Data Analytics: Introduction, Key terms

and concepts. Working with data.

Setting objectives, goals and KPIs.
Tracking and collecting data. Analysing
data. Advantages and challenges.
 Data Analytics

 Accumulation of raw data captured from

various sources (Live data, historical data )
can be used to identify fruitful patterns and
relationships (Bose, 2009)
 Exploratory visualization – uses exploratory
data analytics by capturing relationships that
are perhaps unknown or at least less formally
formulated
 Confirmatory visualization - theory-driven
 Analytics, BI, Big Data, Data
Mining - What’s the difference?
 Analytics – Tools to explore past data to gain
insight into future business decisions.
 BI – Tools and techniques to turn data into
meaningful information from a historical
perspective.
 Big Data –data sets that are large and complex
and use traditional data processing applications.
 Data Mining - Tools for discovering
patterns in large data sets manually.
 What Can Be Learned From Data?

 Business Intelligence or Analytics

 Data analytics is an emerging technique that dives
into a data set without prior set of hypotheses
 The data derive meaningful trends or intriguing
findings that were not previously seen or
empirically validated (Leventhal, 2010).
 Data analytics enables quick decisions or help
change policies due to trends observed
 Characterstics of Data Analytics
 Volume: the quantity of data
 Larger than the volume processed by conventional relational database
 Benefits all descriptive, predictive, and prescriptive
 Benefits stochastic models as well
 Velocity: the rate at which data flows
 Prescriptive models run in the background and take data from input to
make an optimal or near optimal decision
 Variety: different data sources in different formats
 The implementation of management science models requires
an additional layer to make the input data uniform
 Data Analytics vs. Statistical Analysis
Data Analytics Statistical Analysis
Utilizes data mining Utilizes statistical and/or
techniques mathematical techniques
Identifies inexplicable or Used based on
novel relationships/trends theoretical foundation
Seeks to visualize the Seeks to identify a
data to allow the significant level to address
observation of hypotheses or RQs
relationships/trends
 Setting objectives

 Objectives and Key Results is the

method to transparently align and
prioritize resources towards a common
goal.
 Setting objectives

 An important aspect before starting any analytics project is

defining how the model will impact the workflow and decision-
making processes of the business.
 The data scientist must interview subject-matter experts within the
company to determine the objectives of the project, the resources
available, the precise definitions of terms to be used, the
projected costs and benefits of the project, and the projected
return on investment (ROI)
 Take sufficient time and care to clarify the purpose of your data
analytics initiative. If you don’t get your objective right, your whole
project can be a waste of time and money.
 goals and KPIs

 Goal-setting is arguably the most important step to

start any project. While research isn’t clear on the
benefits of proper goal-setting, we can deduct the
advantages and disadvantages. If we fail to state a
clear goal, co-workers cannot collaborate, actions are
not aligned and we don’t know if we’ve reached the
goal. In short, havoc looms.
 goals and KPIs

 Accordingly, every Data Science project aims to fulfill a

goal. The breadth of goals might vary from researching
a new model to creating a prototype for improving an
existing system. Even so, accurate goal-setting is
paramount for Data Science projects. Data Science
projects are well-suited for accurate goal-setting
because we can compare the results of our model with
the required metric.
 Tracking
and collecting data
 Data are collected from a variety of sources. The
requirements may be communicated by analysts to
custodians of the data, such as information technology
personnel within an organization. The data may also
be collected from sensors in the environment, such as
traffic cameras, satellites, recording devices, etc. It
may also be obtained through interviews, downloads
from online sources, or reading documentation
 Database and Data Warehouse

 Serve as the foundation of business analytics

 Principles of database design and implementation:
 Conceptual, logical and physical modeling
 Relational Databases
 ETL process (Extraction, Transformation and
Loading)
 SQL (Structured Query Language)
 NoSQL (Non-Structured Query Language)
 Types of Questions and Analytics

Question What happened? Why is this What should I do?

s What’s happening? happening? Why should I do it?
What actions are What will happen What’s the best that can
needed? next? happen?
What exactly is the Why will it happen? What if we try this?
problem?
What actions are
needed?

Enablers • Ad hoc Reports • Data Mining • Optimization

• Dashboards • Text Mining • Simulation
• Data • Web/Media Mining • Decision Modeling
Warehousing • Forecasting • Randomized Testing
• Alerts
Outcome Well defined Accurate projections of Best possible business
s business problems the future states and decisions and transactions
Here is where we are heading..
 Descriptive Analytics
 Function:
 describe the main features of organizational data
 Common tools:
 sampling, mean, mode, median, standard deviation,
range, variance, stem and leaf diagram, histogram,
interquartile range, quartiles, and frequency distributions
 Displaying results:
 graphics/charts, tables, and summary statistics such as
single numbers
 Predictive Analytics

 Function:
 draw conclusions and predict future behavior
 Common tools:
 cluster analysis, association analysis, multiple regression,
logistic regression, decision tree methods, neural
networks, text mining and forecasting tools (such as time
series and causal relationships)
 Example of Fandango
 Prescriptive Analytics

 Function:
 make decisions based on data
 Common models:
 linear programming
 sensitivity analysis
 integer programming
 goal programming
 nonlinear programming
 simulation modeling
 Implementing Business
Analytics
 8-step cycle (LinkedIn’s Big Data initiative)
1. Understand the company’s products in depth
2. Establish tracking mechanisms to retrieve the data about the
products
3. Deploy good quality data throughout the enterprise
4. Apply real time analysis to the data
5. Use business intelligence to standardize reporting
6. Use more advanced analytics functions to discover important
patterns
7. Obtain insights to extract relevant knowledge from the patterns
8. Make decisions to derive value using the knowledge discovered
 Challenges with Business
Analytics
 Lack of Management Science Experts
 Spreadsheet modeling
 Simple formulation
 Seek practical solutions
 But limited in the amount of data they can store
 Analytics Bring Change in the Decision-Making Process
 Information based decision can upset traditional power
relationship
 The case of Oberweis Dairy (Illinois)
 Data analytics changed the focus: from marketing to strategic
 Challenges with Business
Analytics
 Big Data Leads to Incorrect Information
 Difficult for data analyst to find the right information
 The case of AboutTheData.com

 Big Data Demands Big Thinking

 Big data demands new techniques
 Big data requires a new way of thinking
 Challenges and Opportunities

 Fraud
 Waste
 Abuse

06/15/20 Anatoli Shein

 The Potential Gain With Analytics
1. Competing ON Analytics
 Analytics is potential competitive advantage
 Target Result – Sustainable competitive advantage

2. Competing WITH Analytics

 Focus on business processes
 Target result – Incremental profits

3. Improving With Analytics

 Culture of analytics
 Target result – Continuous improvement

4. Revenue Through Analytics

 “Sell” data as a secondary product
 Improved margins or market share

5. Persevering Through Analytics

 Do more than what the competition does
 Live the dream