business analytics xime 2012 module1

8/3/2019 Business Analytics XIME 2012 Module1

1/21

Introduction to Business Analytics

- For XIME

Prithvijit RoyCEO & Founder, BRIDGEi2i Analytics Solutions

[email protected]

January 2012

@ 2012 BRIDGEi2i Analytics Solutions Pvt. Ltd. All rights reserved
mailto:[email protected]:[email protected]:[email protected]


2/21


3/21

CXOs tough balancing act

Improve

Performan

ce

Maximize

Return

Mitigate

Risk

Increasing

Agility

Maximize Lifetime Value of acustomer engagement

through promotions/loyalty

Proactive crisis management by

predicting natural catastrophes over

the next 5 yearsPredicting employee attrition in the

BPO industry to minimize service

disruptions

POS fraud detection in a credit

card industry

Optimize Resource

Efficiency

&

Maximize Yield


4/21

What is Analytics?

Analytics often involves studying past historical data to research

potentialtrends, to analyze the effects of certain decisions or

events, or to evaluate the performance of a given tool or scenario.

The goal of analytics is to improve the business by gaining

knowledge which can be used to makeimprovements or changes.*

* As defined by Business Dictinorary.com
http://www.businessdictionary.com/definition/historical-data.htmlhttp://www.businessdictionary.com/definition/research.htmlhttp://www.investorwords.com/10666/potential.htmlhttp://www.businessdictionary.com/definition/trend.htmlhttp://www.investorwords.com/210/analyze.htmlhttp://www.investorwords.com/9552/effect.htmlhttp://www.businessdictionary.com/definition/decision.htmlhttp://www.businessdictionary.com/definition/events.htmlhttp://www.investorwords.com/9612/evaluate.htmlhttp://www.businessdictionary.com/definition/performance.htmlhttp://www.businessdictionary.com/definition/tool.htmlhttp://www.businessdictionary.com/definition/scenario.htmlhttp://www.businessdictionary.com/definition/goal.htmlhttp://www.businessdictionary.com/definition/improve.htmlhttp://www.businessdictionary.com/definition/business.htmlhttp://www.businessdictionary.com/definition/knowledge.htmlhttp://www.investorwords.com/10256/make.htmlhttp://www.businessdictionary.com/definition/improvements.htmlhttp://www.businessdictionary.com/definition/changes.htmlhttp://www.businessdictionary.com/definition/changes.htmlhttp://www.businessdictionary.com/definition/improvements.htmlhttp://www.investorwords.com/10256/make.htmlhttp://www.businessdictionary.com/definition/knowledge.htmlhttp://www.businessdictionary.com/definition/business.htmlhttp://www.businessdictionary.com/definition/improve.htmlhttp://www.businessdictionary.com/definition/goal.htmlhttp://www.businessdictionary.com/definition/scenario.htmlhttp://www.businessdictionary.com/definition/tool.htmlhttp://www.businessdictionary.com/definition/performance.htmlhttp://www.investorwords.com/9612/evaluate.htmlhttp://www.businessdictionary.com/definition/events.htmlhttp://www.businessdictionary.com/definition/decision.htmlhttp://www.investorwords.com/9552/effect.htmlhttp://www.investorwords.com/210/analyze.htmlhttp://www.businessdictionary.com/definition/trend.htmlhttp://www.investorwords.com/10666/potential.htmlhttp://www.businessdictionary.com/definition/research.htmlhttp://www.businessdictionary.com/definition/historical-data.html


5/21

Emerging trends

Explosion ofdigital

information

Better storageand computing

power

Real-timedecisions in a

dynamicenvironment

Demonstratedimpact ofanalytics

New levers fordifferentiation


6/21

Data, information, insights, impact

The analytics JOURNEYData unrefined and factual.Dell sold a laptop to Customer A for $1000

Information data that has meaning for a user.

Total revenues for Dell from sale of notebooks

in Q1 is $200 Mn (What)

Insights is a combination of information,experience and analysis.

Total revenue from sale of notebooks have

seen a 10% fall because of an 12% fall in traffic

to the store (Why & What)

ImpactActionable Intelligence.

Targeted web marketing campaigns toincrease traffic (How)

Why is this transformation important?

Looks like youve got all the data

where is the hold up?

...helps take informed decisions


7/21

The Analytics journey

What happened?

When?

How much?

Why it happened?

What will happen next?

How to operationalize?

How to sustain?

Capture relevant data

Identify key metrics

Design & generate reports

Identify drivers & trends

Understand behavior

Predict outcomes

Build & implement strategies

Enterprise-wide adoption

Metrics & reporting

Descriptive statistics

Visualization

Underlying trends

Predictive models

Optimization

Real time decisions tools

Change management

Institutionalization

INFORMATION INSIGHTS IMPACT

INPUT OUTCOME

Internal & External Data with

structured /unstructured content

Accelerated Growth, Risk

Mitigation, Cost Reduction

Destination

Analytics

Maturity of

Firm

Business

Problem

Addressed

Analytics Play

Business analytics is increasingly being adopted by companies in

decision making to multiply business value based on data


8/21

The Analytics spectrum

Degree of Intelligence

StandardReports

Ad hocReports

PredictiveModeling

Query/Drill down

Forecasting/Extrapolation

Optimization

CompetitiveAdvantage

StatisticalAnalysis

What happened?

How many, how often, where?

Where exactly isthe problem?

Why is this happening?

What if the trend continues?

What actions are needed?

What will happen next?

Whats the best way for it to happen?

BusinessIntelligence

BusinessAnalytics

Source: Adapted from Davenport, Competing on Analytics

To make analytics relevant for businesses it is important to translate it into

applications

Alerts


9/21

Diaper & beer StoryData Mining Discovery

1. Largest chain of large

discount department

stores in the US

2. World's largest public

corporation by revenue

($408 billion)

3. More than 8,969 retailunits under 55

different banners

Walmart placed Diaper & Beer together on the shelves

POS Data Loyalty Card

Data

Diapers Beer Young

American

Fathers

Shopping

between 5-7

pm
http://www.google.co.in/imgres?imgurl=http://www.j2softsolutions.com/image/pos1.jpg&imgrefurl=http://www.j2softsolutions.com/Products.aspx&h=300&w=300&sz=47&tbnid=eNECW8LM7cZUgM:&tbnh=116&tbnw=116&prev=/images?q=point+of+sale&zoom=1&q=point+of+sale&hl=en&usg=__bFpZCBjFZ9QVI_2dgEJV5JJaXeM=&sa=X&ei=MHddTZXcOMmXtwfTlez_Cg&ved=0CEAQ9QEwAghttp://www.google.co.in/imgres?imgurl=http://4.bp.blogspot.com/_6Y-NXZmDcxU/SqBNlzOGw4I/AAAAAAAAGG0/L3ZyK1ceDes/s320/walmart_card.gif&imgrefurl=http://arcticcompass.blogspot.com/2009/09/those-pesty-id-cards-everyone-will-have.html&usg=__T_T3NeLHZQjBIafsNi_YNHn_0r8=&h=250&w=303&sz=37&hl=en&start=1&zoom=1&um=1&itbs=1&tbnid=bodR0PJzYKusjM:&tbnh=96&tbnw=116&prev=/images?q=walmart+loyalty+card&um=1&hl=en&sa=N&tbs=isch:1&ei=T3ddTaC6Dc6ctwe4wMjJCghttp://www.google.co.in/imgres?imgurl=http://4.bp.blogspot.com/_6Y-NXZmDcxU/SqBNlzOGw4I/AAAAAAAAGG0/L3ZyK1ceDes/s320/walmart_card.gif&imgrefurl=http://arcticcompass.blogspot.com/2009/09/those-pesty-id-cards-everyone-will-have.html&usg=__T_T3NeLHZQjBIafsNi_YNHn_0r8=&h=250&w=303&sz=37&hl=en&start=1&zoom=1&um=1&itbs=1&tbnid=bodR0PJzYKusjM:&tbnh=96&tbnw=116&prev=/images?q=walmart+loyalty+card&um=1&hl=en&sa=N&tbs=isch:1&ei=T3ddTaC6Dc6ctwe4wMjJCghttp://www.google.co.in/imgres?imgurl=http://upload.wikimedia.org/wikipedia/commons/thumb/d/d6/Wall_clock.jpg/300px-Wall_clock.jpg&imgrefurl=http://commons.wikimedia.org/wiki/Commons:Featured_picture_candidates/Log/March_2006&usg=__aa2M8HdeQ--B2SAx6UjeJp52M8k=&h=310&w=300&sz=22&hl=en&start=3&zoom=1&um=1&itbs=1&tbnid=YUT9Qdwa8jKzLM:&tbnh=117&tbnw=113&prev=/images?q=clock&um=1&hl=en&tbs=isch:1&ei=fnldTfC7HYW3tgeW8LHRCghttp://www.google.co.in/imgres?imgurl=http://www.wired.com/news/images/full/diaper3_f.jpg&imgrefurl=http://www.wired.com/science/discoveries/news/2004/04/63182&usg=__7GjX1VXiyotpFf0DU5_1Oo2uvvM=&h=375&w=500&sz=31&hl=en&start=5&zoom=1&um=1&itbs=1&tbnid=pn5G1CO_i59JiM:&tbnh=98&tbnw=130&prev=/images?q=diapers&um=1&hl=en&tbs=isch:1&ei=3nddTenFC4HXtgfc2YzDCghttp://www.google.co.in/imgres?imgurl=http://cropandsoil.oregonstate.edu/sites/default/files/news/beer-styles1.jpg&imgrefurl=http://www.gondwanaclub.net/beer-cans&usg=__FXz9TkHFmsLa5O7IX3NJNjyCQkA=&h=314&w=311&sz=26&hl=en&start=2&zoom=1&um=1&itbs=1&tbnid=GJ2X5xKvvm4iuM:&tbnh=117&tbnw=116&prev=/images?q=beer&um=1&hl=en&tbs=isch:1&ei=l3ddTdDyBIGFtgfiopHDCghttp://www.google.co.in/imgres?imgurl=http://4.bp.blogspot.com/_6Y-NXZmDcxU/SqBNlzOGw4I/AAAAAAAAGG0/L3ZyK1ceDes/s320/walmart_card.gif&imgrefurl=http://arcticcompass.blogspot.com/2009/09/those-pesty-id-cards-everyone-will-have.html&usg=__T_T3NeLHZQjBIafsNi_YNHn_0r8=&h=250&w=303&sz=37&hl=en&start=1&zoom=1&um=1&itbs=1&tbnid=bodR0PJzYKusjM:&tbnh=96&tbnw=116&prev=/images?q=walmart+loyalty+card&um=1&hl=en&sa=N&tbs=isch:1&ei=T3ddTaC6Dc6ctwe4wMjJCghttp://www.google.co.in/imgres?imgurl=http://www.j2softsolutions.com/image/pos1.jpg&imgrefurl=http://www.j2softsolutions.com/Products.aspx&h=300&w=300&sz=47&tbnid=eNECW8LM7cZUgM:&tbnh=116&tbnw=116&prev=/images?q=point+of+sale&zoom=1&q=point+of+sale&hl=en&usg=__bFpZCBjFZ9QVI_2dgEJV5JJaXeM=&sa=X&ei=MHddTZXcOMmXtwfTlez_Cg&ved=0CEAQ9QEwAghttp://upload.wikimedia.org/wikipedia/commons/1/16/US_map_-_geographic.pnghttp://www.google.co.in/imgres?imgurl=http://www.featurepics.com/FI/Thumb300/20081118/Young-American-Male-Holding-Coffee-Mug-Thumbs-969035.jpg&imgrefurl=http://www.featurepics.com/online/Young-American-Male-Holding-Coffee-Mug-Thumbs-969035.aspx&usg=__PizM-2zJq2vu0tQYQJhBLR4c9DY=&h=449&w=299&sz=22&hl=en&start=3&zoom=1&um=1&itbs=1&tbnid=DB53F3J5M9c7pM:&tbnh=127&tbnw=85&prev=/images?q=young+american+male&um=1&hl=en&tbs=isch:1&ei=8HhdTdGJB9STtwez9p3GCg


10/21

Enablers for successful Analytics

BUSINESS CONTEXT

Pillars of the analytics bridge

TECHNOLOGY

ADOPTION

ANALYTICS RIGOR PEOPLE PRACTICE CULTURE

Handling big data

Cutting-edge statistical

techniques

Analytics embedded in

decision making

Industry & functional

understanding

Company priorities

Change management

Enterprise data linkage

Analytics tools

Data privacy andcompliance

Attract analytical talent

Develop / retain talents

Knowledgemanagement

Information based

decisions

Structured innovation

Implementation focus

Multiplying returns from analytics requires a balanced focus


11/21

Functional

applications

Targeted acquisition Lifecycle valueenhancement

Customer experiencemanagement

Enhance retention

Customerintelligence

Market intelligence Maximize return onmarketing investment

Digital media effectiveness

Marketingeffectiveness

Price setting Discount optimization

Price realization

Priceoptimization

Sales forecasting

Sales force planning

Sales force enablement

Saleseffectiveness

Customer riskmanagement

Fraud detection Portfolio risk assessment

Riskmanagement

Procurement spendoptimization

Human resourceeffectiveness

Customer service planning

Operationsplanning

BUSINESS

CONTEXT


12/21

Industry

applications

Banking & Financial Services

Cross Sell / Up-Sell

Credit Risk Management

Customer ExperienceManagement

Insurance

Lead Generation

Claims Management

Capital Adequacy

Public Sector

Service Quality Management

Education Program Effectiveness

Revenue Management

Telecom

Revenue Assurance

Churn Management

Asset Optimization

Retail & Consumer Goods

Market Mix & PromoOptimization

Increase Customer Loyalty

Assortment Planning

Technology

Product Usage Experience

E-commerce effectiveness

Pricing Optimization

BUSINESS

CONTEXT


13/21

Data types

Financial Information

Revenue, Order, Shipment, Margin

Marketing Spends and Cost information

Pricing, deal, special discounts etc

List price, catalogue, people cost

Marketing Targeting Information

Campaign targeting, cost & response

Leads and opportunities

Channel and RoI information

Web traffic data

Support & Touch Point Information

Support Contracts

Call Center data

Warranty and Support Satisfaction data

Product Usage Data

External Information

Company financials and profile

Consumer demographics

Market Research data Channel and Partner feedback data

Market Tracking data

Illustration Data available to Marketing function of a typical technology company

TECHNOLOGY

ADOPTION


14/21

Data linkages

TECHNOLOGY

ADOPTION


15/21

Analytics tools

SAS The most popular tool in the data analysis space

IBM SPSS

Powerful tool used very highly in market research space.

Insightful Miner

Well respected statistical tools, now moving into mining

Oracle

Integrated data mining into the database

Angoss

One of the first data mining applications (as opposed to tools). Good for Decision Tree analysis

IBM Unica

Great mining technology, focusing less on analytics and more on campaign operations

SPlus , R

Open source. Mostly used in academic and research reasons. Less costly, includes new techniques

TECHNOLOGY

ADOPTION


16/21

Handling big data

Data Consolidation

Merging diverse data

Managing Granularity of data

Univariate Analysis

Missing Value Imputation

Mean / Median / Mode Imputation

Special missing values

Regression Imputation

Outlier Treatment

Delete / ImputeCapping of values

Creating Final data for analysisCreate New Derived VariablesSampling for analysisCleaning

ANALYTICS

RIGOUR


17/21

TESTING OF HYPOTHESIS & ASSESS DRIVERS CLASSIFICATION INTO HOMOGENEOUS SEGMENTS

Statistical testing of hypothesis

and estimation of parameters ,

building business cases and

analysis of key drivers

Identify homogeneous segments

based on key attributes behaving

in similar manner ( cluster, tree &

machine learning techniques)

PREDICTION OF EVENTS FORECASTING OF KEY METRICS

Prediction of certain business

events ( sales, attrition, cost,

risk etc.) based on attributes

impacting the same

Forecasting of key metrics based on

trend and patterns observed over

time and patterns in key influencing

attributes

SIMULATION OF SYSTEMS OPTIMIZATION OF SPECIFIC OBJECTIVE

Simulation of scenarios to

assess variability of business

metrics based on assumptions

on key external factors

Optimization of business objective

based on multiple operative

constraints

TechniquesANALYTICS

RIGOUR


18/21

Skill development

StatisticsMathematicsEconometric

s

ComputerScience

databases,programing

Datavisualization

skills

Adaptabilityto

continuouschange inanalytics

Businesscontext todrive ROI

fromanalytics

PEOPLE

PRACTICE


19/21

Implementation focus

13-Jan-12

RECOMMENDATION

ENGINESCORING

SERVICE

CUSTOMER

ANALYTICS

PRODUCT

ANALYTICS

MODELS +

CUSTOMER, PRODUCT

DATA

SUPPLY CHAIN

SERVICESUPPLY CHAIN

ANALYSIS

MARKETING

& PRODUCT

MANAGEMENT

MARKETIING

-Internal /

External sources

SUPPLY

CHAIN

Internal / External

sources

MARKETING

DATA

PRODUCT

DATA

REALTIME

DATA

CALL CENTER

WEB STORE

PUBLIC/PRIVATE

ADMINISTRATION

RULES & METADATA

Availability Lead TimeOverstock

CustomerPropensity

ProductAssociation

ConfigurationMargin Product Families

Product Hierarchies

MARKETING

SERVICE

PRODUCT

SERVICE

CampaignsCatalogs

SUPPLY CHAIN

DATA

SALES

CLIENT BUSINESS MGR

Data selection /collection Data preparation/ modeling Pattern discovery / deployment Monitoring andimprovement

INTERNAL DATA

- Customer Touch points

- Business Performance

Data

- Transactional Data

EXTERNAL DATA

- Prospect Demographics

- Survey Data

- Web, Publications

CULTURE


20/21

Why bother about analytics?

Analytics is mission critical last remaining source of differentiation

Competing on Analytics, by Thomas Davenport

Some companies have built their very businesses on their ability to

collect, analyze, and act on data.

Analytics competitors are the leaders in their varied fieldsconsumer

products finance, retail, and travel and entertainment among them .

Super Crunchers, by Ian Ayers

In the past, one could get by on intuition and experience. Times have changed.

Today, the name of the game is data. Steven D. Levitt, author of Freakonomics

Data-mining and statistical analysis have suddenly become cool.... Dissecting

marketing, politics, and even sports, stuff this complex and important shouldn't be

this much fun to read Wired


21/21

THANK YOU

[email protected]

Linkedin - http://www.linkedin.com/company/bridgei2i-analytics-solutions

Facebookhttp://www.facebook.com/pages/BRIDGEi2i-Analytics-Solutions/127891620624459

Twitter - @BRIDGEi2i

Webwww.bridgei2i.com
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