Business

Intelligence
BTECCE22607

Unit 1: Introduction to Business

Intelligence
by Prof. Divya Munot
What this course is all about?
Generating Intelligence for Business
What is Intelligence ?
What do intelligent people do or how do intelligent people function?
How Many Ducks Do You See?
Where does intelligence come from?
, .
Learning is associated with intelligence or intelligent all intelligent beings are able to learn

Learn from what ? - Lessons

Lessons come from where ? - Lessons come from the environment or the nature, it is around us that teaches us.

What does nature consists of ? - In the context of this course, we learn from data. Nature offers us data.
Where does intelligence play a role in business?
Intelligence is a resource or capability for decision making. An intelligent manager is someone who makes intelligent decisions.
And what is an intelligent decision? An intelligent decision is an informed decision.
You can take decisions in informed way(based on prior information) and uninformed way(randomly, without any prior
information).
Information is the key to making successful decisions.
 Data is the "new oil"
For intelligence, data is the source. Data is the raw material. And data needs to be converted into information to support
decisions.
This process of converting data to intelligence for supoorting decision making in businesses is Business Intelligence.
What is Business Intelligence?
BI(Business Intelligence) is a set of processes, architectures, and technologies that convert raw data into meaningful
information that drives profitable business actions.
It is a suite of software and services to transform data into actionable intelligence and knowledge.
BI has a direct impact on organizationʼs strategic, tactical and operational business decisions.
BI supports fact-based decision making using historical data rather than assumptions or gut feeling.
BI tools perform data analysis and create reports, summaries, dashboards, maps, graphs, and charts to provide users with
detailed intelligence about the nature of the business.
Engage & Earn
Participation Points: For each question you answer or each activity you
volunteer for during lectures, you will earn 10 points.
Grace Marks: If you accumulate more than 100 points by the end of
the semester, you will be eligible to receive grace marks.
Attendance Penalty: If you are absent for a class (lecture or practical),
4 points will be deducted from your total points for each absence.
Negative Points: If your total points fall below zero by the end of the
semester, the deficit will be deducted from your final course marks.
Bonus Points: Earn 100 points if you successfully publish a research
paper related to this course in IEEE or Scopus.
Why is BI important?
Provides a Competitive Improves Decision Gain New Customer
Advantage Making Insights
By leveraging BI, organizations can BI provides decision-makers with Companies can utilize BI to
access real-time insights into their access to accurate and timely data, understand what their consumers
operations, customers, and market allowing them to make informed are buying and the buying motive,
trends which can help companies decisions. to create products and product
stay ahead of the competition. With the ability to drill down into improvements to meet their
specific data sets, decision-makers expectations and needs and, as a
can identify trends and patterns result, improve organizationʼs
that might not be apparent bottom-line.
otherwise.
Why is BI important?
Sales Insight Facilitates Predictive Enhances Real-Time
BI systems help organizations with Analysis Reporting Capabilities
everything from identifying new BI can help organizations predict BI can enhance an organizationʼs
customers, tracking and retaining future trends and events by reporting capabilities by providing
existing ones, and providing post- analyzing historical data. By access to real-time data. With the
sale services. identifying patterns and trends, ability to generate reports on
organizations can make predictions demand, organizations can quickly
about future events and adjust their respond to changing market
operations accordingly. conditions and adjust their
operations accordingly.
Concepts in Business Intelligence
1 Extract Raw Data
The first component of a BI solution is data from sales records profit and loss statements salary details and more An organization s data exists in
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various systems including CRM ERP and more Due to this fragmentation BI solutions come with robust connectors to centralize everything for
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advanced analysis .

2 Consolidate Information to Data Warehouse

A data warehouse integrates different databases to create relationships Data flows into the warehouse from various sources including transactional
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systems relational databases and more

, .

3 Access and Analyze Data

Once the data consolidates in a single location it is vital to make sense of it Here BI solutions access the information interpret it for trends and
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patterns and present it intuitively

, .

4 Create Dashboards and Reports

Dashboards and reports take complex unintelligible information and output it as digestible patterns trends and insights These tools facilitate
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collaboration within the organization to share findings and discoveries .

Key steps to business intelligence implementation
1. Conduct feasibility study.
2. Gather requirements.
3. Conceptualize and select platform.
4. Plan the project.
5. Develop the solution.
6. Train users.
7. Launch the project.
8. Support and evolve the solution.
1. Feasibility study 2.Requirements 3.Conceptualization 4. Project planning
engineering and platform
4-6 weeks Defining deliverables,
Defining functional and
selection assessing risks, estimating
Analyzing the existing non-functional Defining the desired BI solution BI implementation costs,
business needs and requirements for a BI features, technology stack and TCO and ROI. After fulfilling
analytics environment; solution. These
skills required to fulfill the project.
this step, you get a detailed
eliciting the requirements requirements can be Mapping the proposed solution to project plan, a project
for the future BI solution. further classified into two the requirements.
schedule and a
groups – mandatory and Defining data sources and ETL communication plan.
optional. procedures, data quality
assurance processes, business
intelligence implementation and
user adoption strategies.
5. Development 6. User training 7. Launch 8. Solution support
and evolution
3-4 months ~ 2-4 weeks 2-3 weeks
Throughout the entire BI
Delivering the back end and the Providing end users with Pre-launch user solution lifetime
front end of the BI solution.
user manuals and training acceptance testing to
Implementing ETL processes for sessions. check the BI solution in Further, in the course of BI
each of the data sources, setting evolution, the team can
up data quality management and Adjusting common real-world scenarios.
upgrade the solution with
data security. workflows for each user Deploying the solution in self-service capabilities,
Running quality assurance group, etc. production, ready for end advanced business
procedures to avoid such users to employ.
problems as wrongly calculated
analytics and data science
KPIs, slow BI solution response or capabilities, etc
low-quality UX.
Activity
Company Name: DataGrow Solutions
Industry: E-commerce
Challenge: DataGrow Solutions is struggling with fragmented data spread across multiple platforms. They cannot generate
timely reports or meaningful insights to guide their marketing, sales, and inventory decisions.

The CEO has decided to implement a Business Intelligence (BI) system to address these issues. Your team is a BI consultancy
hired to plan and execute the project.
Real-World Examples of Business Intelligence
Netflix
As the largest subscription streaming service, Netflix leverages business
intelligence and data science to gain new subscribers and enhance user
experiences.
BI solutions create personalized watch lists and compelling artwork while
persuading users to watch their favorite genres.
The recommendation system promotes content to the right audience at
the right time.
Tesla
Tesla, an innovative automotive company, leverages business intelligence
to connect its cars wirelessly to corporate headquarters for data
collection.

It analyzes data to correct and avoid issues like component damage,

traffic or road hazards.

BI helps this automotive disruptor boost customer satisfaction and inform

decisions on future upgrades.
Uber
This California-based transportation company uses business intelligence
to monitor traffic conditions, journey times and durations, driver
availability and customer demand in real time.
It leverages surge pricing and a rating system as a part of its business
model to manage fares and maintain trust between drivers and
customers.
Starbucks
It analyzes data based on various parameters, including consumer
demographics, population density, traffic patterns, average income
levels, public transport hubs and business types in the vicinity to help
them stay on top.

Coffee shops reside at the intersection of the home and office to ensure
visibility and offer the best deals to customers.

BI lets them provide loyalty card programs and a mobile app to track
individual purchase data.

It also helps predict purchases and send personalized offers via app or
email to entice customers and boost sales.
Types of BI users

Professional Data Analyst

The data analyst is a statistician who always needs to drill deep down into data. BI system helps them to get fresh insights to
develop unique business strategies.
Types of BI users

IT Users

These experts ensure the BI system runs smoothly, managing data security, integration, and troubleshooting.
Types of BI users

Executives
These users like CEO, CTO, CFO make high-level decisions, such as setting business goals, identifying growth opportunities,
and shaping strategies.
Types of BI users

Business Users
Business intelligence users can be found from across the organization. There are mainly two types of business users

1. Casual business intelligence user

2. Power user.

The difference between both of them is that a power user has the capability of working with complex data sets, while the
casual user need will make him use dashboards to evaluate predefined sets of data.
Advantages of Business Intelligence
Boost productivity
With a BI program, it is possible for businesses to create reports with a single click, thus saves lot of time and resources. It
also allows employees to be more productive on their tasks.

To improve visibility
BI also helps to improve the visibility of these processes and make it possible to identify any areas which need attention.

Fix Accountability
BI system assigns accountability in the organization as there must be someone who should own accountability and
ownership for the organizationʼs performance against its set goals

It gives a birdʼs eye view

BI system help decision makers get an overall birdʼs eye view through typical BI features like dashboards and scorecards.

It streamlines business processes

BI takes out all complexity associated with business processes. It also automates analytics by offering predictive analysis,
computer modeling, benchmarking and other methodologies.

It allows for easy analytics

BI software has democratized its usage, allowing even nontechnical or non-analysts users to collect and process data
quickly. This also allows putting the power of analytics from the handʼs many people.
Disadvantages of Business Intelligence
Cost
Business intelligence can prove costly for small as well as for medium-sized enterprises. The use of such type of system
may be expensive for routine business transactions.

Complexity
Another drawback of BI is its complexity in implementation of datawarehouse. It can be so complex that it can make
business techniques rigid to deal with.

Limited use
Like all improved technologies, BI was first established keeping in consideration the buying competence of rich firms.
Therefore, BI system is yet not affordable for many small and medium size companies

Time Consuming Implementation

It can take time to set up, implement, and test BI tools before they are fully operational.
Trends in Business Intelligence
Artificial Intelligence: Gartnerʼ report indicates that AI and machine learning now take on complex tasks done by human
intelligence. This capability is being leveraged to come up with real-time data analysis and dashboard reporting.
Collaborative BI: BI software combined with collaboration tools, including social media, and other latest technologies enhance
the working and sharing by teams for collaborative decision making.
Embedded BI: Embedded BI allows the integration of BI software or some of its features into another business application for
enhancing and extending itʼs reporting functionality.
Cloud Analytics: BI applications are offered in the cloud, and more businesses are shifting to this technology. As per their
predictions within a couple of years, the spending on cloud-based analytics will grow 4.5 times faster.
Scope of BI
Future of BI
BI Architecture and Components
Four major components:
Data warehouse, with its source data

Business analytics, a collection of tools for manipulating, mining, and analyzing the data in the data warehouse

Business performance management (BPM) for monitoring and analyzing performance

User interface (e.g., a dashboard)

DATA WAREHOUSING
The data warehouse and its variants are the cornerstone of any medium-to-large BI system.

Originally, the data warehouse included only historical data that were organized and summarized, so end users could easily
view or manipulate data and information.

Today, some data warehouses include current data as well, so they can provide real-time decision support
BUSINESS ANALYTICS
End users can work with the data and information in a data warehouse by using a variety of tools and techniques. These tools
and techniques fit into two major categories.

1. Reports and queries: Business analytics include static and dynamic reporting, all types of queries, discovery of
information, multidimensional view, drill down to details, and so on. These reports are also related to BPM.
2. Data, text, and Web mining and other sophisticated mathematical and statistical tools: Data mining is a process of
searching for unknown relationships or information in large databases or data warehouses, using intelligent tools such as
neural computing, predictive analytics techniques, or advanced statistical methods.
BUSINESS PERFORMANCE MANAGEMENT (BPM)
Also referred to as corporate performance management (CPM).
Business performance management (BPM) is an emerging portfolio of applications and methodology that contains evolving BI
architecture and tools in its core.
BPM extends the monitoring, measuring, and comparing of sales, profit, cost, profitability, and other performance indicators by
introducing the concept of management and feedback.
It embraces processes such as planning and forecasting as core tenets of a business strategy.
THE USER INTERFACE
Dashboards provide a comprehensive visual view of corporate performance measures (also known as key performance
indicators - KPIs), trends, and exceptions. They integrate information from multiple business areas.

Dashboards present graphs that show actual performance compared to desired metrics; thus, a dashboard presents an at-a-
glance view of the health of the organization.

In addition to dashboards, other tools that broadcast information are corporate portals, digital cockpits, and other visualization
tools.

Many visualization tools, ranging from multidimensional cube presentation to virtual reality, are integral parts of BI systems.
How Does Cloud Computing Impacts Business
Intelligence?
Cloud Computing
Cloud computing is a common term that is used for defining anything that involves the delivery of hosting services over the
internet.
A cloud service can be differentiated from traditional web hosting based on three characteristics.
These distinguishing characteristics involve- the cloud is sold on demand, it is elastic, and lastly, the cloud services are
fully managed by the provider.
Innovations in the field of virtualization and distributed computing along with improved access to high-speed internet, has
accelerated the interest of users in cloud computing.

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Cloud Computing Service Categories
Software as a Service Platform as a Service (PaaS) Infrastructure as a Service

(SaaS) (IaaS)
In the case of PaaS, the platform is
SaaS is often referred to as a outsourced instead of a company or The infrastructure-related to
software delivery method for data centre purchasing and computers could include servers,
providing access to software and its managing its own hardware and storage, and networking that is
associated functions remotely as a software layers. delivered as service.
web-based service. Most of the PaaSes have been IaaS has been popular with
Rather than paying for an upfront designed for developers, and they enterprises that appreciate the
fee for purchasing the licensed aim to simplify the process of convenience of having a cloud
software, SaaS customers pay a creating and deploying the vendor for managing their IT
recurring fee amount for software. infrastructure.
subscribing to their services. A web-developer could use PaaS They can even see cost-savings as
Additionally, they can access the for operating system software, Web a result of paying only for the
SaaS from any Internet-connected server software, etc. computing resources that are used.
device at any point in time.
Cloud Computing Service Categories Examples
SaaS - Zoom, Salesforce, Gmail
PaaS - SAP cloud, Oracle Cloud Platform
IaaS - Amazon Web Services (AWS), Google Cloud (GCP), Microsoft Azure
Security in Cloud Computing
Security has remained a primary concern for businesses that contemplate cloud adoption, especially the adoption of the
public cloud.
The public cloud providers share the underlying hardware infrastructure between a large number of customers, as the
public cloud is a multi-tenant environment.
This environment asks for copious isolation between the logically-computed resources.
Also, access to public cloud storage and compute resources are authenticated only by the account login credentials.
Most organizations are bound by the complex obligations, and the governance standards are hesitant in placing data or
workloads in the public cloud due to the fear of outrages, loss or theft.
With time, this fear has receded as logical isolation has proven to be reliable, and the addition of data encryption along with
several identity and access management tools has helped in improving the security of data present within the public cloud.
Use Case of Hybrid Cloud and Business
Intelligence
Reducing Data in the Cloud
Today, many companies are working with big data; there are disparate types of data that might be high in volume and
velocity.
In the public cloud, there can be some examples, including the geospatial data or clickstream data, or even social media
data.
Companies that deal with big data have decided to processes their external sources in the public cloud and then bring the
reduced or analyzed data set-on premises to make it a part of a larger analysis.
This proves to be a good use of the hybrid cloud model and the companies carry out the computing work in the public
cloud when it doesnʼt need the source files for anything else.
Cloud enables scalability and flexibility of operating on these data sets.
What is Cloud Business Intelligence?
Cloud business intelligence (BI) is the process of connecting to cloud data, organizing this data into a data model, and
analyzing this data to extract insights to ideally inform decision making.
The most useful cloud business intelligence tools go a step further, allowing users to not only find insights, but use those
insights to automatically drive actions.
It often requires combining different sources of data, such as customer information, sales data, financial data, operational
data and more, into one organized cloud platform, whether thatʼs a cloud data warehouse or data lakehouse.
Cloud business intelligence tools that are part of the modern data stack use a variety of methods to collect, organize, move,
and transform data.
This data is then processed with a variety of methods, including algorithms and statistical models.
This data is then ready to be analyzed by cloud business intelligence to find insights.
These insights can then be presented in a data visualization, like a bar chart or histogram, shared with other users, and
inform decisions that drive business performance.
Benefits of Cloud Business Intelligence
Cost Efficiency
In the case of cloud, the companies donʼt need a budget for large and an up-front purchase regarding the software
packages. The companies treat BI infrastructure as a service and pay only for the computing resources that are needed,
and costly asset acquisition is avoided, thus, maintaining a reduced entry threshold barrier.

Flexibility and Scalability

The Cloud Business Intelligence solutions have been allowing greater flexibility that can be altered quickly, giving the
technical users to access newer data sources by carrying out experimentation with the analytics model.
Also, the Cloud resources can automatically and rapidly carry out the scaling in and out by supporting a large number of
simultaneous users. Thus, customers can easily increase software usage without any delay in deploying the installation of
extra hardware and software.

Reliability
Reliability can be improved through the usage of multiple redundant sites, providing reliability and secure the data storage
locations. These resources can be spread across several users, making the Cloud Computing an apt option for disaster
recovery and business continuity.

Enhanced Data Sharing

Cloud computing applications tend to allow data access to be shared remotely and enable an easy cross-location sharing
of data capabilities. These are usually deployed by the internet, and it remains outside the companyʼs firewall.

No Expenditure of Capital
A low TCO or total cost of ownership is one of the key benefits of the Cloud model. With the help of the cloud, companies
only pay for a service that is actually used. Under this policy, Cloud Computing allows the companies to have better control
over the CAPEX and the OPEX that is associated with the non-core activities.
Challenges in Hosting BI on Cloud
Data Security and Privacy
Data Integration and Management
Cost Management
Performance and Reliability
Skill Gaps and Training

LinkedInEditors
The Challenges and Opportunities of Business Intelligence in the Cloud
In today's data-driven world, Business Intelligence (BI) has become an essential tool
for organizations looking to gain a competitive edge. With the rise of cloud…
 Functional areas of BI tools

ETL Data Mining OLAP

Reporting and
Data
Querying
Warehouse
Software
End User BI
The business intelligence end-user can be defined as a decision-maker (of any level within the company), who does not
necessarily possess IT skills and who uses business data and information from the BI solution to guide his actions.
The true test of the usability of -a BI solution is with the nontechnical end-user.
Ease of Use: The First Requirement of BI End-user
Adoption
“Being adopted” is not the goal of business intelligence. The goal is to help end-users solve problems, eliminate
inefficiency and achieve the companyʼs strategic goals.
Adoption is merely a condition to this end, albeit a necessary condition. A well-implemented BI solution that is squarely and
intelligently aligned with the companyʼs strategy has indeed the potential to make a tremendous impact–if adopted.
The first condition to adoption is ease of use. New technologies tend to make some new users anxious, especially if they
are perceived as coming with a steep learning curve.
If a newly-implemented BI solution is (or even comes across as) complex to learn and use, you can rest assured that many
end-users will be reluctant to adopt it, and will instead fall back on whatʼs familiar.
Today, there is no reason why a business intelligence product should be hard to use. Especially with Web-based solutions,
user interfaces should mirror the easy and intuitive navigability of the Internet.
Important information and recommended actions should pop out to the end-user without requiring him to sift through
pages of data or reconciling multiple tools. Likewise, analysis should be intuitive, letting the user filter, sort, drill down and
drill through data at the click of a mouse without any technical knowledge required.
Setting up data for BI
Preparing data for Business Intelligence (BI) can be a very tedious and time consuming process. You want the data to turn
into the best reports for analysis.
But, the raw data needs lots of processing and handling before you can even approach the results. In addition, itʼs essential
to make sure data is collected and shared across the whole organization.
So, how can you make this happen? The main challenge is planning and building the combination of several data sources
tables into quality reports that support the business and answer multiple questions for the same topic.
For example, reporting on your online serviceʼs “daily active users” and also answering questions about the region source,
the devices they use, etc. - ensuring that the right data resolution and granularity is available for your multiple reporting
requirements.
Setting up data for BI
To reach our desired results, there are several steps to take to go from raw data to useful analytics:

1. Collect and load data

2. Transform data to be BI ready
3. Test system with manual queries
4. Build the reports
What is data warehousing?
What Is the Role of Data Warehousing in Business
Intelligence?
In business intelligence, data warehouses serve as the backbone of data storage. Business intelligence relies on complex
queries and comparing multiple sets of data to inform everything from everyday decisions to organization-wide shifts in
focus.
To facilitate this, business intelligence is comprised of three overarching activities: data wrangling, data storage, and data
analysis.
Data wrangling is usually facilitated by extract, transform, load (ETL) technologies
The glue holding this process together is data warehouses, which serve as the facilitator of data storage using OLAP. They
integrate, summarize, and transform data, making it easier to analyze.
Even though data warehouses serve as the backbone of data storage, theyʼre not the only technology involved in data
storage.
Many companies go through a data storage hierarchy before reaching the point where they absolutely need a data
warehouse.
How Do Data Warehouses Work?
Storage - you can host your data warehouse on-premises, in the cloud, or use a hybrid approach. On-premises hosting is,
according to some, on its way out. Cloud hosting is much cheaper and more flexible because youʼre renting space on anotherʼs
server. You donʼt need to run maintenance, you can expand and cut back as needed, and there is an ever-expanding set of
features added each year. Bridging the gap between these two approaches is hybrid hosting, which, as we mentioned before,
is the preferred choice for companies migrating from on-premises to cloud hosting.

Software - To get data into your data warehouse, you need to use a type of software commonly called ETL software. Extract,
transform, load (ETL) is a process where the data is extracted, made ready for use, then loaded into the data warehouse.

Nowadays, we see many more companies using an alternative to ETL called extract, load, transform (ELT). Often companies
will extract data from source data, load it into a data lake, then use data warehouses to transform the data. Both ETL and ELT
are facilitated with software like Panoply.io and Stitch.

Labor - Of course, data warehouses donʼt run themselves. Labor is a significant part of keeping a data warehouse running
because itʼs not just a system; itʼs a “full-fledged architecture” that requires experts to set up and manage.

The purpose of all this work is to centralize and organize data, so it can be more easily understood. This is where business
intelligence tools come in. They essentially sit atop the data warehouses as a layer that helps you query, analyze, and visualize
your data.
How Do Business Intelligence Platforms and Data
Warehouses Work Together?
While data warehouses store data business intelligence platforms analyze data When you get these two systems to work
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together seamlessly you ll unlock the full benefits of business intelligence

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Business intelligence tools build on the foundation of the other two steps data wrangling and data storage
: .

First business intelligence tools integrate with many different sources including your data warehouse They then provide an
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easy way to query the data in order to analyze data for trends and insights Then they make it easy to visualize and share data
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using dashboards and reports .

These three steps built on top of a good data warehouse foundation will make it easier to follow through on the core promise
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of business intelligence providing everyone in your organization with the ability to understand and act on data
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How to Connect Your Data Warehouse to Your
Business Intelligence Platform
MicrosoftLearn
Connect to the Data Warehouse with Power BI - Microsoft Intune
You can download a file for use with Microsoft Power BI that allows you to load
interactive, dynamically generated reports for your Microsoft Intune tenant.
OLAP
What is advanced analytics?
Advanced analytics is a data analysis methodology that uses predictive modeling, machine learning algorithms, deep
learning, business process automation and other statistical methods to analyze business information from a variety of data
sources.
Advanced analytics uses data science beyond traditional business intelligence (BI) methods to predict patterns and estimate
the likelihood of future events. This in turn can help an organization be more responsive and significantly increase its accuracy
in decision-making.
Often used by data scientists, advanced analytics tools both combine and extend prescriptive analytics and predictive
analytics while adding various options for enhanced visualization and predictive models.
Four types of business analytics
Descriptive Analytics Diagnostic Analytics
“What happened” “Why things happened”
It is the interpretation of historical data to better Common diagnostic analytic techniques/insights include
understand changes that have occurred in a business. drill-down, data discovery, data mining, and correlations.
This type of analytics can be used to gain an overall Companies use this data to identify patterns of behavior
picture of how a business is performing. and make deep connections within the data they have
Common insights include year-over-year comparisons, collected.
the number of users, and revenue per subscriber. In order to be effective, diagnostic data must be detailed
and accurate.
Four types of business analytics
Predictive Analytics Prescriptive Analytics
“What is likely to happen” “What they should do next”
Existing data, modeling techniques, and statistical This is the most in-demand type of analytics today,
modeling are leveraged to generate predictions about however, it is talent and resource-expensive: Few
performance and future outcomes. companies have the skilled employees and resources to
Predictive models are especially useful for marketing and conduct it.
insurance companies which need to make decisions Big data players like Apple, Netflix, and Facebook are
based on what could be coming up. currently conducting prescriptive analytics successfully.
Common processes in predictive analytics include It requires tremendous data and continuously updated
decision trees, neural networks, and regression models. data to help it learn, refine its decisions, and then
communicate and act on these decisions in a business
setting.
Descriptive Analytics Examples
How much did we sell as a company?
What was our overall productivity?
How many customers churned in the last quarter?

Diagnostic Analytics Examples

Why did our company sales decrease in the previous quarter?
Why are we seeing an increase in customer churn?
Why are a specific basket of products vastly outperforming their prior year sales figures?
Predictive Analytics Examples
Predicting maintenance issues and part breakdown in machines.
Determining credit risk and identifying potential fraud.
Predict and avoid customer churn by identifying signs of customer dissatisfaction.

Prescriptive Analytics Examples

Automatic adjustment of product pricing based on anticipated customer demand and external factors.
Flagging select employees for additional training based on incident reports in the field.
Why is advanced analytics important?
Advanced analytics is a valuable resource to enterprises because it enables an organization to get greater functionality from its
data assets, regardless of where the data is stored or what format it's in. Advanced analytics also can help address some of
the more complex business problems that traditional BI reporting cannot.
For example, to create a contextual marketing engine, a consumer packaged goods manufacturer might need to ask the
following questions:
When is a customer likely to exhaust their supply of an item?
What time of the day or week are they most receptive to marketing advertisements?
What level of profitability is achievable when marketing at that time?
What price point are they most likely to purchase at?
By combining consumption models with historical data and artificial intelligence (AI), advanced analytics can help an
organization determine precise answers to those questions
Benefits of advanced analytics?
Accurate forecasting: Using advanced analytics can confirm or refute prediction and forecast models with a greater level
of accuracy than traditional BI tools that still carry an element of uncertainty.
Faster decision-making: With predictions that feature a high level of accuracy, executives can act more quickly, confident
their business decisions will achieve the desired results and that favorable outcomes can be repeated.
Deeper insight: Advanced analytics offers a deeper level of actionable insight from data, including customer preference,
market trends and key business processes, which empowers stakeholders to make data-driven decisions that can directly
affect their strategy.
Improved risk management: The higher level of accuracy provided by advanced analytics predictions can help businesses
reduce their risk of costly mistakes.
Anticipate problems and opportunities: Advanced analytics uses statistical models to reveal potential problems on the
business' current trajectory, or identify new opportunities, so stakeholders can quickly change course and achieve better
outcomes.
Advanced analytics techniques
Data mining: This process sorts through large data sets to identify patterns and establish relationships to solve problems
through data analysis.

Sentiment analysis: This technique uses natural language processing, text analysis and biometrics to identify the emotional
tone behind a body of text.

Cluster analysis: This process matches pieces of unstructured data based on similarities found between them.

Complex event processing: This technique uses technology to predict high-level events likely to result from specific sets of
low-level factors.

Big data analytics: This is the process of examining large volumes of structured, semi-structured and unstructured data to
uncover information such as hidden patterns, correlations, market trends and customer preferences.

Machine learning: The development of machine learning has dramatically increased the speed at which data can be
processed and analyzed, facilitating disciplines like predictive analytics.

Data visualization: This process of presenting data in graphical format makes data analysis and sharing more accessible
across organizations.
Use Cases
Detect fraud
Unsurprisingly, one of the most important concerns in the world of banking is fraudulent transactions in which an individual or
entity withdraws money from a fund that is not their own. While this problem is as old (if not older) than banks themselves,
today many banks use such advanced analytics techniques as predictive detection and robotic process automation (RPA) to
flag potentially fraudulent transactions when they occur.
Improve marketing strategy
When designing a new campaign, marketers keep a close eye on how much their efforts will cost versus how much they will
earn by attracting new customers. As a result, some marketers today employ an advanced analytics technique known as
marketing-mix modeling (MMM), which can model the interactions between marketing investments, sales drivers, and other
external variables like seasonality to help marketers design both short and long-term strategies.
Identify growth opportunities
One of the most common concerns for a successful business is how to grow and where to invest resources. To help spot new
growth opportunities, advanced analytics can be used to identify patterns using big data.
Advanced analytics tools
There are a number of advanced analytics platforms available. Each offers different advantages, depending on the use case.
These tools can be broken down into two categories: open source and proprietary.
Open source tools
Open source tools have become a go-to option for many data scientists doing machine learning and prescriptive analytics.
They include programming languages, as well as computing environments, including Hadoop and Spark.
Users typically say they like open source advanced analytics tools because they are generally inexpensive to operate, offer
strong functionality and are backed by a user community that continually innovates the tools.
Proprietary tools
On the proprietary side, vendors including Microsoft, IBM and SAS Institute all offer advanced analytics tools. Most have
required a deep technical background and understanding of mathematical techniques.
In recent years, however, a crop of self-service analytics tools has matured to make functionality more accessible to
business users. Tableau, in particular, has become a common tool. While its functionality is more limited than deeper
technical tools, it does enable users to conduct cluster analyses and other advanced analyses.