EVOLUTION OF DATA ANALYTICS

The evolution of data analytics brought forth advanced

techniques that enabled organizations to go beyond descriptive
analytics and delve into predictive and prescriptive analytics.
Predictive analytics leveraged historical data and statistical models to
forecast future outcomes, enabling proactive decision-making.
What is data analysis overview?
Data Analysis is the process of systematically applying statistical and/or logical
techniques to describe and illustrate, condense and recap, and evaluate data.

TYPES OF DATA ANALYTICS

1. Descriptive Analytics

Descriptive analytics is the simplest type of analytics and the foundation the other
types are built on. It allows you to pull trends from raw data and succinctly
describe what happened or is currently happening.

Descriptive analytics answers the question, “What happened?”

For example, imagine you’re analyzing your company’s data and find there’s a
seasonal surge in sales for one of your products: a video game console. Here,
descriptive analytics can tell you, “This video game console experiences an
increase in sales in October, November, and early December each year.”

Data visualization is a natural fit for communicating descriptive analysis because

charts, graphs, and maps can show trends in data—as well as dips and spikes—
in a clear, easily understandable way.

2. Diagnostic Analytics

Diagnostic analytics addresses the next logical question, “Why did this happen?”

Taking the analysis a step further, this type includes comparing coexisting trends
or movement, uncovering correlations between variables, and determining causal
relationships where possible.
Continuing the aforementioned example, you may dig into video game console
users’ demographic data and find that they’re between the ages of eight and 18.
The customers, however, tend to be between the ages of 35 and 55. Analysis of
customer survey data reveals that one primary motivator for customers to
purchase the video game console is to gift it to their children. The spike in sales
in the fall and early winter months may be due to the holidays that include gift-
giving.

Diagnostic analytics is useful for getting at the root of an organizational issue.

3. Predictive Analytics

Predictive analytics is used to make predictions about future trends or events and
answers the question, “What might happen in the future?”

By analyzing historical data in tandem with industry trends, you can make
informed predictions about what the future could hold for your company.

For instance, knowing that video game console sales have spiked in October,
November, and early December every year for the past decade provides you with
ample data to predict that the same trend will occur next year. Backed by upward
trends in the video game industry as a whole, this is a reasonable prediction to
make.

Making predictions for the future can help your organization formulate strategies
based on likely scenarios.

4. Prescriptive Analytics

Finally, prescriptive analytics answers the question, “What should we do next?”

Prescriptive analytics takes into account all possible factors in a scenario and
suggests actionable takeaways. This type of analytics can be especially useful
when making data-driven decisions.

Rounding out the video game example: What should your team decide to do
given the predicted trend in seasonality due to winter gift-giving? Perhaps you
decide to run an A/B test with two ads: one that caters to product end-users
(children) and one targeted to customers (their parents). The data from that test
can inform how to capitalize on the seasonal spike and its supposed cause even
further. Or, maybe you decide to increase marketing efforts in September with
holiday-themed messaging to try to extend the spike into another month.

While manual prescriptive analysis is doable and accessible, machine-learning

algorithms are often employed to help parse through large volumes of data to
recommend the optimal next step. Algorithms use “if” and “else” statements,
which work as rules for parsing data. If a specific combination of requirements is
met, an algorithm recommends a specific course of action. While there’s far more
to machine-learning algorithms than just those statements, they—along with
mathematical equations—serve as a core component in algorithm training.

Importance of Data Analytics:

Data analytics gives a company a cost-effective solution. Even it will
help them to improvise the decisions making process. The sectors like
manufacturing, media, healthcare, real estate, and others require data
analytics techniques and tools. If you have that related skills, these
industries are waiting for you.

5 benefits of data analytics for your

business
The rich variety of data that enterprises generate contains valuable insights, and data analytics is
the way to unlock them. Data analytics can help an organization with everything from
personalizing a marketing pitch for an individual customer to identifying and mitigating risks to
its business. Let's take a look at five of the benefits of using data analytics.

1. Personalize the customer experience

Businesses collect customer data from many different channels, including physical
retail, e-commerce, and social media. By using data analytics to create comprehensive
customer profiles from this data, businesses can gain insights into customer behavior to
provide a more personalized experience.

Take a retail clothing business that has an online and physical presence. The company
could analyze its sales data together with data from its social media pages and then
create targeted social media campaigns to promote their e-commerce sales for product
categories that the customers are already interested in.
Organizations can run behavioral analytics models on customer data to optimize the customer
experience further. For example, a business could run a predictive model on e-commerce
transaction data to determine products to recommend at checkout to increase sales

2. Inform business decision-making

Enterprises can use data analytics to guide business decisions and minimize financial
losses. Predictive analytics can suggest what could happen in response to changes to
the business, and prescriptive analytics can indicate how the business should react to
these changes.

For instance, a business can model changes to pricing or product offerings to determine
how those changes would affect customer demand. Changes to product offerings can
be A/B tested to validate the hypotheses produced by such models. After collecting
sales data on the changed products, enterprises can use data analytics tools to
determine the success of the changes and visualize the results to help decision-
makers choose whether to roll the changes out across the business.

3. Streamline operations
Organizations can improve operational efficiency through data analytics. Gathering and
analyzing data about the supply chain can show where production delays or bottlenecks
originate and help predict where future problems may arise. If a demand forecast shows
that a specific vendor won't be able to handle the volume required for the holiday
season, an enterprise could supplement or replace this vendor to avoid production
delays.

In addition, many businesses — particularly in retail — struggle to optimize their

inventory levels. Data analytics can help determine optimal supply for all of an
enterprise's products based on factors such as seasonality, holidays, and secular
trends.

4. Mitigate risk and handle setbacks

Risks are everywhere in business. They include customer or employee theft,
uncollected receivables, employee safety, and legal liability. Data analytics can help an
organization understand risks and take preventive measures. For instance, a retail
chain could run a propensity model — a statistical model that can predict future actions
or events — to determine which stores are at the highest risk for theft. The business
could then use this data to determine the amount of security necessary at the stores, or
even whether it should divest from any locations.
Businesses can also use data analytics to limit losses after a setback occurs. If a
business overestimates demand for a product, it can use data analytics to determine the
optimal price for a clearance sale to reduce inventory. An enterprise can even create
statistical models to automatically make recommendations on how to resolve
recurrent problems.

5. Enhance security
All businesses face data security threats. Organizations can use data analytics to
diagnose the causes of past data breaches by processing and visualizing relevant data.
For instance, the IT department can use data analytics applications to parse, process,
and visualize their audit logs to determine the course and origins of an attack. This
information can help IT locate vulnerabilities and patch them.

IT departments can also use statistical models to prevent future attacks. Attacks often
involve abnormal access behavior, particularly for load-based assaults such as a
distributed denial-of-service (DDoS) attack. Organizations can set up these models to
run continuously, with monitoring and alerting systems layered on top to detect and flag
anomalies so that security pros can take action immediately.

Business Analytics Applications

1. Customer Segmentation

Customer segmentation is a vital business analytics application that helps companies

group their customers based on shared characteristics such as demographics, buying
behavior, and preferences. By analyzing customer data, businesses can tailor their
marketing strategies, product offerings, and customer service to target specific
segments effectively, increasing customer satisfaction and overall profitability.

2. Predictive Analytics

Predictive analytics leverages historical and real-time data to forecast future trends and
events. This application is used extensively in industries like finance, healthcare, and e-
commerce for tasks such as predicting stock prices, patient outcomes, and product
demand. It enables proactive decision-making, risk mitigation, and optimization of
business operations.
3. Supply Chain Optimization

Businesses utilize analytics to optimize their supply chains by analyzing data related to
inventory levels, supplier performance, transportation logistics, and demand forecasting.
By identifying inefficiencies and bottlenecks in the supply chain, companies can reduce
costs, improve product availability, and enhance overall operational efficiency.

4. Fraud Detection

Fraud detection analytics employs advanced algorithms and machine learning models
to identify and prevent fraudulent activities, such as credit card fraud, insurance fraud,
and cyberattacks. By analyzing transactional data patterns and anomalies,
organizations can minimize financial losses and maintain the trust of their customers.

5. Market Basket Analysis

Market basket analysis involves examining customer purchase history to discover

patterns in product co-purchases. Retailers use this application to optimize product
placement, cross-selling, and promotional strategies. By understanding which products
are frequently bought together, businesses can increase sales and enhance the
customer shopping experience.

6. Churn Analysis

Churn analysis focuses on identifying and reducing customer churn, which is the rate at
which customers stop using a company's products or services. By analyzing customer
behavior and feedback, businesses can implement retention strategies to retain
valuable customers and reduce revenue loss.

7. A/B Testing

A/B testing is a fundamental analytics application for optimizing digital marketing

campaigns and website performance. It involves conducting controlled experiments by
randomly assigning users to different versions of a webpage or marketing content. By
comparing the performance of these versions, companies can make data-driven
decisions to improve conversion rates and user engagement.

8. Employee Performance Analytics

Employee performance analytics helps organizations evaluate the productivity and
engagement of their workforce. By analyzing data on key performance indicators (KPIs),
attendance, and employee feedback, companies can make informed decisions about
talent management, training, and workforce optimization.

9. Quality Control and Process Improvement

In manufacturing and production industries, analytics is employed to monitor product

quality, detect defects, and optimize production processes. By analyzing data from
sensors and production lines, businesses can reduce defects, improve efficiency, and
minimize waste.

10. Sentiment Analysis

Sentiment analysis, also known as opinion mining, uses natural language processing
and machine learning techniques to assess public sentiment and opinions from sources
like social media, customer reviews, and surveys. Companies can gain insights into how
their brand is perceived and use this information to shape marketing strategies and
product development.

What is web analytics?

Web analytics is the process of analyzing the behavior of visitors to a website.
This involves tracking, reviewing and reporting data to measure web activity,
including the use of a website and its components, such as webpages,
images and videos.

Data collected through web analytics may include traffic sources, referring
sites, page views, paths taken and conversion rates. The compiled data often
forms a part of customer relationship management analytics (CRM analytics)
to facilitate and streamline better business decisions.

Web analytics enables a business to retain customers, attract more visitors

and increase the dollar volume each customer spends.

Analytics can help in the following ways:

 Determine the likelihood that a given customer will repurchase a product
after purchasing it in the past.

 Personalize the site to customers who visit it repeatedly.

 Monitor the amount of money individual customers or specific groups of

customers spend.

 Observe the geographic regions from which the most and the least
customers visit the site and purchase specific products.

 Predict which products customers are most and least likely to buy in the
future.
Web analytics process
The web analytics process involves the following steps:

1. Setting goals. The first step in the web analytics process is for businesses
to determine goals and the end results they are trying to achieve. These
goals can include increased sales, customer satisfaction and brand
awareness. Business goals can be both quantitative and qualitative.

2. Collecting data. The second step in web analytics is the collection and
storage of data. Businesses can collect data directly from a website or web
analytics tool, such as Google Analytics. The data mainly comes
from Hypertext Transfer Protocol requests -- including data at the network
and application levels -- and can be combined with external data to
interpret web usage. For example, a user's Internet Protocol address is
typically associated with many factors, including geographic location and
clickthrough rates.

3. Processing data. The next stage of the web analytics funnel involves
businesses processing the collected data into actionable information.

4. Identifying key performance indicators (KPIs). In web analytics, a KPI is

a quantifiable measure to monitor and analyze user behavior on a website.
 Examples include bounce rates, unique users, user sessions and on-site
search queries.

5. Developing a strategy. This stage involves implementing insights to

formulate strategies that align with an organization's goals. For example,
search queries conducted on-site can help an organization develop a
content strategy based on what users are searching for on its website.

6. Experimenting and testing. Businesses need to experiment with different

strategies in order to find the one that yields the best results. For
example, A/B testing is a simple strategy to help learn how an audience
responds to different content. The process involves creating two or more
versions of content and then displaying it to different audience segments to
reveal which version of the content performs better.
What are the two main categories of web analytics?
The two main categories of web analytics are off-site web analytics and
on-site web analytics.

Off-site web analytics

The term off-site web analytics refers to the practice of monitoring visitor
activity outside of an organization's website to measure potential
audience. Off-site web analytics provides an industrywide analysis that
gives insight into how a business is performing in comparison to
competitors. It refers to the type of analytics that focuses on data
collected from across the web, such as social media, search
engines and forums.

On-site web analytics

On-site web analytics refers to a narrower focus that uses analytics to

track the activity of visitors to a specific site to see how the site is
performing. The data gathered is usually more relevant to a site's owner
 and can include details on site engagement, such as what content is
most popular. Two technological approaches to on-site web analytics
include log file analysis and page tagging.

What is Text Analytics?

Text analytics is the automated process of translating large volumes of unstructured
text into quantitative data to uncover insights, trends, and patterns. Combined with data
visualization tools, this technique enables companies to understand the story behind the
numbers and make better decisions.

When searching for a definition of text analytics, you may have come across related
concepts, like text mining and text analysis. So, before going into the details, we’ll
outline the main differences between these terms.

Text mining, text analysis, and text analytics are often used interchangeably, with the
end goal of analyzing unstructured text to obtain insights. However, while text mining (or
text analysis) provides insights of a qualitative nature, text analytics aggregates these
results and turns them into something that can be quantified and visualized through
charts and reports.

Text analysis and text analytics often work together to provide a complete
understanding of all kinds of text, like emails, social media posts, surveys, customer
support tickets, and more. For example, you can use text analysis tools to find out how
people feel toward a brand on social media (sentiment analysis), or understand the
main topics in product reviews (topic detection). Text analytics, on the other hand,
leverages the results of text analysis to identify patterns, such as a spike in negative
feedback, and provides you with actionable insights you can use to make
improvements, like fixing a bug that’s frustrating your users.

Business Analytics Skills

The big data landscape has changed drastically, making it tough for professionals to
know where to focus their growth. However, despite this changing field, there are a
number of core business analytics skills that form the foundation of any solid business
analytics career.

A great business analytics professional could be described as:

A good communicator

Being able to present findings in a clear and concise manner is fundamental to making
sure that all players understand insights and can put recommendations into practice.
People working in analysis must be able to tell a story with data through strong writing
and presentation skills.

Inquisitive

People in this field should have natural curiosity and drive to continue learning and
figuring out how things fit together. Even as analysts become managers, it’s important
to stay in touch with the industry and its changes.

A problem solver

Professionals in analytics use a combination of logical thinking, predictive analytics and

statistics to make recommendations that will solve problems and propel a business
forward. In a profession that seeks to turn data into solutions, being a natural problem
solver helps connect the dots.

A critical thinker

Business analytics professionals need to think critically about not only the implications
of the data they collect, but about what data they should be collecting in the first place.
They are expected to analyze and highlight only the data that can be helpful in making
decisions.

A visualizer

Disorganized data doesn’t help anyone. To create worth from data, analytics
professionals need to be able to translate and visualize data in a concise and accurate
way that’s easy to digest.

Both detail-oriented and a big picture thinker

While business analytics professionals have to be able to handle complex data, they
also need to understand how their recommendations will affect the bottom line of a
business. There’s no point in having access to large quantities of information without
knowing how it can be harnessed to analyze and improve tactics, processes and
strategies.

Technical Skills for Business Analytics

In a business landscape quickly becoming governed by big data, great analytics
professionals are fulfilling the demand for technical expertise by wearing the hats of
both developer and analyst.

Having both a conceptual and working understanding of tools and programming

languages is important to translate data sources into tangible solutions.

Below are some of the top tools for business analytics professionals:
SQL

SQL is the coding language of databases and one of the most important tools in an
analytics professional’s toolkit. Professionals write SQL queries to extract and analyze
data from the transactions database and develop visualizations to present to
stakeholders.

Statistical languages

The two most common programming languages in analytics are R, for statistical
analysis, and Python, for general programming. Knowledge in either of these languages
can be beneficial when analyzing big data sets, but is not vital.

Statistical software

While the ability to program is helpful for a career in analytics, being able to write code
isn’t necessarily required to work as an analytics professional. Apart from the above
languages, statistical software such as SPSS, SAS, Sage, Mathematica, and even
Excel can be used when managing and analyzing data.