Fundamentals of Big Data and Business Analytics- Assignment

Answer 1a
Business applications enabled by existence of big data platforms are:

1. Banking and Securities

Industry-specific Big Data Challenges

A study of 16 projects in 10 top investment and retail banks shows that the challenges in this industry
include: securities fraud early warning, tick analytics, card fraud detection, archival of audit trails, enterprise
credit risk reporting, trade visibility, customer data transformation, social analytics for trading, IT operations
analytics, and IT policy compliance analytics, among others.

Applications of Big Data in the Banking and Securities Industry

The Securities Exchange Commission (SEC) is using Big Data to monitor financial market activity.
They are currently using network analytics and natural language processors to catch illegal trading activity
in the financial markets.

Retail traders, Big banks, hedge funds, and other so-called ‘big boys’ in the financial markets use
Big Data for trade analytics used in high-frequency trading, pre-trade decision-support analytics, sentiment
measurement, Predictive Analytics, etc.

This industry also heavily relies on Big Data for risk analytics, including; anti-money laundering,
demand enterprise risk management, "Know Your Customer," and fraud mitigation.

Big Data providers are specific to this industry includes 1010data, Panopticon Software, Streambase
Systems, Nice Actimize, and Quartet FS.

2. Communications, Media and Entertainment

Industry-specific Big Data Challenges

Since consumers expect rich media on-demand in different formats and a variety of devices, some Big Data
challenges in the communications, media, and entertainment industry include:

• Collecting, analyzing, and utilizing consumer insights

• Leveraging mobile and social media content
• Understanding patterns of real-time, media content usage

Applications of Big Data in the Communications, Media and Entertainment Industry

Organizations in this industry simultaneously analyze customer data along with behavioral data to create
detailed customer profiles that can be used to:

• Create content for different target audiences

• Recommend content on demand
• Measure content performance

A case in point is the Wimbledon Championships that leverages Big Data to deliver detailed
sentiment analysis on the tennis matches to TV, mobile, and web users in real-time.

Spotify, an on-demand music service, uses Hadoop Big Data analytics, to collect data from its
millions of users worldwide and then uses the analyzed data to give informed music recommendations to
individual users.
 Amazon Prime, which is driven to provide a great customer experience by offering video, music,
and Kindle books in a one-stop-shop, also heavily utilizes Big Data. Big Data Providers in this industry
include Infochimps, Splunk, Pervasive Software, and Visible Measures.

Businesses can leverage big data in the following ways:

• Explore other analytics solutions

A CRM can only tell you so much about your prospects and customers. With big data analytics solutions,
however, you can analyze all the data inside your CRM (and other programs in your tech stack) and find
patterns in all this data.

• Integrate your data

Any data solution is only as good as the data it uses, and out-of-date and inconsistent information won’t
provide you with any useful insights. You need to make sure your data is synced and integrated.

• Create insightful reporting

Once you have interesting data at your fingertips, you need a way to visualize it. With clear reporting, you
can easily make deductions and share your insights with other team members and stakeholders.
Answer 1b
Cloud computing is a low-cost model for big data analytics. There are increasing number of technologies that
are adopting big data in cloud. Big data and cloud technology when converge make big data analytics in clouds a good
option. Companies move the data to dedicated servers for getting better analytical results. The elastic property of cloud
is ideal for big data analytics which is the process of decomposing large volumes of structured or unstructured data to
identify patterns and make better business decisions. The Cloud Standard Customer Council underlines cloud
architecture for Big Data and Analytics which describes reference architecture for analytic environment. Hadoop can
deliver critical workloads beyond the web scale companies such as Yahoo, Spotify and TrueCar. The businesses like
Yahoo can significantly leverage Hadoop as Hadoop can used by enterprises to extract valuable information from data
under management plus it can deliver latest critical analytic applications.

Business Drivers: Companies are making use of big data analytics to determine business trends and insights
from the volume of data created. As cloud provides elasticity and expertise for accessing data and it can derive value
from it. Enterprise can use their private cloud infrastructure to improve risk and maintain control by analyzing load,
cost and security etc. Analyzing big data has many advantages as it results in business growth, cost savings, revenue
growth and also helps in better marketing for organizations. Analytics services when used by enterprise boost
scalability of enterprise itself. Microsoft’s big data solutions run on Hadoop and can be used either in the cloud or
natively on Windows. Business users can use Hadoop to operate on data using benchmark tools including Excel or
Office 365 which can be integrated with core databases to analyze both structured and unstructured data and create
sophisticated 3D visualizations. Microsoft’s solution enables users to analyze Hadoop data from within Excel, adding
new functionality to software packages.

Cloud model when interleaved with big data yields following benefits:

• Speed and agility: Private clouds can offer an effective method to use big data analytics and supplements
internal resources through public cloud facilities. The agility provided by the cloud lets user to speed up their
infrastructure as data volumes changes.
• Extract value from big data: Enterprise emphasis their budget on Analytics as a service (AaaS) which is
supported by all three-cloud model i.e., public, private and hybrid model.
• Reduce expenditure. Big data cloud-based analytics can bring substantial cost benefits when it comes to
storing large volumes of data and provides resourceful ways of doing business.
• Better decision making: Memory analytics when combined with the ability to evaluate various sources of
data helps to analyze information and make quick decisions based on data analysis.
• New products and services: Big data analytics enables companies to create more product according to
customer needs and satisfaction by analyzing customer requirements and behavior.
• Data is becoming more valuable: Companies need to find advanced approaches to process, manage, and
analyze their data whether data is structured or unstructured. Combining variety of data sources and types
can uncover some of the most interesting unexplored patterns and relationships.
• Enhancement in cloud security: Security within a cloud environment has always been a prime concern,
especially for organizations in highly standardized industries. Cloud providers now offer ways to enforce
security at multiple layers.
• Innovation: The convergence of analytics and cloud can give innovative results. It lowers costs, increases
speed, agility, and security that the cloud services offer.
Answer 2
Descriptive, predictive and prescriptive analytics data are the three pillars of the stable eCommerce business
development. You might not use these particular definitions, but you certainly already use at least two types of this
data to improve your website efficiency.

In a nutshell, descriptive analytics is designed to analyse historical data, predictive analytics — to forecast future
performance, and prescriptive — to develop a strategy for the predicted scenario.

Descriptive Analytics

This is easy to define the term ‘Descriptive analytics’ just because it comes from the word
‘Describe’. Basically, this is the statistics of your performance over a specific period in the past. In
eCommerce, this may be all indicators in your Google Analytics account, such as conversion rate, churn rate,
CPC within a specific ad campaign, average order value or the number of repeat sales — whatever.

Some of the purposes for which you can use descriptive analytics:

• Examine your actual audience.

• Get insights on consumer behavioral patterns.
• Understand the overall demand for your products and analyse demand within a specific
category/segment/time etc.
• Estimate the effectiveness of marketing campaigns.
• Check demand for products via search queries popularity.
• Evaluate actual delivery costs and time.
• Compare indicators between different periods.

Predictive Analytics

All flagship eCommerce companies highlight predictive tactics as a must for decision-making
processes, pricing, shipping, marketing, and personalization. As for a definition, predictive analytics is an
analysis of the current and historical website and marketing performance, consumer behavior, and purchasing
patterns to forecast trends in sales and preclude risks.

The historical data you managed to collect and process allows to:

• Determine the best price in the market.

• Improve website UX.
• Personalize promotions;
• Predict which products will under demand for each season.
• Forecast how many managers should support customers on Black Friday.
• Identify related products for best-sellers.
• Find ideas for A/B testing.
• Optimize stock.
• Enhance your actions on each stage of the sales funnel.

Prescriptive Analytics

Prescriptive analytics, which has become a buzzword in the marketing world, is the automation of
your statistical finding in order to simplify your operational decisions and improve the future seamless
shopping experience.

Here the algorithms come. They make possible such eCommerce tricks as:

• Recommend visitors the most suitable product on your website, which interested other visitors with
similar behavioral patterns;
 • Show different prices to visitors with a high and low average cheque;
• Control stock and notify you when something is running out;
• Determine what a user would buy next.

Use Cases of Business Analytics within the retail industry

1. Behavior Analytics

Some of the key challenges for retail firms are – improving customer conversion rates, personalizing
marketing campaigns to increase revenue, predicting and avoiding customer churn, and lowering customer
acquisition costs. These can be tackled with deeper, data-driven insights on the customer. But today, there
are several different interaction points for consumers to interact with their companies, mobile, social media,
stores, e-commerce sites and more. This causes a substantial increase in the complexity and diversity of data
you may have to accumulate and analyse.

When all this data is collated and analyzed, it can provide insights that you may have never
considered before — for example, recognizing your high value customers, their motives behind the purchase,
their buying patterns behaviors, and which are the best channels to market to them and when. Having these
detailed insights increases the probability of customer acquisition and perhaps drive their loyalty towards
you.

2. Using Big Data to Personalize In-Store Experience

Due to lack of a fool-proof and effective way to measure the specific impact of merchandising
decisions, merchandising has always been considered an art form in the past, associated with aesthetics and
not much else. With the substantial increase in online sales, a new shopping format has emerged whereby the
consumer physically research the desired products in-store and then go ahead and purchase it online.

Due to the emergence of people-tracking technology, new ways to analyse in-store behavior and
assess the impact of merchandising efforts have developed. To optimize merchandising tactics, a data
engineering platform can be of great help to retailers. They can personalize the in-store experience to establish
and drive loyalty by giving offers to incentivize frequent consumers to make more purchases thereby
achieving higher sales across all channels.

3. Customer Journey Analytics

Today it is very easy for customers to access any kind of information using channels like mobile,
social media and e-commerce. This makes decision of buying and purchases convenient for the customers.

At the same time, customers have started expecting much more from businesses, like providing
consistent information, seamless experiences across channels that reflect history, preferences and interests.
Marketers need to continuously adapt with understanding and connecting with their customers. This is
possible when retailers have data-driven insights which help you understand each customer’s profile and
history across channels.

You’ll be able to solve to complex retail queries such as:

• Activities on every step in the customer journey

• Your high-value customers and their behavior
• The best possible way to reach them

It is always very important for businesses to measure their critical KPIs (Key Performance
Indicators), as the old rule is always valid: “If you can’t measure it, you can’t improve it.”
 That is why businesses are super focused on measuring their sales funnels, user profiles,
demographics, crash rates, app open rates, user retention or any other related data to their business, such as
slipping away users, time spent on the app or most popular paths to an in-app purchase.

To be more specific, if a business finds out 75% of their users exit in the shipment screen of their
sales funnel, probably there is something wrong with that screen in terms of its design, user interface (UI) or
user experience (UX) or there is a technical problem preventing users from completing the process.
Answer 3a
The three types of analytics are descriptive, predictive and prescriptive analytics.

Descriptive analytics is a commonly used form of data analysis whereby historical data is collected,
organized and then presented in a way that is easily understood. Descriptive analytics is focused only on what has
already happened in a business and, unlike other methods of analysis, it is not used to draw inferences or predictions
from its findings. Descriptive analytics is, rather, a foundational starting point used to inform or prepare data for
further analysis down the line.

While descriptive analytics focuses on historical data, predictive analytics, as its name implies, is focused
on predicting and understanding what could happen in the future. Analyzing past data patterns and trends by looking
at historical data and customer insights can predict what might happen going forward and, in doing so, inform many
aspects of a business, including setting realistic goals, effective planning, managing performance expectations and
avoiding risks.

If descriptive analytics tells you what has happened and predictive analytics tells you what could happen,
then prescriptive analytics tells you what should be done. This methodology is the third, final and most advanced
stage in the business analysis process and the one that calls businesses to action, helping executives, managers and
operational employees make the best possible decisions based on the data available to them.

The predictive analysis will be best suited to solve this problem. Since predictive analysis is based on
probabilities, it can never be completely accurate – but it can act as a vital tool to forecast possible future events and
inform effective business strategy for the future.

It is important to keep in mind, however, that no analytics will be able to tell you exactly what will happen in the
future. Predictive analytics put in perspective what might happen, providing respective probabilities of likelihoods
given the variables that are being looked at.

Common directions taken with predictive analytics guide questions such as:

• If this metric changes in this way, what would happen to x, y, and z metric and which ones are correlated?
• Why are these results happening at this time – will they only happen then or is this a continuous trend?
• If this happens, then…?
• How likely is…?
• What if nothing changes to current patterns?
• Will this change correct the process, to what extent and in what way?

The data generated by answering the above questions will be used to solve the problem using predictive analytics.
Answer 3b
Business Analytics

Business Analytics is defined as the process where the data is cleaned using various statistical tools and
models. The data is collated, sorted, processed and then studied by applying various statistical approaches and
formulae to be transformed into business insights.

Business Intelligence

Business intelligence solutions are among the most valuable data management tools available. BI solutions
collect and analyze current, actionable data with the purpose of providing insights into improving business operations.

BI uses past and current data to optimize the present for current success. BA uses the past and analyzes the present to
prepare companies for the future.

Difference between BI and BA

Business Intelligence makes use of available data to analyse past patterns and make operations simple and
easy in the present whereas Business Analytics analyses the trends of the past to make predictive analysis
and forecasts for the future.

BI is used to run the current business smoothly and on the other hand, BA is used to bring changes in the
operations.

Finally, BI is important where the business’s focus is to run the current business whereas BA is applicable
where future growth and sustenance are considered to be the topmost priority.

Business intelligence focuses on descriptive analytics

BI prioritizes descriptive analytics, which provides a summary of historical and present data to show what
has happened or what is currently happening. BI answers the questions “what” and “how” so you can replicate
what works and change what does not.

Business analytics focuses on predictive analytics

BA, however, prioritizes predictive analytics, which uses data mining, modeling and machine learning to
determine the likelihood of future outcomes. BA answers the question “why” so it can make more educated
predictions about what will happen. With BA, you can anticipate developments and make the changes
necessary to succeed.

Applying BI and BA in the real world

In the above case study these differences can be achieved with real-world applications of BI and BA
can. Business intelligence provides helpful reports of the past and current state of your business. BI tells you
that sales of Wal-Marts of before several weeks when Hurricane Charley struck. (Assumption: The results
were that the sales of packaged food items were high). As a result, Wal-Mart's in Bentonville, Ark also
decided to make a high purchase of packaged food items and stock up the inventory.

Business analytics asks, “Why did sales of packaged food items rise high in Linda M. Dillman, Wal-
Mart's?” By mining your website data, you learn that a majority of traffic has come due to an advertisement
given by a new channel warning about the hurricane gave good offers on purchase of packaged foods. This
insight helps you to advertise and give good deals and offers to news channels who will be talking about the
upcoming hurricane. You use the previous sales information to anticipate how much items you will need and
 how much supplies you will need to order to keep up with demand if the news channels were to post about
the deals and offers.

Companies that require extensive data (e.g., the need for data warehousing) and intuitive reporting should seriously
consider business intelligence. BI has the added advantages of targeting a business’ weak areas and providing
actionable insights to those problems. Business intelligence tools are excellent solutions for managers who want to
improve decision making and understand their organization’s productivity, work processes and employees. Then, with
that understanding, improve their business from the ground up.