Module 1

• Introduction to Business
Analytics: Definition,
• Types - Descriptive, Predictive
and Prescriptive Analytics  , 
• Predictive and Prescriptive
Analytics,

• Business Analytics for decision

making 

• Ethics in data Management

 • Businesses use analytics to explore and examine
their data and then transform their findings into
insights that ultimately help executives, managers
and operational employees make better, more
informed business decisions.
Data • The major types of analytics businesses use are
descriptive analytics, what has happened in a
analytics business; predictive analytics, what could happen;
and prescriptive analytics, what should happen.
(definition • While each of these methodologies offers its own
unique insights, advantages and disadvantages in
) their application, used in combination these analytics
tools can be an especially powerful asset to a
business.
• https://www.youtube.com/watch?v=diaZdX1s5L4
Descriptive Analytics: Insight into
the past

• Descriptive analysis or statistics does exactly

what the name implies: they “describe”, or
summarize, raw data and make it something
that is interpretable by humans.
• They are analytics that describe the past.
• The past refers to any point of time that an
event has occurred, whether it is one minute
ago, or one year ago.
• Descriptive analytics are useful because they
allow us to learn from past behaviors, and
understand how they might influence future
outcomes.
Descriptive analytics
• Descriptive analytics is a commonly used form of data analysis whereby historical data is
collected, organised 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. 
• Generally, the most simplistic form of data analytics, descriptive analytics uses simple
maths and statistical tools, such as arithmetic, averages and per cent changes, rather than
the complex calculations necessary for predictive and prescriptive analytics.
• Visual tools such as line graphs and pie and bar charts are used to present findings,
meaning descriptive analytics can – and should – be easily understood by a wide
business audience.
• Descriptive analytics uses two key methods, data aggregation and data mining (also
known as data discovery), to discover historical data. Data aggregation is the process of
collecting and organising data to create manageable data sets. These data sets are then
used in the data mining phase where patterns, trends and meaning are identified and then
presented in an understandable way. 
• Business metrics are decided. First, metrics are created that will effectively evaluate performance
against business goals, such as improving operational efficiency or increasing revenue. the success of
descriptive analytics heavily relies on KPI (key performance indicator) governance.
• The data required is identified. Data is sourced from repositories such as reports and databases. ‘To
Descriptive
measure accurately against KPIs, ‘companies must catalogue and prepare the correct data sources to
extract the needed data and calculate metrics based on the current state of the business.

analytics
• The data is collected and prepared. Data preparation –transformation and cleansing, for example –
takes place before the analysis stage and is a critical step to ensure accuracy; it is also one of the

• process
most time-consuming steps for the analyst. 
The data is analysed. Summary statistics, clustering, pattern tracking and regression analysis are used
to find patterns in the data and measure performance. 
• The data is presented. Finally, charts and graphs are used to present findings in a way that non-
analytics experts can understand.
Descriptive analytics :Usage
• Descriptive analytics is frequently used in the day-to-day operations of an
organisation.
• Company reports – such as those on inventory, workflow, sales and
revenue – are all examples of descriptive analytics that provide a historical
review of an organisation’s operations.
• Data collected by these kinds of reports can be easily aggregated and
used to create snapshots of an organisation’s operations.
• Social analytics are almost always an example of descriptive analytics.
The number of followers, likes and posts can be used to determine the
average number of replies per post, the number of page views and the
average response time, for example. The comments that people post on
Facebook or Instagram are also examples of descriptive analytics and can
be used to better understand user attitudes. 
advantages and disadvantages of descriptive analytics 

• Since descriptive analytics relies only on historical data and

simple calculations, this methodology can easily be applied in
day-to-day operations, and its application doesn’t necessarily
require an extensive knowledge of analytics.
• This means that businesses can relatively quickly and easily
report on performance and gain insights that can be used to
make improvements.
• On the other hand, descriptive analytics has the obvious
limitation that it doesn’t look beyond the surface of the data –
this is where predictive and prescriptive analytics come into
play. 
Egs descriptive analytics
• helps organisations measure performance to ensure goals and
targets are being met. And if they aren’t being met, descriptive
analytics can identify areas that require improvement or change.
Some examples of how descriptive analytics can be used include
the following:
• Summarising past events such as sales and operations data or
marketing campaigns
• Social media usage and engagement data such as Instagram or
Facebook likes
• Reporting general trends
• Collating survey results
Predictive Analytics: Understanding the future

• Predictive analytics has its roots in the ability to “predict” what might
happen.
• These analytics are about understanding the future.
• Predictive analytics provides companies with actionable insights
based on data.
• Predictive analytics provides estimates about the likelihood of a future
outcome
• use of predictive analytics to produce a credit score. These scores are
used by financial services to determine the probability of customers
making future credit payme
Descriptive analytics
• If your organization tracks engagement in the form of social media analytics or
web traffic, you’re already using descriptive analytics.
• These reports are created by taking raw data—generated when users interact with
your website, advertisements, or social media content—and using it to compare
current metrics to historical metrics and visualize trends.
• For example, you may be responsible for reporting on which media channels
drive the most traffic to the product page of your company’s website.
• Using descriptive analytics, you can analyze the page’s traffic data to determine
the number of users from each source.
• You may decide to take it one step further and compare traffic source data to
historical data from the same sources.
• This can enable you to update your team on movement; for instance, highlighting
that traffic from paid advertisements increased 20 percent year over year.
Finance
• Financial statements are periodic reports that detail financial
information about a business and, together, give a holistic view of a
company’s financial health.
• There are several types of financial statements, including the 
balance sheet, income statement, cash flow statement, and statement of
shareholders’ equity. Each caters to a specific audience and conveys
different information about a company’s finances.
• Financial statement analysis can be done in three primary ways:
vertical, horizontal, and ratio.
• Each of these financial statement analysis methods are examples of
descriptive analytics, as they provide information about trends and
relationships between variables based on current and historical data.
Demand trends
• Streaming provider Netflix’s trend identification provides an excellent use case
 for descriptive analytics.
• Netflix’s team—which has a track record of being heavily data-driven—gathers
data on users’ in-platform behavior.
• They analyze this data to determine which TV series and movies are trending at
any given time and list trending titles in a section of the platform’s home screen.
• Not only does this data allow Netflix users to see what’s popular—and thus,
what they might enjoy watching—but it allows the Netflix team to know which
types of media, themes, and actors are especially favored at a certain time.
• This can drive decision-making about future original content creation, contracts
with existing production companies, marketing, and retargeting campaigns.
Progress to Goals
• descriptive analytics can be applied to track progress to goals.
• Reporting on progress toward key performance indicators (KPIs) can help
your team understand if efforts are on track or if adjustments need to be
made.
• For example, if your organization aims to reach 500,000 monthly unique
page views, you can use traffic data to communicate how you’re tracking
toward it.
• Perhaps halfway through the month, you’re at 200,000 unique page views.
This would be underperforming because you’d like to be halfway to your
goal at that point—at 250,000 unique page views.
• This descriptive analysis of your team’s progress can allow further
analysis to examine what can be done differently to improve traffic
numbers and get back on track to hit your KPI.
Predictive Analytics

• 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.
• Analysing 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.
• Projected to hit $10.5 billion this year, the market for
predictive analytics is expected to nearly triple in size to
$28 billion by 2026
 Predictive Analytics
• Predictive analytics is based on probabilities.
• Using a variety of techniques – such as data mining, statistical modelling
(mathematical relationships between variables to predict outcomes) and
machine learning algorithms (classification, regression and clustering
techniques) – predictive analytics attempts to forecast possible future
outcomes and the likelihood of those events.
• To make predictions, machine learning algorithms, for example, take existing
data and attempt to fill in the missing data with the best possible guesses.
• A newer branch of machine learning is deep learning, which, according to 
Cornerstone Performance Management, mimics the construction of ‘human
neural networks as layers of nodes that learn a specific process area but are
networked together into an overall prediction.’
• Deep learning examples include credit scoring using social and environmental
analysis and sorting digital medical images such as X-rays to automate
predictions for doctors to use when diagnosing patients.
Predictive analytics

• Since predictive analytics can tell a business what could happen

in the future, this methodology empowers executives and
managers to take a more proactive, data-driven approach to
business strategy and decision making.
• Businesses can use predictive analytics for anything from
forecasting customer behaviour and purchasing patterns to
identifying sales trends.
• Predictions can also help forecast such things as supply chain,
operations and inventory demands.
Advantages and disadvantages of predictive analytics

• 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.
• Predictive analytics can also improve many areas of a business, including:
• Efficiency, which could include inventory forecasting
• Customer service, which can help a company gain a better understanding of who their
customers are and what they want in order to tailor recommendations
• Fraud detection and prevention, which can help companies identify patterns and
changes
• Risk reduction, which, in the finance industry, might mean improved candidate
screening 
• This method of analysis relies on the existence of historical data, usually large amounts
of it.
Examples Of predictive analytics

• The healthcare industry, as an example, is a key beneficiary of predictive analytics. In 2019, RMIT
University partnered with Digital Health Cooperative Research Centre to 
develop clinical decision support software for aged care that will reduce emergency
hospitalisations and predict patient deterioration by interpreting historical data and developing
new predictive analytics techniques. The goal is that predictive analytics will allow aged-care
providers, residents and their families to better plan for the end of life. 
• Other examples of industries in which predictive analysis can be used,, include the following:
• E-commerce – predicting customer preferences and recommending products to customers
based on past purchases and search history
• Sales – predicting the likelihood that customers will purchase another product or leave the store
• Human resources – detecting if employees are thinking of quitting and then persuading them to
stay
• IT security – identifying possible security breaches that require further investigation
• Healthcare – predicting staff and resource needs
Prescriptive Analytics: Advise on possible outcomes
• The relatively new field of prescriptive analytics allows users to “prescribe” a number of
different possible actions and guide them towards a solution.
• In a nutshell, these analytics are all about providing advice.
• Prescriptive analytics attempts to quantify the effect of future decisions in order to advise
on possible outcomes before the decisions are actually made.
• At their best, prescriptive analytics predicts not only what will happen, but also why it
will happen, providing recommendations regarding actions that will take advantage of the
predictions.
• Prescriptive analytics use a combination of techniques and tools such as business rules,
algorithms, machine learning and computational modelling procedures. These techniques
are applied against input from many different data sets including historical and
transactional data, real-time data feeds, and big data.
• Descriptive analytics tells you what has happened and predictive analytics tells
you what could happen, then prescriptive analytics tells you what should be done
Predictive analytics
⮚Sales Forecast : Predictive analytics might assess historical data on purchasing
activities and link it with trends such as customer behavior and weather patterns to
forecast sales opportunities for any given period of time.
• Predictive analytics can also provide insights into the types of products and services
that will be in demand, giving your organization the ability to maximize on those sales
opportunities.
⮚Marketing Analysis: The marketing function within any organization opens doors to
new business as well as keeps the door open for existing relationships.
• Predictive analytics can be used to better understand how to do both effectively. It can
be used to predict and avoid customer churn by identifying signs of dissatisfaction.
• It can be used to identify sales opportunities and create campaigns to move customers
through the pipeline.
• And it can be used to understand how your customers interact with your business and
allow you to make it easier for them to do so.
Predictive analytics
⮚Product Maintenance: Predicting maintenance issues and preventing machines
from breaking down is critical for the manufacturing industry.
• Costs related to a slowdown of production can far outweigh the cost of repair.
• Predictive analytics can use real-time data to accurately predict when a machine
may breakdown, allowing the business to address it before it causes a sequalae
of problems.
• Credit Risk and Fraud Prevention: Within the finance industry, as well as the
finance line of business, determining credit risk and identifying fraud is a top
priority in conducting business.
• Predictive analytics can be used to learn potential areas of risk from various
data points, enabling the organization to make more informed decisions.
• It can also be used to identify and prevent fraudulent transactions by monitoring
and flagging transactions that stray from typical or expected behavior.
 Prescriptive Analytics
• Prescriptive analytics takes what has been learned through
descriptive and predictive analysis and goes a step further by
recommending the best possible courses of action for a business.
• This is the most complex stage of the business analytics process,
requiring much more specialised analytics knowledge to perform, and
for this reason it is rarely used in day-to-day business operations. 
• predictive analytics looks at historical data using statistical
techniques to make predictions about the future, machine learning, a
subset of artificial intelligence, refers to the ability of a computer
system to understand large – often huge – amounts of data, without
explicit directions, and while doing so adapt and become increasingly
smarter.
Prescriptive analytics

• Prescriptive analytics anticipates what, when and, importantly, why

something might happen.
• After considering the possible implications of each decision option,
recommendations can then be made in regard to which decisions will
best take advantage of future opportunities or mitigate future risks.
• prescriptive analytics predicts multiple futures and, in doing so, makes
it possible to consider the possible outcomes for each before any
decisions are made.
• When prescriptive analytics is performed effectively, findings can have
a real impact on business strategy and decision making to improve
things such as production, customer experience and business growth.
Advantages disadvantages of prescriptive analytics

• Prescriptive analytics, when used effectively, provides

invaluable insights in order to make the best possible, data-
based decisions to optimise business performance.
• However, as with predictive analytics, this methodology
requires large amounts of data to produce useful results, which
isn’t always available.
• Also, machine learning algorithms, on which this analysis often
relies, cannot always account for all external variables.
• On the flip side, the use of machine learning dramatically
reduces the possibility of human error. 
Examples of prescriptive analytics
⮚a commonly used prescriptive analytics tool is GPS technology, since it provides
recommended routes to get the user to their desired destination based on such things as
journey time and road closures.
⮚ In this instance, prescriptive analysis ‘optimises an objective that measures the distances
from your starting point to your destination and prescribes the optimal route that has the
shortest distance.’
Other areas of prescriptive analysis application, according to data analytics firm Sisense,
include the following:
• Oil and manufacturing – tracking fluctuating prices  
• Manufacturing – improving equipment management, maintenance, price modelling,
production and storage
• Healthcare – improving patient care and healthcare administration by evaluating things
such as rates of readmission and the cost-effectiveness of procedures
• Insurance – assessing risk in regard to pricing and premium information for clients
• Pharmaceutical research – identifying the best testing and patient groups for clinical trials.
Prescriptive analytics(Airlines)
•  prescriptive analytics can be used by hospitals and clinics to
improve the outcomes for patients.
• It puts healthcare data in context to evaluate the cost-effectiveness
of various procedures and treatments and to evaluate official clinical
methods.
• It can also be used to analyze which hospital patients have the
highest risk of re-admission so that healthcare providers can do
more, via patient education and doctor follow-up to stave off
constant returns to the hospital or emergency room.
Prescriptive analytics(Airlines)
• Suppose you are the CEO of an airline and you want to maximize your company’s profits.
• Prescriptive analytics can help you do this by automatically adjusting ticket prices and
availability based on numerous factors, including customer demand, weather, and
gasoline prices.
• When the algorithm identifies that this year’s pre-Christmas ticket sales from Los Angeles
to New York are lagging last year’s, for example, it can automatically lower prices, while
making sure not to drop them too low in light of this year’s higher oil prices.
• At the same time, when the algorithm evaluates the higher-than-usual demand for tickets
from St. Louis to Chicago because of icy road conditions, it can raise ticket prices
automatically.
• The CEO doesn’t have to stare at a computer all day looking at what’s happening with
ticket sales and market conditions and then instruct workers to log into the system and
change the prices manually; a computer program can do all of this and more—and at a
faster pace, too.
Ethics in data management   
• Facebook's recent data breach, if found to violate the EU General Data
Protection Regulation (GDPR), could cost them 4% of their global revenue (or
$1.63 billion) in fines.
• This resonated as a warning shot to enterprises across the globe.
⮚Why should businesses handle their users' data ethically?
• The answer is simple: it helps them earn their customers' trust. Every organization is, at
its core, in the people business
• . The trust they establish determines their success.
• That trust is notoriously easy to lose; a single instance of unethical behavior by a
company could jeopardise its future.
• Companies have expended enormous amounts of money and effort to fix small
negligences in ethical data handling..
• To preserve consumer trust, companies will need to go beyond data security and
privacy to ensure that there is ethical handling of data within and beyond the
organisation. Clearly defined and communicated principles and practices can drive
honest and appropriate behaviors. That's where Data Governance comes in.
Ethics in data management   
• defining ownership of data,
• obtaining consent to collect and share data,
• protecting the identity of human subjects and
• their personal identifying information, and
• the licensing of data. Etc
Main
• What are the 3 basic data ethics?
• PRINCIPLE ONE: Minimising the risk of harm.
• PRINCIPLE TWO: Obtaining informed consent.
• PRINCIPLE THREE: Protecting anonymity and confidentiality. PRINCIPLE
FOUR: Avoiding deceptive practices.
Ethics in data management   

• Before enterprises can initiate Data Governance, they must identify the
regulations and frameworks relevant to their businesses.
• Data Governance programs could benefit from ethics frameworks from the
government and/or the wider public sector.
• The UK's Department for Digital, Culture, Media & Sport, for example,
formulated one in service of its National Data Strategy.
• It outlines principles on how data should be used in the public sector,
emphasising the importance of collective standards and ethical
frameworks.
• Such frameworks serve as guidelines on understanding the effects of
technology, data workflows and data sharing, as well as their ethical
and real-world consequences
Ethics in data management   

• Data ethics describes a behavior code, often focused on what is wrong

and what is right.
⮚This encompasses the following:
• Data management – This includes recording, generation, curation,
dissemination, processing, use, and sharing.
• Algorithms – This includes machine learning al, robots, and artificial
agents.
• Corresponding practices – It includes programming, responsible
innovation, professional codes, and hacking.
ethical principles
•experts agree on the following ethical principles for using data:
1.
Privacy customer identity and data should remain private – The term privacy does
not mean confidentiality, as private information might need for auditing based on the
requirements in the legal procedure. However, this private data was acquired from an
individual with full consent. It is also noted that the data should not be revealed for the
utilization of other individuals or companies, allowing them to track their identity.
2.
Shared private information should always remain private – In most cases, third-
party companies share sensitive data. The typical examples of these are locational,
financial, and medical data. Also, they need to have limitations on how the data can be
shared for privacy and legal concern.
3.
Customers should exercise a transparent view of how the data is being sold or
utilized. They also need to have the ability to handle the flow of their private data
across third-party and massive analytical systems.
4.
There should be no interference between big data and human will. This is one of
the ethical principles for using data as big data analytics can determine and even
moderate who we are before making up our minds. Organizations need to start to
ponder about the types of inferences and predictions that should be and not allowed.
5.
Big data usage without biases
Ethical principles

Ethical principles for using data provide a high-level and wide context
for resolving ethical predicaments, namely:
• Secure vulnerable humans who could be impaired by the activities in
their professions;
• Enhance and protect the trust and reputation for the profession;
• Give a basis for public evaluation and expectations of the profession;
• Make the profession as a diverse moral public worthy of self-
sufficiency from external regulation and control;
• Serve as a guide for adjudicating disputes among organizations,
both non-members and members;
• Make institutions buoyant in the face of external burdens; and
• https://www2.deloitte.com/us/en/insights/industry/public-sector/chief-
data-officer-government-playbook/managing-data-ethics.html
• India : The new law, the Personal Data Protection Bill (PDP), is
currently in front of parliament and was proposed to effect a
comprehensive overhaul of India's current data protection regime,
which today is governed by the Information Technology Act, 2000.
• PDP Bill proposes that the processing of personal data must
comply with seven principles for processing, namely: (i) processing
of personal data has to be fair and reasonable; (ii) it should be for a
specific purpose; (iii) only personal data necessary for the
purpose should be collected; (iv) it should be lawful;