Introduction to Business Analytics and Data Analysis
This content introduces the concepts of business analytics, including descriptive, predictive, and prescriptive analytics, as well as the process of converting raw data into useful information for decision-making. It emphasizes the importance of statistical analysis and data-driven decision-making in transforming data into insights for better decision-making.
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Highline Class, BI 348 Highline Class, BI 348 Basic Business Analytics using Excel, Basic Business Analytics using Excel, Chapter 01 Intro to Business Analytics Intro to Business Analytics Chapter 01 1
Topics Raw Data Into Useful Information Business Analytics (Textbook): Business Analytics (Textbook): Descriptive Analytics Descriptive Analytics Predictive Analytics Predictive Analytics Prescriptive Statistics Prescriptive Statistics Big Data Big Data Steps In Making A Decision Steps In Making A Decision Types Of Decisions Types Of Decisions Approaches To Decision Making Approaches To Decision Making 2
Raw Data Into Useful Information Data Analysis (From Data Analysis (From Busn Busn 216 and Converting raw data into useful information for decision makers Converting raw data into useful information for decision makers Statistical Analysis ( Statistical Analysis (Busn Busn 210): 210): Statistics is the art and science of collecting, analyzing, presenting and Statistics is the art and science of collecting, analyzing, presenting and interpreting data to help make informed decisions. interpreting data to help make informed decisions. Analysis (Merriam Analysis (Merriam- -Webster dictionary): Webster dictionary): A careful study of something to learn about its parts, what they do and A careful study of something to learn about its parts, what they do and how they relate to each other how they relate to each other An explanation of the nature and meaning of something An explanation of the nature and meaning of something Analytics (Merriam Analytics (Merriam -Webster dictionary): Webster dictionary): Information resulting from systematic analysis of data or statistics Information resulting from systematic analysis of data or statistics Business Analytics (textbook): Business Analytics (textbook): Scientific process of transforming data into Scientific process of transforming data into insight for better decisions insight for better decisions 216 and Busn Busn 218): 218): 3
Business Analytics (Textbook): Business Analytics (Textbook): Scientific process of transforming data into insight for better Scientific process of transforming data into insight for better decisions decisions Data driven decision making Data driven decision making Fact Fact- -based decision making based decision making Scientific process such as: Queries, Linear Regression, and Scientific process such as: Queries, Linear Regression, and Optimization Optimization Business Analytics has three parts: Business Analytics has three parts: Descriptive Analytics Descriptive Analytics Describing the past Describing the past Predictive Analytics Predictive Analytics Build models that help predict the unknown future Build models that help predict the unknown future Prescriptive Prescriptive Analytics Analytics Build models to help predict the best course of action Build models to help predict the best course of action 4
Descriptive Analytics Descriptive Analytics Set of techniques that describe what has happened in the past. Set of techniques that describe what has happened in the past. Examples: Examples: Data Queries Data Queries Like a Filter in Excel or an Access Query Like a Filter in Excel or an Access Query Reports Reports Like an Income Statement, a Regional Report or a PivotTable with multiple Like an Income Statement, a Regional Report or a PivotTable with multiple Criteria Criteria Descriptive Statistics Descriptive Statistics Examples Examples: : Mean Mean, , Median MedianMode, Standard Mode, Standard Deviation Data Visualization Data Visualization Examples; Charts, Tables, Conditional Formatting Examples; Charts, Tables, Conditional Formatting What if Excel models What if Excel models Like Income Statement Budget with Assumption Table or a Fixed Variable Like Income Statement Budget with Assumption Table or a Fixed Variable Cost Analysis Cost Analysis Data Dashboards Data Dashboards Collection of items such as tables, charts and descriptive statistics that will Collection of items such as tables, charts and descriptive statistics that will update as new data arrives update as new data arrives Deviation, , Correlation Correlation 5
Predictive Analytics Predictive Analytics Set of techniques that use models constructed from past data Set of techniques that use models constructed from past data to: to: Predict the future Predict the future or or Ascertain impact of one variable on another Ascertain impact of one variable on another Examples: Examples: Linear Regression Linear Regression Models to help predict one variable based on a one or more other Models to help predict one variable based on a one or more other variables) variables) Time Series Analysis & Forecasting Time Series Analysis & Forecasting Using data to make forecasts of unknown future Using data to make forecasts of unknown future Data Mining (not covered in this class) Data Mining (not covered in this class) Methods to reveal patterns and relationships in data Methods to reveal patterns and relationships in data 6
Prescriptive Prescriptive Analytics Analytics Set of techniques to indicate the best course of action; what Set of techniques to indicate the best course of action; what decision to make to optimize outcome decision to make to optimize outcome. Examples: Examples: Optimization models Optimization models A mathematical model that gives the best decision, subject to the A mathematical model that gives the best decision, subject to the situations constraints situations constraints We ll use the Excel feature called Solver which can tell us things like We ll use the Excel feature called Solver which can tell us things like what number of units to produce to maximize profit. what number of units to produce to maximize profit. Simulation Simulation Use Native Excel Functions to create a simulation Use Native Excel Functions to create a simulation Decision Analysis (not covered in this class) Decision Analysis (not covered in this class) Advanced Analytics Advanced Analytics Predictive Analytics and Prescriptive Predictive Analytics and Prescriptive Analytics 7 Analytics
Big Data Big Data A set of data that cannot be managed, processed or analyzed with A set of data that cannot be managed, processed or analyzed with commonly available software in a reasonable amount of time. commonly available software in a reasonable amount of time. Why do we have so much data now: Why do we have so much data now: Every time you buy something, the scanner beep at the register records Every time you buy something, the scanner beep at the register records a lot of data such as price, product name, time, date, location, sales a lot of data such as price, product name, time, date, location, sales person and more. person and more. All our personal devices collect vast amounts of data everyday All our personal devices collect vast amounts of data everyday Social media Social media E E- -commerce data commerce data Almost every click on the internet Almost every click on the internet According to Google: Amount of data generated every 48 hours is According to Google: Amount of data generated every 48 hours is equal to all data created from the beginning of civilization to 2003. equal to all data created from the beginning of civilization to 2003. Business Analytical methods are used more often now because of: Business Analytical methods are used more often now because of: Vast amount of data Vast amount of data Improved computational approaches and algorithms to handle the vast Improved computational approaches and algorithms to handle the vast amounts of data amounts of data Faster computers and more ability to store vast amounts of data Faster computers and more ability to store vast amounts of data 8
Steps In Making A Decision: Steps In Making A Decision: Identify and define the problem Identify and define the problem Determine criteria that will be used to evaluate alternative Determine criteria that will be used to evaluate alternative solutions solutions Determine the set of alternative solutions Determine the set of alternative solutions Evaluate the alternatives with the criteria Evaluate the alternatives with the criteria Choose the alternative Choose the alternative 9
Types Of Decisions: Types Of Decisions: Strategic Decisions Strategic Decisions High High- -level manager decisions concerning the overall direction, goals level manager decisions concerning the overall direction, goals and objectives of the organization (3 and objectives of the organization (3 - - 5 year time span) Examples: Examples: Does a local company try and sell out of the state or internationally? Does a local company try and sell out of the state or internationally? Does an online only company try to open brick and mortar stores? Does an online only company try to open brick and mortar stores? Tactical Decisions Tactical Decisions Mid Mid- -level manager decisions about how organization can achieve the level manager decisions about how organization can achieve the goals and objectives of the organization (1 year or 6 month time span) goals and objectives of the organization (1 year or 6 month time span) Examples: Examples: What states or cities or locations to sell in? What states or cities or locations to sell in? Operational Operational Decisions concerning day to day operations such as number of products Decisions concerning day to day operations such as number of products to make or order, or how to schedule events. to make or order, or how to schedule events. 5 year time span) 10
Approaches To Decision Making: Approaches To Decision Making: Tradition Tradition (Probably based on someone s past experience from way back) (Probably based on someone s past experience from way back) Intuition Intuition (Probably based on persons unconscious past experiences) (Probably based on persons unconscious past experiences) Rule of Thumb Rule of Thumb (Probably based on past experiences) (Probably based on past experiences) Data Based Decisions Data Based Decisions (Based on past experiences, but in a more objective way) (Based on past experiences, but in a more objective way) 11
