𝜎 = ! ∑#$%"(𝑥$ − 𝜇) !
# Friday 2
• Sample Saturday -3
" Variance 2.917
Ø 𝑠 ! = # ∑#$%"(𝑥$ − 𝑥)̅ !
UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 STANDARD DEVIATION
• Standard deviation means spread around the Day Temp (°C)
mean. Monday -1
o mean is consider as a centre to calculate Tuesday -2
tendency of a dataset Wednesday 0
o Central tendency Thursday 1
Friday 2
Ø 𝜎= 𝜎 ! (Population)
Saturday -3
Ø 𝑠= 𝑠! (Sample)
𝜎 1.708

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 PROBABILITY
• The probability is the frequency of an event
A dice rolling B dice rolling
that would occur in a series of repetitions.
1 1
• 𝑃 𝐴 & 𝑃(𝐵) are the probability of events A and B, 2 2
respectively.
3 3
0 23245
• 𝑃 𝐴=6 = ( ) 4 4
1 56578 232459

0
5 5
• 𝑃 𝐵=6 = 1 6 6

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 PROBABILITY
• P(A ∩ B) is the intersection of events A and B.
A dice rolling B dice rolling
o A ∩ B is an event that both A and B occur.
1 1
• P(A ∪ B) is the union of events A and B.
2 2
o A ∪ B is an event that either A or B
3 3
o P(A|B) is a conditional probability that event A
4 4
occurs, given that event B has occurred.
5 5
o A|B is an event that A occurs if B has been already
occurred. 6 6

UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE
 • P(A ∪ B) = P(A) + P(B) - P(A ∩ B) Let’s have fun ;-)
• P(A ∩ B) = P(A) × P(B|A)

• What is the probability of double 6?

A dice rolling B dice rolling
1
𝑃 𝐴=6 = 1 1
6

1 2 2
𝑃 𝐵=6 =
6 3 3
• What is the probability of a “6” on dice A and any random 4 4
number but “6” on dice B?
5 5
1
𝑃 𝐴=6 =
6 6 6
5
𝑃 𝐵≠6 =
6
UMEÅ UNIVERSITY
DATA SCIENCE FOR BUSINESS ERSHAD.GHOLAMREZAIE@UMU.SE