MBA I Year II SEM (Academic Lecture Material) Business Analytics

ANALYTICS-AN INTRODUCTION

Analytics is the use of:

 data
 information technology
 statistical analysis
 quantitative methods, and
 mathematical or computer-based models

To help managers gain improved insight about their business operations and
make better, fact-based decisions.

Data is such an essential tool for organizations because the data itself is
objective, grounded in fact. It’s this objectivity that can be most helpful for
organizations in determining what decisions they need to make to create the
most value for them.

Business analytics (BA) refers to all the methods and techniques that are used
by an organization to measure performance. Business analytics are made up of
statistical methods that can be applied to a specific project, process or
product.

Business Analytics uses data to create mathematical models to help

organizations make decisions that bring value or are in their best interest.
There is much data out there for organizations to use, though what data they
choose and why they use it will vary from industry to industry.

Business Analytics is the combination of skills, technologies, and practices used

to examine an organization's data and performance as a way to gain insights and
make data-driven decisions in the future using statistical analysis. The goal of
BA is to narrow down which datasets are useful and which can increase revenue,
productivity, and efficiency.

Business Analytics, a data management solution and business intelligence subset,

refers to the use of methodologies such as data mining, predictive analytics, and
statistical analysis in order to analyse and transform data into useful
information, identify and anticipate trends and outcomes, and ultimately make
smarter, data-driven business decisions.

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MBA I Year II SEM (Academic Lecture Material) Business Analytics

The main components of a typical business analytics dashboard include:

 Data Aggregation: prior to analysis, data must first be gathered, organized,

and filtered, either through volunteered data or transactional records
 Data Mining: data mining for business analytics sorts through large datasets
using databases, statistics, and machine learning to identify trends and
establish relationships
 Association and Sequence Identification: the identification of predictable
actions that are performed in association with other actions or sequentially
 Text Mining: explores and organizes large, unstructured text datasets for
the purpose of qualitative and quantitative analysis
 Forecasting: analyses historical data from a specific period in order to make
informed estimates that are predictive in determining future events or
behaviours
 Predictive Analytics: It uses a variety of statistical techniques to create
predictive models, which extract information from datasets, identify
patterns, and provide a predictive score for an array of organizational
outcomes
 Optimization: Once trends have been identified and predictions have been
made, businesses can engage simulation techniques to test out best-case
scenarios
 Data Visualization: Provides visual representations such as charts and
graphs for easy and quick data analysis

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MBA I Year II SEM (Academic Lecture Material) Business Analytics

CORE CONCEPTS OF ANALYTICS (Types)

DESCRIPTIVE ANALYTICS DIAGNOSTIC ANALYTICS

(“What happened?”) (“Why did this happen?”)

Interpretation of historical data and Focuses on past performance to

KPIs to identify trends and patterns.
This allows for a big picture look of
what happened in the past and what
is happening currently using data
aggregation and data mining
techniques.
Many companies use descriptive
analytics for a deeper look into the
behaviour of customers and how they
can target marketing strategies to
those customers.
Examples:
 Traffic and Engagement Reports
 Financial Statement Analysis
 Demand Trends
 Aggregated Survey Results
 Progress to Goals
determine which elements influence
specific trends.
This is done using drill-down, data
discovering, data mining, and
correlation to reveal the cause of
specific events. Once an understanding
is reached regarding the likelihood of
the event, and why an event may occur,
algorithms are used for classification
and regression.
Examples:
 Examining Market Demand
 Explaining Customer Behaviour
 Identifying Technology Issues
 Improving Company Culture

Content Prepared from various sources by Dr. I. J. Raghavendra, Associate Professor,

SMS, GIET University, Odisha

PREDICTIVE ANALYTICS PRESCRIPTIVE ANALYTICS

(“What might happen in the future?”) (“What should we do next?”)

Uses statistics to forecast and Uses past performance data to

assess future outcomes using
statistical models and machine
learning techniques. This often takes
the results of descriptive analytics
to create models that determine the
likelihood of specific outcomes.
This type is often used by sales and
marketing teams to forecast opinions
recommend how to handle similar
situations in the future. Not only does
this type of business analytics
determine outcomes, but it can also
recommend the specific actions that
need to occur to have the best
possible result. This is often achieved
using deep learning and complex neural
networks.

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MBA I Year II SEM (Academic Lecture Material) Business Analytics

of specific customers based on social

media data. Examples:
 Venture Capital: Investment
Examples: Decisions
 Finance: Forecasting Future Cash  Sales: Lead Scoring
Flow  Content Curation
 Entertainment & Hospitality:  Banking: Fraud Detection
Determining Staffing Needs  Product Management: Development
 Marketing: Behavioural Targeting and Improvement
 Manufacturing: Preventing  Marketing: Email Automation
Malfunction
 Health Care: Early Detection of
Allergic Reactions

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MBA I Year II SEM (Academic Lecture Material) Business Analytics

THE COMPETITIVE ADVANTAGE OF BUSINESS ANALYTICS

Competitive advantage is vital for any organisation to survive. To compete,

organisations have to discover new ways to cut costs, deploy resources more
effectively, and develop ways to reach out to each of their customers
individually.

1. Data-driven decision-making: Business analytics enables organizations to

make informed decisions based on data rather than relying solely on intuition
or past experiences. This leads to more accurate predictions and better
strategies.
2. Improved efficiency and productivity: By analysing data, organizations can
identify inefficiencies in processes, resource allocation, and operations,
allowing them to streamline workflows and improve overall productivity.
3. Enhanced customer experience: Analysing customer data helps businesses
understand their preferences, behaviour, and needs better. This insight
enables personalized marketing strategies, product recommendations, and
improved customer service, leading to higher satisfaction and loyalty.
4. Identification of market trends and opportunities: Business analytics
allows organizations to analyse market trends, consumer behaviour, and
competitor activities in real-time. This helps them identify emerging
opportunities, adapt quickly to changes, and stay ahead of the competition.
5. Risk management: By analysing historical data and predicting future trends,
businesses can identify potential risks and take proactive measures to
mitigate them. This includes managing financial risks, supply chain
disruptions, and regulatory compliance.
6. Cost savings: Through optimization of processes and resources, business
analytics can help organizations reduce costs in various areas such as
inventory management, procurement, and marketing campaigns.
7. Innovation and product development: Analysing customer feedback and
market trends can provide valuable insights for innovation and product
development. By understanding customer needs and preferences,
organizations can develop new products and services that better meet
market demand.
8. Competitive differentiation: Organizations that effectively leverage
business analytics gain a competitive edge by making more informed
decisions, delivering superior customer experiences, and staying agile in a
rapidly changing business environment.

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MBA I Year II SEM (Academic Lecture Material) Business Analytics

Table-1: Contribution table of specific application

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MBA I Year II SEM (Academic Lecture Material)
BUSINESS ANALYSIS vs. BUSINESS ANALYTICS
Business analysis is the practice of
assisting firms in resolving their
technical difficulties by
understanding, defining, and solving
those issues.
 Company analysis
 Requirements planning and
management
 Requirements elicitation
 Requirements analysis and
documentation
 Requirements communication
 Solution assessment and
validation
More examples of Business Analysis
projects are:
 Making a Business Architecture
 Creating a Business Case
 Conducting a risk assessment
 Requirements elicitation
 Analysis of Business Process
 Documentation of Requirements
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Business Analytics
Business analytics is also known as
data analytics. It is a process of
collecting, evaluating, and drawing
valuable outcomes from the enormous
amount of data available.
(Applications)
 Finance
 Marketing
 HR
 CRM
 Manufacturing
 Banking and Credit Cards
More examples of Business Analytics
projects are:
 Making a dashboard to track
the main performance metrics
 Using a data warehouse to
report previous performance
 Relying on statistical methods
to predict future sales. This is
based on past sales
 Conducting simulations to
investigate various scenarios
 Exploring data to find new
patterns and relationships
 Explaining why a certain result
occurred
 Experimenting to test previous
decisions
 Forecasting future results
MBA I Year II SEM (Academic Lecture Material) Business Analytics

DATA SCIENTIST VS. DATA ENGINEER VS. DATA ANALYST

Data Scientist
The predominant focus will be on the futuristic display of data. They provide
both supervised and unsupervised learning of data, say classification and
regression of data, Neural networks. The continuous regression analysis would
be using machine learning techniques. Skills needed for Data Scientist are R,
Python, SQL, SAS, Pig, Apache Spark, Hadoop, Java, Perl. A data scientist is
responsible for collecting, analyzing, and interpreting complex data sets using
statistical and machine learning techniques. The data scientist works with a wide
variety of data, including structured, unstructured, and semi-structured data,
and is responsible for finding patterns, trends, and insights that can be used to
drive business decisions.

Key Responsibilities of a Data Scientist:

 Collecting and cleaning large data sets
 Building predictive models using statistical and machine learning techniques
 Communicating insights and recommendations to stakeholders
 Developing data visualizations to communicate complex data in a simple
manner
 Collaborating with data engineers to ensure data is accurate and consistent
 Staying up-to-date with the latest data science techniques and technologies

Data Engineer
Data Engineers concentrate more on optimization techniques and building of
data in a proper manner. The main aim of a data engineer is continuously
improving the data consumption. Mainly a data engineer works at the back end.
Optimized machine learning algorithms were used for maintaining data and to
make data to be available in most accurate manner. Skills needed for Data
Engineer Are Pig, Hive, Hadoop, MapReduce techniques. A data engineer is
responsible for designing and implementing the infrastructure and tools needed
to collect, store, and process large amounts of data. Data engineers work with a
wide variety of data storage technologies, such as Hadoop, NoSQL, and SQL
databases, and are responsible for ensuring the data is accurate, consistent,
and available for analysis.

Key Responsibilities of a Data Engineer:

 Designing and implementing data pipelines to collect and process large
amounts of data.
 Managing and optimizing data storage technologies such as Hadoop, NoSQL,
and SQL databases.
 Building and maintaining data warehouses and data lakes.

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MBA I Year II SEM (Academic Lecture Material) Business Analytics

 Ensuring data quality and consistency across multiple sources.

 Working with data scientists to ensure the accuracy and consistency of the
data used for analysis.
 Staying up-to-date with the latest data storage technologies and best
practices.

Data Analyst
The main focus of this person’s job would be on optimization of scenarios, say
how an employee can improve the company’s product growth. Data
Cleaning and organizing of raw data, analysing and visualization of data to
interpret the analysis and to present the technical analysis of data. Skills
needed for Data Analyst are R, Python, SQL, SAS, SAS Miner. A data analyst is
responsible for collecting, organizing, and analysing data to identify patterns
and insights that can be used to make data-driven decisions. Data analysts work
with structured data, such as spreadsheets and databases, and are responsible
for creating reports and dashboards that communicate key insights to
stakeholders.
Key Responsibilities of a Data Analyst:
Collecting and cleaning structured data sets
Creating reports and dashboards to communicate key insights to stakeholders
Identifying patterns and trends in data to drive business decisions
Collaborating with data scientists and data engineers to ensure data quality and
consistency
Staying up-to-date with the latest data analysis tools and techniques

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MBA I Year II SEM (Academic Lecture Material) Business Analytics

ADVANTAGES OF BUSINESS ANALYTICS

Data analytics helps an organization make better decisions

 Lot of times decisions within organizations are made more on gut feel rather
than facts and data.
 One of the reasons for this could be lack of access to quality data that can
help with better decision making.
 Analytics can help with transforming the data that is available into valuable
information for executives so that better decisions can be made.
 This can be a source of competitive advantage if fewer poor decisions are
made since poor decisions can have a negative impact on a number of areas
including company growth and profitability.

Increase the efficiency of the work

 Analytics can help analyse large amounts of data quickly and display it in a
formulated manner to help achieve specific organizational goals.
 It encourages a culture of efficiency and teamwork by allowing the managers
to share the insights from the analytics results to the employees.
 The gaps and improvement areas within a company become evident and
actions can be taken to increase the overall efficiency of the workplace
thereby increasing productivity.

The analytics keeps you updated of your customer behavioural changes

 In today’s world, customers have a lot of choices.
 If organizations are not tuned to customer desires and expectations, they
can soon find themselves in a downward spiral.
 Customers tend to change their minds as they are continuously exposed to
new information in this era of digitization.
 With vast amount of customer data, it is practically impossible for
organizations to make senses of all the changes in customer perception data
without using the power of analytics.
 Analytics gives you insights into how your target market thinks and if there
is any change. Hence, being aware of shift in customer behaviour can provide
a decisive advantage to companies so that they can react faster to the
market changes.

Personalization of products and services

 Gone are the days where a company could sell a standard set of products and
services to customers.
 Customers crave products and services that can meet their individual needs.
 Analytics can help companies keep track of what kind of service, product, or

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MBA I Year II SEM (Academic Lecture Material) Business Analytics

content is preferred by the customer and then show the recommendations

based on their preferences.
 For example, in social media, we usually see what we like to see, all of this is
made possible due to the data collection and analytics that companies do.
Data analytics can help provide targeted services to customers based on
their individual requirements.

Improving quality of products and services

 Data analytics can help with enhancing the user experience by detecting and
correcting errors or avoiding non-value-added tasks.
 For example, self-learning systems can use data to understand the way
customers are interacting with the tools and make appropriate changes to
improve user experience.
 In addition, data analytics can help with automated data cleansing and
improving the quality of data and consecutively benefiting both customers
and organizations.

It Helps on Measuring the Progress

 Every business has a mission statement, which shows their values to their
customers either as a basis of checking in their development or
their marketing plan.
 Mission statements allow companies to retain and even promote employees as
they offer an idea of the business’s values as guidelines.
 Having quantified values helps a business improve its analytical
process because it gives them a definite goal to follow. When a company
clearly defined plan, everyone in the organisation can strive to achieve it.
 Employees can evaluate business’s quantified values to get a clearer idea of
what an organisation expects from them. The better they understand the
objectives of your business, the better they will be able to perform. This is
one of the most significant benefits of business analytics.

It Supports Data-Driven Decision-Making

 When a business has access to crucial data, it allows making accurate
decisions that give better results. Business analytics provides an organisation
with meaningful and relevant data, fostering smart, data-driven decisions.
 Moreover, business analytics makes it easier to share insights and discuss
the pathway ahead with employees and stakeholders. Thus, it promotes
collaboration between everyone involved in business, helping materialising
goals faster and more efficiently.

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It Delivers Clear Insights

 One of the primary benefits of business analytics is to gain clear insights
through data visualisation.
 Using comprehensive graphs and charts can make your decision-making
process much more efficient. One can extract data from them
easily, identify trends in your data, and generate relevant and practical
insights with better clarity.
 The non-technical audience could be employees or stakeholders.
With visualized data, one can share insights very easily and make them a part
of the overall process, reducing the chances of errors and wrong decisions.

It Keeps you Updated

 The modern consumer has a short attention span. They move from one
business to another very quickly and forget about the previous one instantly.
However, you can prevent this from happening, thanks to business analytics.
 Marketing analytics is a prominent branch of business analytics, and it
focuses on identifying patterns in customer behaviour to understand how
target audience behaves and thinks. It gives you valuable insight into how
they choose a particular business, why they prefer one business over
another, what products/services interest them, their pain points, and so on.
 Such insights can help you make better marketing plans and strategies to
promote your products (or services). When you understand you audience, you
can focus on their particular needs and gain their attention.

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MBA I Year II SEM (Academic Lecture Material) Business Analytics

CHALLENGES OF BUSINESS ANALYTICS

Challenge Description
When data sets become bigger and more complex, bringing
Increase in
them into an analytics framework poses a huge challenge in
number of
business analytics. If this is ignored, it creates gaps that
Sources
result in incorrect communications and observations.
Data processing is essential in order to render usable this
voluminous volume of data that is generated every minute.
Shortage of The immense demand for big data scientists and big data
Talent for Data analysts has been generated on the market with the rapid
Analytics growth in data. It is essential for business organizations,
because the role of a data scientist is multidisciplinary, to
employ a data scientist with qualifications that are versatile.
Gaining valuable insights from Big Data analytics is crucial
for business enterprises and it is therefore critical that
this intelligence is obtained only through the appropriate
Data Secrecy
team. A major challenge in business analytics posed by the
Big Data analytics firms is to successfully bridge this large
void.
It’s not shocking that for every day that passes data is
through. It clearly means that business entities need to
manage a great regular amount of info. The volume and
Handling Large
quality of data available these days will overpower every
Volumes of Data
computer engineer and this is why it is deemed important
for brand owners and managers to make data accessibility
quick and convenient.
Each day new technology and businesses are being built with
Changing the growth of Big Data. Nonetheless, a major challenge in
technological business analytics posed by big data analytics firms is to
Landscape figure out which technologies can better match them
without new challenges and future threats being added.
Enterprise companies are increasing rapidly. With the
exponential development of the companies and major
business organizations, the volume of data generated
Quality of
increases. Storing a large volume of data is now a huge
storage and
challenge in business analytics for us. Popular data storage
retrieving data
solutions such as data lake/warehouses are widely used to
capture and preserve vast volumes of unstructured,
organized data in their format.

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MBA I Year II SEM (Academic Lecture Material) Business Analytics

ESTABLISHING BEST PRACTICES

Primary and Essential Practices (Three Founding Steps)

Analytics View of Data

In simple terms, reconciling the questions being asked by the business with the
kinds of data needed to deliver answers. That answer will in turn dictate what
model to use to gain insights.

Basically, this means mapping the business's questions to the types of data that
are needed to provide answers. From there, the type of model to use becomes
clear.

Business data can be better integrated into analytics efforts if it is

categorized by type. Here are the three major data types:
 Reference data: like plants, currencies, and line of business
 Master data: such as suppliers, products, and customers
 Transactional data: like purchase orders, invoices, and payroll runs.

For companies to transform their data into an analytics-friendly state, they

should develop additional parameters and conversion rules. The selection of an
analytics model depends on two major factors.
 The questions I asked
 The data type available

Source Data Strategically

There are plenty of companies that stop investing in analytics because they lack
accuracy, enough data, have varied data sources or because they believe their
data is poor quality. However, waiting for perfect data is a mistake. Analytics is
all about progress, not perfection. You need to keep moving forward.
It is possible to compensate for a lack of data volume or quality.
Organizations should balance the cost of data acquisition with the value the
data contributes to analytics efforts when acquiring data, either by purchasing
it from a provider or acquiring it for free from open-source resources.
Furthermore, sampling can make data more usable and reduce cycle time. There
is also the approach of featuring engineering, which uses machine learning to
take an existing data set, domain expertise, and intuition, and turn them into
smarter, more analytical data.

Focus on Analytics Products, Not Projects

Rather than focusing on analytics projects, which are finite and tactical,

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organizations should put their effort into analytics products, which produce
measurable financial benefits while improving business performance. There is
inherently more collaboration with data products, teams stick around for
continuous improvement, and they are typically scalable.

Other Analytics Best Practices

Tie stakeholder goals to questions and key performance indicators

To build support and engagement for a program, you have to enlist stakeholders
early, but it's left unclear how to do this successfully. You need to ask the right
questions, not just what stakeholders want. As part of that exercise, clarifying
assumptions is also beneficial. Establishing mutually agreed KPIs with
stakeholders will ensure business goals are being met.

Build high-performance analytics teams

Analytics success transcends the work of highly specialized data scientists who
operate in silos - it requires a shift in corporate culture, one that embraces
hypothesis-based methodologies, and one where analytics expertise extends
beyond the confines of financial and regulatory reporting to include operations
and revenue generation. Analytics needs to be guided so it can be used by all
non-technical users without needing a Ph.D. to gain actionable insights.

Build data literacy by focusing on descriptive analytics and key performance

indicators
Experts estimate that 80% of the current work done in analytics encompasses
descriptive analytics that is, an historical look back to determine why something
happened for example, why sales dipped during a certain period or why specific
forecasts were off. Broadening these efforts helps get stakeholders used to
the new mind-set and gives them first-hand experience with the benefits of
analytics.

Make compliance an integral part of analytics

While data can be an asset, it can also be a liability. To counterbalance the
risks, organizations should put an emphasis on compliance, including government
regulations, internal business rules, and industry standards.

Refine analytics models continuously

Building an analytics model is not a one-and-done exercise; companies need to
adjust modelling efforts to keep pace with business changes, whether due to
mergers and acquisitions or entering new markets. “When things are changing,
your data also changes, and when your data changes, your models change”.

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Support analytics with governance

As data collection efforts ramp up, governance becomes a critical factor.
Establishing formalized processes ensures data is captured and managed
consistently, quality remains high, and there is a common definition and
understanding of data across the organization.

Use data storytelling to promote insights

Data that is cryptic or confusing will not change behaviours or spark new
business patterns. Visual representations, contextual explanations, and financial
benefits of data-driven insights should be integrated into a narrative that
educates stakeholders and relates insights to financial returns. This is where
data storytelling comes into play. Without data storytelling, you are bound to
have most stakeholders lose interest in analytics and your business results from
insights drop back down to 20%

*****End of Unit-I*****

Note: You can also add some points which are discussed in the classroom.

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