Learning Objectives

• ✅ Define Business Analytics (BA) and explain its importance in the modern world.
• ✅ Differentiate between the three main types of analytics: descriptive, predictive, and prescriptive.
• ✅ Outline the key steps of the business analytics process.
• ✅ Recognize how analytics supports and enhances managerial decision-making.

The Data-Driven World

Why is everyone talking about data? Because the world runs on it.

• ⚡ Data Explosion: Unprecedented amounts of data are generated every second from social media, IoT devices, and business transactions.
• 💻 Increased Power: Advances in computing make it possible to process and analyze these massive datasets quickly.
• 🎯 Competitive Edge: Companies that use data effectively make smarter decisions, understand customers better, and outperform their competition.
• 🤔 Shift in Mindset: Moving away from "gut feeling" to evidence-based decision-making.

What is Business Analytics (BA)? 📊

🎬 Watch: Introduction to Business Analytics

DIKW Pyramid Explorer

Click each level to discover its meaning in the journey from data to wisdom.

🧪 Quick Activity: Which DIKW Level?

1. "28 mm" → Data (a raw number)
2. "28 mm of rain fell in Kathmandu yesterday." → Information (data with context)
3. "When it rains this much, our umbrella sales double the next day." → Knowledge (a pattern)
4. "Move umbrellas to the shop entrance whenever heavy rain is forecast." → Wisdom (the right action)

BA vs. Business Intelligence (BI)

While related, they answer different questions.

BA vs BI: Quiz

Read each statement and decide: is it describing BI or BA? Click your answer.

The Three Pillars of Analytics

🎬 Watch: What Business Analytics Is

🩺 Between "What?" and "What Next?": Diagnostic Analytics

Many textbooks add a fourth type: diagnostic analytics answers "Why did it happen?"

• Uses drill-down, filtering and comparisons on past data.
• Example: sales fell 15% in one branch. Drilling down shows the drop is only on weekday mornings, after a nearby office moved away. (Illustrative.)
• Order: Descriptive → Diagnostic → Predictive → Prescriptive, each harder and more valuable.

Analytics Type Classifier

Classify each scenario. Is it Descriptive, Predictive, or Prescriptive analytics?

From Data to Decisions 🎯

Analytics empowers managers to make smarter, evidence-based choices.

1. Identify Problems & Opportunities: Analytics can reveal a slow decline in sales in a specific region that might otherwise go unnoticed.
2. Understand the 'Why': Drill-down analysis might show the sales dip correlates with a new competitor's marketing campaign.
3. Predict Future Trends: Predictive models can forecast the potential revenue loss if no action is taken.
4. Recommend Optimal Actions: Prescriptive analytics could suggest the most cost-effective counter-promotion to regain market share.

⚾ Real Case: Moneyball

In 2002, the Oakland Athletics baseball team had one of the smallest budgets in its league.

• General manager Billy Beane used statistics to find undervalued players, for example ones who often got on base but were ignored by scouts.
• The team replaced "gut feeling" scouting with data analysis.
• Oakland reached the playoffs, including a then-record 20-game winning streak. Michael Lewis's 2003 book Moneyball made the approach famous.

🎬 Watch: Moneyball and Data

The Business Analytics Process

A structured approach to solving problems with data.

BA Process: Sequence Challenge

Click the steps in the correct order (1 to 6) to build the BA process.

BA in Action: Real-World Examples

Global Example: Amazon
Uses predictive analytics for its "customers who bought this also bought..." feature and prescriptive analytics to optimize its global supply chain and warehouse inventory.

Sector Analytics Explorer

Select a Nepali industry sector to see all three analytics types applied to it.

🧮 Worked Example: A Café Chain Uses All Four Types

Illustrative: a coffee chain with 6 outlets in Kathmandu Valley.

🏗️ What Does a Data-Driven Organisation Need?

• Good data: accurate, complete, recorded consistently.
• Skills: people who can analyse and people who can ask good questions.
• Tools: spreadsheets are a fine start; BI tools later.
• Culture: managers who accept evidence even when it contradicts their instinct.

Presenting Your Findings

Finding the insight is only half the battle. You must communicate it effectively.

Key Takeaways

• Business Analytics is the process of converting raw data into actionable insights to improve decision-making.
• The three types of analytics—Descriptive, Predictive, and Prescriptive—build upon each other to provide a comprehensive view of the business.
• Following a structured BA process ensures that analysis is relevant, rigorous, and leads to valuable outcomes.
• Effectively communicating analytical findings through storytelling and visualization is critical for driving action.

💬 Discuss: Gut or Data?

• Name a decision at your college or workplace made on gut feeling. What data could have helped?
• When should a manager ignore the data?
• What's stopping small Nepali businesses from using analytics?

Image & Video Credits

Images

• Oakland Coliseum during final Battle of the Bay: Quintin Soloviev, CC BY 4.0, via Wikimedia Commons
• Barista prepares espresso at coffee shop: Shixart1985, CC BY 2.0, via Wikimedia Commons

Videos (YouTube)

• Cody Baldwin, "Introduction to Business Analytics (Updated Edition)" (32–120 s)
• HBS Online, "What Is Business Analytics? | Business: Explained" (14–104 s)
• Cloudera, Inc., "How Moneyball's Billy Beane Changed Baseball Forever with Data Analytics" (574–650 s)