Week 1 : Introduction to Analytics

Need for Analytics

- Discover reason behind success and failures of schemes and projects
- Understand customers and products better
- Plan for future actions
- Experiment meaningfully
- Improve performance
What is Analytics/Data Science
Data wrangling
(munging), retrieval
and storage

Statistics

Big data

Data mining and

machine learning

- The application of scientific methods of reasoning to data driven decision

making
- Includes hypotheses, experiments, facts, logical reasoning as well as data
engineering
-Focus: Machine Learning/Data Mining (Exploration of data, pattern finding
and prediction/scoring)
- Fancy definition The extensive use of data, statistical and quantitative
analysis, exploratory, predictive models, and fact based decisions to drive
decisions and actions

Why the need for advanced computational methods

- Small data can be easily analysed in MS Excel however once data grows beyond a certain size it cannot be analysed
efficiently by Excel
- Excel does not have a ready built function for clustering based on similar factors as well as factor finding.
Reasons behind the rising popularity of analytics
- Greater amounts of data available about consumers due to more data collecting technologies (wearables)
- Greater capacity for data warehousing - Reduction in computing costs
- Greater emphasis on customer relationship management with the advent of globalisation and increased
competitiveness
- More readily available commercial data analytics softwares
- Change in organisational culture: product based to consumer based
- Commercialisation of information and increased numbers of knowledge brokers
Ways to Classify Analytics
1. Based on Method and Purpose
a. Descriptive: Includes gathering, organising, tabulating and depicting the characteristics of what is being studied.
Historically this kind of analytics was called reporting; describes but does not provide explanations or propose
potential actions. E.g. Dashboards
b. Predictive: Uses historical data to predict trends and identify phenomena and thus likely future outcomes
c. Prescriptive: Analysing multiple options and stratgies (e.g. ideal product features using a cost-satisfaction matrix);
includes methods such as experimental design, optimization, simulation and recommends a course of action
2. Based on Field of Application
Marketing, Operational, Accounting, Customer, Social, Mobile, Fraud, etc
Main Classes of algorithms in analytics
Clustering: Discover natural groupings
Classifiers: Prediction of which class a case belongs to
Regression: Predict numerical outcomes
Similarities/Recommenders: Explore associations and cooccurences
Ensembles: Mixture of the above.