BAFBAN1: Fundamentals of Business Analytics

Week 01

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BAFBAN1: Fundamentals of Business Analytics

What do we mean by Analytics?

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What do we mean by Analytics? [1]
Three types of analytics

Descriptive analytics answers

Descriptive
the questions what happened
Analytics
and why it happen

Predictive analytics answers

Predictive Analytics
the question what will happen

Prescriptive analytics anticipates

Prescriptive what will happen, when it
Analytics happened, and also why it happened

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What do we mean by Analytics? [1] (continued)

Predictive analytics

Prescriptive analytics

Descriptive analytics

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does
not imply any affiliation with or endorsement by them

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What do we mean by Analytics? [1] (continued)

Provides and
Data Analyze Generate
(Descriptive
Model) Reports

Smart Decisions

Process involved using Descriptive Analytics.

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What do we mean by Analytics? [1] (continued)
Descriptive analytics answers the questions what happened and why it happened.
A sample picture shows data of the context of the source data “Course Pro Campaign”
used in a report.

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What do we mean by Analytics? [1] (continued)

Provides
Data Analyze Predictions and
(Predictive Forecasting
Model)

Smart Decisions

Process involved using Predictive

Analytics.
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What do we mean by Analytics? [1] (continued)
Predictive analytics answers the question what will happen, A sample picture shows
predictive analytics workbench. A predictive analytics workbench allows a user to create,
validate, manage, and deploy predictive analytic models. A predictive analytics workbench
consists of these components [4]

Predictive
Analytics

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What do we mean by Analytics? [1] (continued)

Provides ,Generate
Recommendation
Data Analyze using Mathematical
(Prescriptive
Model)
Algorithms

Smart Decisions

Process involved using Prescriptive

Analytics.

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What do we mean by Analytics? [1] (continued)
Prescriptive analytics not only anticipates what will happen and when it will
happen. but also why it will happen. Prescriptive analytics software has the potential to
help during each phase of the oil and gas business through its ability to take in seismic
data, well log data, and their related data sets to prescribe where to drill, how to drill there
and how to minimize the environmental impact.

Prescriptive
Analytics

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BAFBAN1: Fundamentals of Business Analytics
Analytics in Practice
What Kinds of Questions Can Analytics Answer?

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What Kinds of Questions Can Analytics Answer? [1]
Figure 1-1 Degree of Complexity

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BAFBAN1: Fundamentals of Business Analytics

Analytics in Practice

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Analytics in Practice: What It Means[3]
Analytics is defined as the extensive use of data, statistical and quantitative
analyses, explanatory and predictive modeling, and fact-based
management to drive decision making.

Analytics is all about providing business users with better insights, particularly from
operational data stored in transactional systems.

Fortunately, data mining, analytic applications, and business intelligence systems are
now being better integrated with transactional systems.

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Business Users and Their Challenges[3]
The following challenges highlight characteristics of this gap:

•The time to perform the overall cycle of collecting, analyzing, and acting on enterprise
data must be reduced.

•Clear business goals and metrics must be defined.

•Analytics results must be distributed to a wider audience.

•Data must be integrated from multiple sources.

•Acceptance criteria of the analysis models must be clearly stated.

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Trends in Business Analytics[3]
Verticalization
•Analytics solutions are becoming increasingly focused on industry specific problem
solving.

Comprehensive Models and Transformations for Insight

•Rich visualization functionalities that show only a few and the most important attributes.

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BAFBAN1: Fundamentals of Business Analytics

Why It’s Time to Put Analytics to Work

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Why It’s Time to Put Analytics to Work [1]
Most companies today have massive amounts of data at their disposal. We can see this by
just accessing the net, social media and other surveys out there holds a very vast amount
of Data. On the next slide we will cite a sample analytics at work

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation
with or endorsement by them

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Why It’s Time to Put Analytics to Work [1] (continued)
Managers we interviewed at a retail grocery chain confessed to this deficiency
when we asked them what they did with their data. One manager said,

“Well, we sell
“We store it onit.aIndisk,
fact,then
we make
we
““But what do you actually do
more
put
“Not money
itmuch,
on tape, selling
thenwhy
That’s data
we to retail
store
we it
with it toelse
““What manage
do youyour
do with it?”
data syndication
wanted
under a to talk with
mountain firms thanit’swesafe
soyou.”
that
business?”
do selling
from meat.”
nuclear attack.”

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BAFBAN1: Fundamentals of Business Analytics

Where Does Analytics Apply?

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Where Does Analytics Apply? [1]
Analytics can help to transform just about any part of your business or organization.

Some processes and example of data analytics transformations:[5]

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BAFBAN1: Fundamentals of Business Analytics

Information: The Power of Information

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THE POWER OF INFORMATION [2]
Information has always been power,
but the past few decades have seen a
subtle shift occur, fundamentally
altering the way we perceive it.

It has been only relatively

recently that the amount of data
available to us has outstripped
our ability to investigate that data.

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BAFBAN1: Fundamentals of Business Analytics

Metrics and Measurements

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 Metrics and Measurements[6]
Metrics will translate the business challenges into operational measures that can be monitored over time, not only
for analytics impact, but for the entire company.
Objective means by which your company can measure progress and business analytics impact.

•Increase productivity and market share

•Increase retention and conversion rate

•Increase wallet share

•Increase customer satisfaction

•Increase average order size/number of products

•Increase average spend per customer

•Decrease operational costs

•Decrease time-to-decision

•Optimize human capital

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BAFBAN1: Fundamentals of Business Analytics

When Is Analytics Not Practical?

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When Is Analytics Not Practical? [1]

When There’s No Data.

When There’s No Precedent.

When History Is Misleading.

When the Decision Maker Has Considerable Experience.

When the Variables Can’t Be Measured.

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BAFBAN1: Fundamentals of Business Analytics
Overview: The Challenges of Business Analytics

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The Challenges of Business Analytics [6]
Effective business analytics is a focus for business leaders across the globe in ever-increasing
numbers. A 2011 report by the McKinsey Global Institute projects that the United States needs 1.5
million more data-literate managers to meet the demands of the data-driven enterprise. In addition,
during IBM's 2012 IBM Partner World Conference, its CEO predicted that analytics will be the thread
that weaves together front- and back-office systems in order to give companies that harness huge
volumes of unstructured data a competitive business advantage.

ACTIVITY: Challenge of Business Analytics.

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The Challenges of Business Analytics [6] (continued)
Must be grounded in key business questions.

The most impact on the organization when it is forward looking—not backward looking.

New age of business analytics requires the integration and synthesis of various
information disciplines across the organization.

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BAFBAN1: Fundamentals of Business Analytics
Overview:

Challenges from Outside

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CHALLENGES FROM OUTSIDE [6]
We see several business challenges that led up to the newfound focus on business
analytics, as well as several challenges that business analytics must rise to meet.

Environment

Competition

Customers

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BAFBAN1: Fundamentals of Business Analytics
Overview:

Challenges from Within

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CHALLENGES FROM WITHIN [6]
To ensure that data being published from various systems is accurate and reliable, Here are
the challenges encountered from within

Inside the organization

Evolving Business Analytics

Less Subject Matter Experts

External Factors

Internal Factors

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BAFBAN1: Fundamentals of Business Analytics
Information:

The Secret of Success

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The Secret of Success [2]
Possibly the best-guarded secret in business analytics is that in practice, they must

Establish business analytic culture

Understand analytic in play

Recognize the insights as a competitive advantage.

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BAFBAN1: Fundamentals of Business Analytics

Analytics for the Rest of Us

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The Journey of a Smarter Student

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Analytics for the Rest of Us [1]
Many of our practitioners worked in companies that didn’t want to become analytical competitors,
but rather wanted to move their organizations toward greater analytical maturity. They believed that
making decisions on facts and analytics was beneficial, but they didn’t necessarily want to build their
companies and value propositions around doing so.

In this module we occasionally refer to analytical competitors, such as Cincinnati Zoo , Papa Gino’s ,
Kraft Vegemite, Boerse Stuttgart, Globe Telecom, University of Maryland and other business, because
they are great repositories of leading analytical practices.

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References
[1] Davenport, T., Harris, J. and Morison, R. (2007) Analytics at Work: Smarter Decisions,
Better results.

[2]: Stubbs, E. (2012) , The Value of Business Analytics: Identifying the Path to Profitability

[3] : Mohanty, S. (2012) , Analytics in Practice

[4] : Taylor, J. (2012) Decision Management Systems: A Practical guide to Using Business
Rules and Predictive Analytics

[5] : Wrembal, R. Koncilla, K. Data Warehouses and OLAP: Concepts, Architectures and
Solutions

[6] : Isson, J.P. and Harriott, J. (2012) Win with Advance Business Analytics

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