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Analytics
Data Analytics is the discovery, interpretation, and communication of meaningful patterns in data. Especially valuable
in areas rich with recorded information, analytics relies on the simultaneous application of statistics, computer
programming and operations research to quantify performance.

Organizations may apply analytics to business data to describe, predict, and improve business performance. Specifically,
areas within analytics include predictive analytics, prescriptive analytics, enterprise decision management, descriptive
analytics, cognitive analytics, Big Data Analytics, retail analytics, store assortment and stock-keeping unit optimization,
marketing optimization and marketing mix modeling, web analytics, call analytics, speech analytics, sales force sizing and
optimization, price and promotion modeling, predictive science, credit risk analysis, and fraud analytics. Since analytics
can require extensive computation (see big data), the algorithms and software used for analytics harness the most current
methods in computer science, statistics, and mathematics.[1]

Contents
Analytics vs. analysis
Application of analytics
Marketing optimization
People analytics
Portfolio analytics
Risk analytics
Digital analytics
Security analytics
Software analytics
Challenges
Risks
See also
References
External links

Analytics vs. analysis


Data Analytics is multidisciplinary. There is extensive use of Computer Skills, mathematics and statistics, the use of
descriptive techniques and predictive models to gain valuable knowledge from data analysis. The insights from data are
used to recommend action or to guide decision making rooted in business context. Thus, analytics is not so much
concerned with individual analyses or analysis steps, but with the entire methodology. There is a pronounced tendency to
use the term analytics in business settings e.g. text analytics vs. the more generic text mining to emphasize this broader
perspective. There is an increasing use of the term advanced analytics, typically used to describe the technical aspects of
analytics, especially in the emerging fields such as the use of machine learning techniques like neural networks, Decision

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Tree, Logistic Regression, linear to multiple regression analysis, Classification to do predictive modeling. It also includes
Unsupervised Machine learning techniques like cluster analysis, Principal Component Analysis, segmentation profile
analysis and association analysis.

Application of analytics

Marketing optimization
Marketing has evolved from a creative process into a highly data-driven process. Marketing organizations use analytics to
determine the outcomes of campaigns or efforts and to guide decisions for investment and consumer targeting.
Demographic studies, customer segmentation, conjoint analysis and other techniques allow marketers to use large
amounts of consumer purchase, survey and panel data to understand and communicate marketing strategy.

Web analytics allows marketers to collect session-level information about interactions on a website using an operation
called sessionization. Google Analytics is an example of a popular free analytics tool that marketers use for this purpose.
Those interactions provide web analytics information systems with the information necessary to track the referrer, search
keywords, identify IP address, and track activities of the visitor. With this information, a marketer can improve marketing
campaigns, website creative content, and information architecture.

Analysis techniques frequently used in marketing include marketing mix modeling, pricing and promotion analyses, sales
force optimization and customer analytics e.g.: segmentation. Web analytics and optimization of web sites and online
campaigns now frequently work hand in hand with the more traditional marketing analysis techniques. A focus on digital
media has slightly changed the vocabulary so that marketing mix modeling is commonly referred to as attribution
modeling in the digital or marketing mix modeling context.

These tools and techniques support both strategic marketing decisions (such as how much overall to spend on marketing,
how to allocate budgets across a portfolio of brands and the marketing mix) and more tactical campaign support, in terms
of targeting the best potential customer with the optimal message in the most cost effective medium at the ideal time.

People analytics
People Analytics is using behavioral data to understand how people work and change how companies are managed.[2]

People analytics is also known as workforce analytics, HR analytics, talent analytics, people insights, talent insights,
colleague insights, human capital analytics, and HRIS analytics.[3] HR analytics is the application of analytics to help
companies manage human resources. The aim is to discern which employees to hire, which to reward or promote, what
responsibilities to assign, and similar human resource problems.[4] HR analytics is becoming increasingly important to
understand what kind of behavioral profiles would succeed and fail. For example, an analysis may find that individuals
that fit a certain type of profile are those most likely to succeed at a particular role, making them the best employees to
hire.

However, there are key differences between people analytics and HR analytics. “People Analytics solves business
problems. HR Analytics solves HR problems. People Analytics looks at the work and its social organization. HR Analytics
measures and integrates data about HR administrative processes,” says Ben Waber, MIT Media Lab Ph.D. and CEO of
Humanyze.[5] Josh Bersin, founder and principal at Bersin by Deloitte agrees that people analytics is a larger industry than
HR Analytics, explaining, “… over time, I believe it doesn't even belong within HR. While it may reside in HR to begin

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with, over time this team takes responsible for analysis of sales productivity, turnover, retention, accidents, fraud, and
even the people-issues that drive customer retention and customer satisfaction… These are all real-world business
problems, not HR problems.”[6]

Portfolio analytics
A common application of business analytics is portfolio analysis. In this, a bank or lending agency has a collection of
accounts of varying value and risk. The accounts may differ by the social status (wealthy, middle-class, poor, etc.) of the
holder, the geographical location, its net value, and many other factors. The lender must balance the return on the loan
with the risk of default for each loan. The question is then how to evaluate the portfolio as a whole.

The least risk loan may be to the very wealthy, but there are a very limited number of wealthy people. On the other hand,
there are many poor that can be lent to, but at greater risk. Some balance must be struck that maximizes return and
minimizes risk. The analytics solution may combine time series analysis with many other issues in order to make decisions
on when to lend money to these different borrower segments, or decisions on the interest rate charged to members of a
portfolio segment to cover any losses among members in that segment.

Risk analytics
Predictive models in the banking industry are developed to bring certainty across the risk scores for individual customers.
Credit scores are built to predict individual’s delinquency behavior and widely used to evaluate the credit worthiness of
each applicant. Furthermore, risk analyses are carried out in the scientific world and the insurance industry. It is also
extensively used in financial institutions like Online Payment Gateway companies to analyse if a transaction was genuine
or fraud. For this purpose they use the transaction history of the customer. This is more commonly used in Credit Card
purchase, when there is a sudden spike in the customer transaction volume the customer gets a call of confirmation if the
transaction was initiated by him/her. This helps in reducing loss due to such circumstances.

Digital analytics
Digital analytics is a set of business and technical activities that define, create, collect, verify or transform digital data into
reporting, research, analyses, recommendations, optimizations, predictions, and automations.[7] This also includes the
SEO (Search Engine Optimization) where the keyword search is tracked and that data is used for marketing purposes.
Even banner ads and clicks come under digital analytics. A growing number of brands and marketing firms rely on digital
analytics for their digital marketing assignments, where MROI (Marketing Return on Investment) is an important key
performance indicator (KPI).

Security analytics
Security analytics refers to information technology (IT) to gather and analyze security events to understand and analyze
events that pose the greatest risk.[8] Products in this area include security information and event management and user
behavior analytics.

Software analytics
Software analytics is the process of collecting information about the way a piece of software is used and produced.

Challenges
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In the industry of commercial analytics software, an emphasis has emerged on solving the challenges of analyzing massive,
complex data sets, often when such data is in a constant state of change. Such data sets are commonly referred to as big
data. Whereas once the problems posed by big data were only found in the scientific community, today big data is a
problem for many businesses that operate transactional systems online and, as a result, amass large volumes of data
quickly.[9]

The analysis of unstructured data types is another challenge getting attention in the industry. Unstructured data differs
from structured data in that its format varies widely and cannot be stored in traditional relational databases without
significant effort at data transformation.[10] Sources of unstructured data, such as email, the contents of word processor
documents, PDFs, geospatial data, etc., are rapidly becoming a relevant source of business intelligence for businesses,
governments and universities.[11] For example, in Britain the discovery that one company was illegally selling fraudulent
doctor's notes in order to assist people in defrauding employers and insurance companies,[12] is an opportunity for
insurance firms to increase the vigilance of their unstructured data analysis. The McKinsey Global Institute estimates that
big data analysis could save the American health care system $300 billion per year and the European public sector €250
billion.[13]

These challenges are the current inspiration for much of the innovation in modern analytics information systems, giving
birth to relatively new machine analysis concepts such as complex event processing, full text search and analysis, and even
new ideas in presentation.[14] One such innovation is the introduction of grid-like architecture in machine analysis,
allowing increases in the speed of massively parallel processing by distributing the workload to many computers all with
equal access to the complete data set.[15]

Analytics is increasingly used in education, particularly at the district and government office levels. However, the
complexity of student performance measures presents challenges when educators try to understand and use analytics to
discern patterns in student performance, predict graduation likelihood, improve chances of student success, etc. For
example, in a study involving districts known for strong data use, 48% of teachers had difficulty posing questions
prompted by data, 36% did not comprehend given data, and 52% incorrectly interpreted data.[16] To combat this, some
analytics tools for educators adhere to an over-the-counter data format (embedding labels, supplemental documentation,
and a help system, and making key package/display and content decisions) to improve educators’ understanding and use
of the analytics being displayed.[17]

One more emerging challenge is dynamic regulatory needs. For example, in the banking industry, Basel III and future
capital adequacy needs are likely to make even smaller banks adopt internal risk models. In such cases, cloud computing
and open source programming language R can help smaller banks to adopt risk analytics and support branch level
monitoring by applying predictive analytics.

Risks
The main risk for the people is discrimination like price discrimination or statistical discrimination. See Scientific
American book review of "Weapons of math destruction" (https://blogs.scientificamerican.com/roots-of-unity/review-we
apons-of-math-destruction/)

There is also the risk that a developer could profit from the ideas or work done by users, like this example: Users could
write new ideas in a note taking app, which could then be sent as a custom event, and the developers could profit from
those ideas. This can happen because the ownership of content is usually unclear in the law.[18]

If a user's identity is not protected, there are more risks; for example, the risk that private information about users is made
public on the internet.

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In the extreme, there is the risk that governments could gather too much private information, now that the governments
are giving themselves more powers to access citizens' information.

See also
Analysis News analytics
Analytic applications Online analytical processing
Architectural analytics Online video analytics
Behavioral analytics Operational reporting
Business analytics Operations research
Business intelligence Predictive analytics
Cloud analytics Predictive engineering analytics
Complex event processing Prescriptive analytics
Continuous analytics Semantic analytics
Cultural analytics Smart grid
Customer analytics Social analytics
Dashboard Software analytics
Data mining Speech analytics
Data presentation architecture Statistics
Embedded analytics User behavior analytics
Learning analytics Visual analytics
List of software engineering topics Web analytics
Mobile Location Analytics Win–loss analytics

References
1. Kohavi, Rothleder and Simoudis (2002). "Emerging Trends in Business Analytics". Communications of the ACM. 45
(8): 45–48. doi:10.1145/545151.545177 (https://doi.org/10.1145%2F545151.545177).
2. lukem (2016-11-04). "People Analytics: Transforming Management with Behavioral Data" (http://professional.mit.edu/
programs/short-programs/people-analytics). Programs for Professionals | MIT Professional Education. Retrieved
2018-04-03.
3. "[VIDEO] The Difference Between People Analytics and HR Analytics" (https://www.analyticsinhr.com/blog/difference-
between-people-analytics-and-hr-analytics/). Analytics in HR. 2018-03-08. Retrieved 2018-04-03.
4. "People analytics - University of Pennsylvania" (https://www.coursera.org/learn/wharton-people-analytics). Coursera.
5. "People Analytics: MIT July 24, 2017" (https://www.hrexaminer.com/people-analytics-mit-july-24-2017/). HR
Examiner. 2017-08-02. Retrieved 2018-04-03.
6. Bersin, Josh. "The Geeks Arrive In HR: People Analytics Is Here" (https://www.forbes.com/sites/joshbersin/2015/02/0
1/geeks-arrive-in-hr-people-analytics-is-here/#339ceb1673b4). Forbes. Retrieved 2018-04-03.
7. Phillips, Judah "Building a Digital Analytics Organization" Financial Times Press, 2013, pp 7–8.
8. "Security analytics shores up hope for breach detection" (http://enterpriseinnovation.net/article/security-analytics-shor
es-hope-breach-detection-192448485). Enterprise Innovation. Retrieved April 27, 2015.
9. Naone, Erica. "The New Big Data" (http://www.technologyreview.com/computing/38397/). Technology Review, MIT.
Retrieved August 22, 2011.
10. Inmon, Bill; Nesavich, Anthony (2007). Tapping Into Unstructured Data. Prentice-Hall. ISBN 978-0-13-236029-6.
11. Wise, Lyndsay. "Data Analysis and Unstructured Data" (http://www.dashboardinsight.com/articles/business-performan
ce-management/data-analysis-and-unstructured-data.aspx). Dashboard Insight. Retrieved February 14, 2011.
12. "Fake doctors' sick notes for Sale for £25, NHS fraud squad warns" (https://www.telegraph.co.uk/news/uknews/26261
20/Fake-doctors-sick-notes-for-sale-on-web-for-25-NHS-fraud-squad-warns.html). London: The Telegraph. 26 August
2008. Retrieved 16 September 2011.
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13. "Big Data: The next frontier for innovation, competition and productivity as reported in Building with Big Data" (http://w
ww.economist.com/node/18741392). The Economist. May 26, 2011. Archived (https://web.archive.org/web/20110603
031738/http://www.economist.com/node/18741392) from the original on 3 June 2011. Retrieved May 26, 2011.
14. Ortega, Dan. "Mobililty: Fueling a Brainier Business Intelligence" (https://web.archive.org/web/20110705061921/http://
www.itbusinessedge.com/cm/community/features/guestopinions/blog/mobility-fueling-a-brainier-business-intelligenc
e/?cs=47491). IT Business Edge. Archived from the original (http://www.itbusinessedge.com/cm/community/features/
guestopinions/blog/mobility-fueling-a-brainier-business-intelligence/?cs=47491) on July 5, 2011. Retrieved June 21,
2011.
15. Khambadkone, Krish. "Are You Ready for Big Data?" (https://web.archive.org/web/20110314031712/http://www.infoga
in.com/company/perspective-big-data.jsp). InfoGain. Archived from the original (http://www.infogain.com/company/per
spective-big-data.jsp) on March 14, 2011. Retrieved February 10, 2011.
16. U.S. Department of Education Office of Planning, Evaluation and Policy Development (2009). Implementing data-
informed decision making in schools: Teacher access, supports and use. United States Department of Education
(ERIC Document Reproduction Service No. ED504191)
17. Rankin, J. (2013, March 28). How data Systems & reports can either fight or propagate the data analysis error
epidemic, and how educator leaders can help. (https://sas.elluminate.com/site/external/recording/playback/link/table/d
ropin?sid=2008350&suid=D.4DF60C7117D5A77FE3AED546909ED2) Presentation conducted from Technology
Information Center for Administrative Leadership (TICAL) School Leadership Summit.
18. Alan Norton (9 July 2012). "10 reasons why I avoid social networking services" (http://www.techrepublic.com/blog/10-t
hings/10-reasons-why-i-avoid-social-networking-services/). TechRepublic. Retrieved 4 January 2016.

External links
INFORMS' bi-monthly, digital magazine on the analytics profession (http://analyticsmagazine.com/)

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