BUSINESS ANLYSTICS

UNIT: I

Business Analytics: definition, Components of Business

Analytics, Types of Business Analytics methods, Benefits of
Business Analytics, Business Analytics Tools, Applications of
Business Analytics, Trends in Business Analytics

Business Analytics definition: Business Analytics is the process

of transforming data into insights to improve business decisions. It
can be defined as a process that involves the use of statistical
techniques, information system software, and operations research
methodologies to explore, visualize, discover and communicate
patterns or trends in data. It converts data into useful information for
taking better decisions in business.

Components of Business Analytics: Components of Business

Analytics refer to the core elements that work together to help
organizations collect, process, analyse, and use data for informed
decision-making. The key components are
1. Data collection
2. Data Integration
3. Data Storage and Management
4. Data Cleaning and Preprocessing
5. Data Analytics
6. Data Visualization and Reporting
7. Business Intelligence (BI
8.Data governance and ethics:
Data Collection: Data collection is the process of gathering relevant
data from various sources, both internal and external to the
organization. This includes structured data from databases,
spreadsheets, transactional systems, as well as unstructured data
from sources like social media, web logs or text.
Data Integration: Data integration is the process of combining data
from multiple sources to create a unified view.
Data Storage and Management: Data storage and management is
the process of storing and managing the collected and integrated
data in a structured manner. This can be done through data
warehouses, data lakes or other data management systems.
Data Cleaning and Preprocessing: Data cleaning and preprocessing
is the process of cleaning and preparing the data for analysis. It
involves handling missing values, removing duplicates, resolving
inconsistencies and normalizing or transforming the data as
necessary.

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Data Analytics: Data analytics focuses on summarizing and

visualizing historical data to gain insights for further improve
business decisions.
Data Visualization and Reporting: Data visualization and reporting is
the process of presenting data and insights in a visual format to
facilitate understanding and decision-making. Data visualization
techniques like charts, graphs and interactive dashboards make it
easier to comprehend complex information and communicate
findings to stakeholders.
Business Intelligence (BI): Business intelligence involves the
technologies, processes and tools used to collect, analyse and
present data to support business decision-making. Bl encompasses
data integration, reporting, ad-hoc analysis and interactive
visualization.
Data governance and ethics: Data governance involves establishing
policies, procedures and standards for data management, data
privacy and data security. It ensures that data is used ethically and
in accordance with legal and regulatory requirements.

Types of Business Analytics methods: There are several types of

business analytics, each serving a specific purpose and providing
insights into different aspects of a business. Common types of
business analytics are
1. Descriptive analytics
2. Diagnostic analytics
3. Predictive analytics
4. Prescriptive analytics
Descriptive analytics: Descriptive analytics focuses on understanding
historical data and providing a summary of what has happened in
the past. It involves techniques such as data aggregation, data
visualization and reporting to describe patterns, trends and Key
Performance Indicators (KPIs). Descriptive analytics provides a
foundation for further analysis and decision-making.
Diagnostic analytics: Diagnostic analytics aims to determine the
causes and reasons behind specific business outcomes or events. It
involves drilling down into data to identify relationships, correlations
and dependencies between different variables. Diagnostic analytics
helps answer the question "Why did it happen?" by examining
historical data and identifying the factors that influenced a particular
outcome.
Predictive analytics: Predictive analytics uses historical data and
statistical techniques to make predictions about future outcomes or
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events. It involves applying predictive models and algorithms to

identify patterns and trends in historical data and use them to
forecast future behaviour. Predictive analytics enables businesses to
anticipate customer behaviour, demand trends, market changes and
potential risks, empowering them to make proactive decisions.
Prescriptive analytics: Prescriptive analytics goes beyond predictive
analytics by
not only predicting future outcomes but also providing
recommendations on the best course of action. It combines historical
data, predictive models, optimization techniques and business rules
to suggest the most optimal decisions to achieve desired outcomes.
Prescriptive analytics helps businesses answer the question "What
should we do?" by providing actionable insights and decision
support.

Benefits of Business Analytics: Business analytics plays a crucial

role in modern organizations and its importance stems from several
key factors. They are
Data-driven decision making: Business analytics enables
organizations to make informed decisions based on data and
evidence rather than relying solely on intuition or gut feelings. By
analyzing and interpreting data, organizations can identify patterns,
trends and insights that guide strategic and operational decision-
making. This leads to more accurate, objective and effective
decision-making processes.
Improved performance and efficiency: Business analytics helps
optimize business
operations and processes by identifying inefficiencies, bottlenecks
and areas for
improvement. It allows organizations to measure and monitor Key
Performance
Indicators (KPIs), track progress towards goals and identify
opportunities for cost
reduction, resource optimization, or performance enhancement. This
leads to
improved operational efficiency, productivity and profitability.
Customer insights and personalization: Business analytics enables
organizations
to gain a deeper understanding of their customers' behaviour,
preferences and needs. By analysing customer data and patterns,
organizations can personalize their marketing strategies, improve
customer segmentation, tailor product offerings and deliver better
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customer experiences. This enhances customer satisfaction, loyalty

and ultimately drives business growth.
Competitive advantage: In today's highly competitive business
landscape. organizations that effectively leverage data and analytics
gain a competitive edge. Business analytics helps organizations
identify market trends, monitor competitors, analyse market
dynamics and make data-driven decisions that outperform
competitors. It enables organizations to stay ahead of the curve,
seize opportunities and adapt to changing market conditions.
Risk management and fraud detection: Business analytics plays a
critical role in identifying and mitigating risks, both internal and
external. By analysing historical data and patterns, organizations can
identify potential risks, predict future risks and develop strategies to
mitigate them. Business analytics also aids in fraud detection and
prevention by identifying anomalous patterns or suspicious activities
in financial transactions or operational processes.
Innovation and new business opportunities: Business analytics can
uncover insights and trends that lead to the identification of new
business opportunities or innovative ideas. By analysing market
data, customer behaviour and emerging trends, organizations can
identify gaps in the market, new customer segments or untapped
markets. This enables organizations to develop new products,
services or business models that cater to evolving customer needs
and drive business growth.
Continuous improvement and adaptability: Business analytics fosters
a culture of
continuous improvement and adaptability within organizations. By
measuring, monitoring and analysing data, organizations can assess
the effectiveness of their strategies, initiatives, and processes. Data-
driven insights help identify areas for improvement, validate
hypotheses and support evidence-based decision-making. This
allows organizations to adapt and respond to changing market
conditions, customer demands and business challenges.

Business Analytics Tools: There are various business analytics

tools available in the market, each offering unique features and
capabilities. Here are some popular tools commonly used in business
analytics. They are
Tableau: Tableau is a powerful data visualization and business
intelligence tool. It allows users to connect to multiple data sources,
create interactive dashboards and generate insightful visualizations.

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Tableau offers a user-friendly interface and supports drag-and-drop

functionality.
Microsoft power BI: Power BI is a cloud-based business analytics
platform provided by Microsoft. It enables users to connect, analyze
and visualize data from multiple sources. Power Bl offers a range of
data exploration, data modelling and reporting capabilities.
QlikView: QlikView is a self-service data discovery and visualization
tool. It provides users with the ability to explore data, create
interactive visualizations and generate dashboards. QlikView uses an
associative data model to enable data exploration from different
angles.
IBM cognos analytics: Cognos analytics is an enterprise-level
business intelligence and reporting tool. It offers features such as ad-
hoc querying, interactive dashboards and advanced analytics
capabilities. Cognos analytics integrates with various data sources
and provides a unified view of data.
SAS: SAS (Statistical Analysis System) is a comprehensive suite of
analytics tools. It offers a wide range of capabilities for data
management, statistical analysis, predictive modeling and machine
learning. SAS is widely used in industries such as healthcare, finance
and retail.
R: R is a programming language and environment for statistical
computing and
graphics. It provides a wide range of packages and libraries for data
manipulation, exploratory data analysis, statistical modeling and
machine learning. R is popular
among statisticians and data scientists.
Python: Python is a versatile programming language with data
numerous libraries for analysis and machine learning. Libraries such
as Pandas, NumPy and Scikit learn provide powerful tools for data
manipulation, analysis and modelling. Python widely used in the data
science community.
Apache spark: Apache spark is an open-source, distributed
computing framework for big data processing and analytics. It
provides high-speed data processing capabilities and supports
various data sources and analytical operations. Spark is known for its
scalability and ability to handle large-scale data processing tasks.
RapidMiner: RapidMiner is an integrated platform for data
preparation, predictive modelling and machine learning. It offers a
visual interface for building analytical workflows and supports a wide
range of data mining and machine learning algorithms.

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Google analytics: Google analytics is a web analytics tool that

provides insights into website traffic, user behaviour and marketing
effectiveness. It offers features such as data visualization,
conversion tracking and audience segmentation to help businesses
optimize their online presence.

Applications of Business Analytics: Business analytics has a wide

range of applications across various industries and business
functions. Common applications of business analytics are
Marketing analytics: Businesses use marketing analytics to gain
insights into customer behaviour, preferences and trends. It helps in
segments, targeting the understanding customer right audience,
optimizing marketing campaigns, measuring the effectiveness of
marketing efforts and improving customer acquisition and retention
strategies.
Sales analytics: Sales analytics focuses on analysing sales data to
identify patterns, trends and opportunities. It helps businesses
optimize sales performance, forecast sales volumes, track sales
pipeline, identify cross-selling and upselling opportunities and
improve sales strategies and processes. Financial analytics: Financial
analytics involves analysing financial data to gain insights into the
financial performance and health of a business. It includes financial
planning and forecasting, profitability analysis, cost optimization, risk
assessment, fraud detection and compliance monitoring.
Operations analytics: Operations analytics aims to improve
operational efficiency, productivity and quality. It involves analysing
data related to production processes, supply chain management,
inventory management, logistics and resource allocation. Operations
analytics helps in optimizing processes, reducing costs, improving
resource utilization, and enhancing overall operational performance.
Human Resources (HR) analytics: HR analytics involves analysing HR
data to gain insights into workforce performance, employee
engagement, talent acquisition and retention, compensation and
benefits, training and development and workforce planning. It helps
businesses make informed decisions related to talent management,
employee satisfaction, succession planning and workforce
optimization.
Risk analytics: Risk analytics focuses on identifying and managing
business risks. It involves analysing data to assess and quantify
risks, predict potential risks and develop risk mitigation strategies.
Risk analytics is used in areas such as credit risk assessment, fraud
detection, insurance underwriting, and regulatory compliance.
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Customer analytics: Customer analytics aims to understand

customer behaviour. preferences and needs. It involves analysing
customer data to identify buying patterns, segment customers,
personalize marketing strategies, optimize customer experience and
improve customer satisfaction and loyalty.
Supply chain analytics: Supply chain analytics focuses on optimizing
supply chain
operations, reducing costs and improving efficiency. It involves
analysing data related to inventory levels, demand forecasting,
supplier performance, logistics and distribution. Supply chain
analytics helps in improving procurement strategies, demand
planning, inventory management and supplier relationship
management.
Trends in Business Analytics: Current and emerging trends in
Business Analytics are
Artificial Intelligence (AI) and Machine Learning (ML) Integration:
Automates data analysis and enables smarter predictive and
prescriptive analytics. Used for natural language processing,
sentiment analysis, fraud detection, and more.
Augmented Analytics: Combines AI and ML to enhance data
preparation, insight generation, and explanation. Enables non-
technical users to interact with data using natural language queries
(e.g., “What caused the sales drop last quarter?”).
Data Democratization: Makes data and analytics accessible to all
employees, not just data scientists or analysts. Self-service BI tools
like Tableau, Power BI, and Qlik are becoming increasingly popular.
Real-Time Analytics: Organizations are leveraging streaming data
(from IoT devices, web traffic, etc.) for instant insights. Used in
industries like finance (fraud detection), retail (dynamic pricing), and
logistics (real-time tracking).
Data Governance and Ethics: As data privacy laws (like GDPR, CCPA)
become stricter, there is increased focus on ethical data use and
governance. Includes ensuring data quality, security, and
transparency in AI decisions.
Predictive and Prescriptive Analytics Expansion: More companies are
moving beyond descriptive analytics to anticipate future outcomes
and recommend actions. Helps with proactive decision-making in
areas like marketing, operations, and risk management.
Cloud-Based Analytics: Cloud platforms (e.g., AWS, Azure, Google
Cloud) offer scalable and flexible analytics solutions. Enables faster
deployment and accessibility of data analytics tools.

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Data Storytelling and Visualization: There's a strong focus on making

analytics actionable through effective dashboards and storytelling.
Tools now integrate narrative techniques to communicate insights
clearly to stakeholders.
Embedded Analytics: Analytics capabilities are being built directly
into business applications. Allows users to access insights within
CRM, ERP, or HR platforms without switching tools.
Focus on Sustainability Analytics: Businesses are using analytics to
track and reduce their environmental impact. Helps in reporting ESG
(Environmental, Social, and Governance) metrics and achieving
sustainability goals.

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