BAFBAN1: Fundamentals of Business Analytics

Week 03

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Readings

Mohanty, S. (2011). Analytics in Practice. McGraw-Hill Education India.

Kimball R. and Ross M. (2002). The Data Warehouse Toolkit Second Edition. Wiley & Sons

Davenport, T. , Harris, J. and Morison, R. (2010). Analytics at Work: Smarter Decisions,

Better Results. Harvard Business School Publishing.

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BAFBAN1: Fundamentals of Business Analytics

Module 2: Overview of Statistics, Data

Mining, and Analytics

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 STATISTICS and DATA ANALYTICS
Statistical softwares are specialized computer programs which help you to collect,
organize, analyze, interpret and statistically design data.

Benefits of statistical analysis

1. Statistical analysis allows businesses to make crucial decisions about projects.
2.It helps identify trends in the marketplace that can determine whether a project is
right to invest in or not.
3. Business statistics help project future trends for better planning.
4. If you are considering risk factors for specific project that your company wants to
roll out then statistics are necessary.

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●
How can Statistics help in data analytics?
Statistics can be a powerful tool when performing the art of Data

Science (DS). From a high-level view, statistics is the use of mathematics to

perform technical analysis of data. ... The math involved helps us form

concrete conclusions about our data rather than just guesstimating.

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●
Relationship of Statistics and Data Analysis

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 DATA MINING
●

Data mining is the process of discovering

patterns in large data sets involving
methods at the intersection of machine
learning, statistics, and database systems.

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●
DATA MINING

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FOUR STAGES OF DATA MINING
●

1. Data Sources - Database, live data feed, collected and

processed directly by the researcher, such as observations,
surveys, interviews, and focus groups.

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FOUR STAGES OF DATA MINING
2. Data Exploration / Gathering
typically involves summarizing the main characteristics of a data set, including
its size, accuracy, initial patterns in the data and other attributes.

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●
MODELING

Data modeling is the process of documenting a complex

software system design as an easily understood
diagram, using text and symbols to represent the
way data needs to flow. The diagram can be used to
ensure efficient use of data, as a blueprint for the
construction of new software or for re-engineering.

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Sample Data Model

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Deploying Models
Deployment is the method by which you integrate a
machine learning model into an existing production
environment in order to start using it to make
practical business decisions based on data.

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IBM Global Center for Smarter Analytics   © 2013 IBM Corporation
IBM Global Center for Smarter Analytics   © 2013 IBM Corporation
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 ANALYTICS and MARKETING

Marketing analytics is the practice of

measuring, managing and
analyzing marketing performance to
maximize its effectiveness and
optimize return on investment 

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KEY PERFORMANCE INDICATORS OF
EFFECTIVE MARKETING

1. Social Media Reach: traffic, engagement,

likes, comments, inquiries and calls
2. Cost per conversion
3. Increased sales
4. Sustainable product / Service
5. Positive Trends

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 Human Resource analytics (HR Analytics) is defined
as the area in the field of analytics that deals with
people analysis and applying analytical process to
the human capital within the organization to
improve employee performance and improving
employee retention.

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 Analytics is based on data. HR analytics is the
science of gathering, organizing and analyzing the
data related to HR functions like recruitment, talent
management, employee engagement, performance
and retention to ensure better decision making in
all these areas.

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CHALLENGES

1. Quantifying, Measuring and Controlling

2. High competent workforce at efficient cost
3. Complex interaction between staffing levels
4. Compensation benefit structures
5. Personnel profile
6. Corporate strategy involvement

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After applying analytics
1. Analysis of structured and unstructured data
2. Can determine workforce productivity
3. Quantify impact of training programs on performance
4. Predict attrition
5. Identify leadership potentials
6. Justify return on investment for employees
7. Forecast man power requirements

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 FINANCIAL RISK
MANAGEMENT AND
ANALYTICS

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 By identifying risks and managing them in an
effective fashion is now of the major concerns of
any business. When companies can manage their
risk in an better manner, they can take business
decisions in a much more innovative and efficient
manner.

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How financial analysts make use of
predictive analytics:

1. Prevent repetitive loss (trends, red flags, root

cause analysis)
2. Improve reporting
3. Monitor Performance
4. Forecasting and decision
making

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How do financial risk analysts make use of
analytics?
1. Build a library of potential risks
2. Identify KRI – Key Risk Indicators
3. Automation
4. Root cause analysis
5. Monitoring

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 Research and Product Development

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 “Without correct data .. Everything is just
an opinion”

Product development requires extensive

research…and research requires data
analytics to have correct decision basis
and not just opinion.

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 Organizations often depend on new product
development to stay competitive within an
industry. While the process can be challenging, and
oftentimes lengthy, new products and services
allow organizations to grow and further expand
their market reach.

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Product development promotes:

New concepts – completely new products that have arisen as a

result of innovation and which can sometimes create new markets.

Additions to existing product lines – new products that supplement

established product lines.  For example, a supplier of industrial gases
may introduce a new, smaller cylinder to include in an existing
product line, aimed at serving customers who require smaller
amounts of gas.

Modifications of existing products – existing products that are

modified in order to better meet customer needs, such as improved
performance.

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Product development promotes:

competitive advantage over other players – an active research and

development team of the organization will help the advancement
and strengthen the competitive pull

dynamic approach in management – with the use of the latest data

analytics managers can be updated with the trends and will have
continuous development

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 Sample Key Objectives in a product research and development:
 
What is the awareness of products available on the market?
Are customers satisfied with the products available?
How could products on the market be improved?
What new products/features is there interest in?
What are the customer needs? What needs aren’t being met?
What type of customer would be most interested in a new product?
What does the decision making process for buying the product look like?

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IBM Global Center for Smarter Analytics   © 2013 IBM Corporation
 LOGISTICS and OPERATIONS

SUPPLY CHAIN ANALYTICS

Supply chain analytics is the application of

mathematics, statistics, predictive modeling and machine-
learning techniques to find meaningful patterns and knowledge
in order, shipment and transactional and sensor data.

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 An important goal of supply chain
analytics is to improve forecasting and
efficiency and be more responsive to
customer needs.

IBM Global Center for Smarter Analytics   © 2013 IBM Corporation