Topic 10- Chapter 12- Business Analytics

• Business analytics (BA)


  The practice of iterative, methodical exploration of an organization's data to obtain insights that inform business decision making
• Business intelligence (BI)


  The technologies, applications, and practices for the collection, integration, analysis, and presentation of business information
• Manager's job and decision making

  • Interpersonal role
  • Informational role
  • Decisional role
• Decision making process


  1. Identify the problem

  2. Gather information

  3. Develop alternatives

  4. Evaluate alternatives

  5. Choose an alternative

  6. Implement the decision

  7. Monitor the results
• Why managers need IT support for decision making

  • Number of alternatives is constantly increasing
  • Most decisions must be made under time pressure
  • Increased uncertainty in the decision environment
  • Often necessary to rapidly access remote information, consult with experts, or conduct a group decision-making session
• Problem structure


  • Structured
  • Semi-structured
  • Unstructured decisions
• Nature of decisions


  • Operational control
  • Management control
  • Strategic planning
• Computerized decision analysis framework

  1. Identify the problem

  2. Gather information

  3. Develop alternatives

  4. Evaluate alternatives

  5. Choose an alternative

  6. Implement the decision

  7. Monitor the results
• Business analytics process


  • Development of one or a few related analytics applications
  • Development of infrastructure to support enterprise-wide analytics
  • Support for organizational transformation
• Descriptive analytics


  Focuses on understanding what has happened in the past
• Predictive analytics


  Focuses on using data to forecast what might happen in the future
• Prescriptive analytics


  Focuses on determining the best course of action to take in a given situation
• Descriptive analytics tools


  • Online Analytical Processing (OLAP)
  • Data Mining
  • Decision Support Systems
• Decision support systems (DSS)

  • Sensitivity analysis
  • What-if analysis
  • Goal-seeking analysis
• Predictive data mining applications

  • Marketing
  • Production and operations management
  • Human resource management
  • Insurance
  • Government
  • Health care
  • Sentiment analysis
• Prescriptive analytics tools


  • Optimization
  • Simulation
  • Decision trees
• DIADs were a descriptive analytics solution for UPS
• The Package Flow Technologies system was a predictive analytics solution for UPS
• The ORION system was a prescriptive analytics solution for UPS
• UPS's Network Planning Tool is a combination of descriptive, predictive, and prescriptive analytics
• Augmented analytics integrates artificial intelligence and machine learning into traditional analytics packages
• Capabilities of dashboards


  • Drill down
  • Critical success factors (CSFs)
  • Key performance indicators (KPIs)
  • Status access
  • Trend analysis
  • Exception reporting
• Presentation tools


  • Dashboards
  • Geographic information systems
• Google Earth Engine uses various types of data including satellite imagery, climate data, and demographic data
• Google Earth Engine employs descriptive analytics to visualize and analyze past trends in environmental data
• Google Earth Engine employs predictive analytics to forecast future environmental conditions and trends