UNIT II – MANAGING RESOURCES FOR

BUSINESS ANALYTICS
21BA3206 – BUSINESS ANALYTICS
• To fully understand why BA is necessary, one must understand the
nature of the roles BA personnel perform.
• It is necessary to understand resource needs of a BA program to better
comprehend the value of the information that BA provides.
• Firms may choose to have a modest investment, whereas other firms
may have team or a department.
• BA program requires resource investments in BA personnel, data, and
technology.

What Resource Considerations are

Important to Support BA?
• One way to identify personnel needed for BA staff is to examine what is
required for certification in BA by organizations that provide BA services.
• INFORMS, a major academic and professional organization, announced the
startup of a Certified Analytic Professional (CAP) program in 2013.
• Another more established organization, Cognizure, offers a variety of service
products, including business analytic services.
• It offers a general certification Business Analytics Professional (BAP) exam
that measures existing skill sets in BA staff and identifies areas needing
improvement.
• This is a tool to validate technical proficiency, expertise, and professional
standards in BA.

Business Analytics Personnel

Certification content areas and their relationship to the steps in BA
• In a general sense, BA positions require competencies in business,
analytic, and information systems skills.
• As listed in Table, business skills involve basic management of
people and processes.
• BA personnel must communicate with BA staffers within the
organization (the BA team members) and the other functional areas
within a firm (BA customers and users) to be useful.
• Because they serve a variety of functional areas within a firm, BA
personnel need to possess customer service skills so they can interact
with the firm’s personnel and understand the nature of the problems
they seek to solve.
• BA personnel also need to sell their services to users inside the
firm.
• In addition, some must lead a BA team or department, which
requires considerable interpersonal management leadership skills
and abilities.
• In summary, people who undertake a career in BA are expected to
know how to interact with people and utilize the necessary analytic
tools to leverage data into useful information that can be processed,
stored, and shared in information systems in a way that guides a
firm to higher levels of business performance.
• Structured and Unstructured data is needed to generate analytics.
• As a beginning for organizing data into an understandable
framework, statisticians usually categorize data into meaningful
groups.
• Categorizing Data
• Data Issues
• Data Privacy
• Data Quality

Business Analytics Data

• There are many ways to categorize business analytics data.
• Data is commonly categorized by either internal or external
sources.
• Typical examples of internal data sources include those presented
in Table.
• When firms try to solve internal production or service operations
problems, internally sourced data may be all that is needed.
• Typical external sources of data are numerous and provide great
diversity and unique challenges for BA to process.

Categorizing Data
• Data can be measured quantitatively by sales or qualitatively by
preference surveys or by the amount of consumer discussion.
• A major portion of the external data sources are found in the literature.
• For example, the Indian Census and the International Monetary Fund
(IMF) are useful data sources at the macroeconomic level for model
building.
• Likewise, audience and survey data sources might include Nielsen,
psychographic or demographic data sourced from Claritas, financial
data from Money Control, NSE, BSE, Economic Times, Business
Standard, and so forth.
• Data Quality can be defined as data that serves the purpose for
which it is collected.
• It means different things for different applications, but there are
some commonalities of high-quality data.
• These qualities usually include accurately representing reality,
measuring what it is supposed to measure, being timeless, and
having completeness.
• When data is of high quality, it helps ensure competitiveness, aids
customer service, and improves profitability.

Data Issues
• When data is of poor quality, it can provide information that is
contradictory, leading to misguided decision-making.
• For example, having missing data in files can prohibit some forms’
statistical modeling, and incorrect coding of information can
completely render databases useless.
• Data quality requires effort on the part of data managers to cleanse
data of erroneous information and repair or replace missing data.
• Data Privacy refers to the protection of shared data such that
access is permitted only to those users for whom it is intended.
• It is a security issue that requires balancing the need to know with
the risks of sharing too much.
• For example, competitors can steal a firm’s customers by accessing
addresses.
• Data leaks on product quality failures can damage brand image,
and customers can become distrustful of a firm that shares
information given in confidence.
• To avoid these issues, a firm needs to abide by the current
legislation regarding customer privacy and develop a program
devoted to data privacy.
• Firms need an information technology (IT) infrastructure that
supports personnel in the conduct of their daily business
operations.
• The general requirements for such a system are stated in Table.
• These types of technology are elemental needs for business
analytics operations.
• Of particular importance for BA is the data management
technologies.

Business Analytics Technology

General Information Technology (IT) Infrastructure
• Database Management Systems (DBMS) is a data management
technology software that permits firms to centralize data, manage it
efficiently, and provide access to stored data by application programs.

• DBMS usually serves as an interface between application programs and

the physical data files of structured data.

• In addition, other DBMS systems can handle unstructured data.

• Object-oriented DBMS systems are able to store and retrieve unstructured

data, like drawings, images, photographs, and voice data.

• These types of technology are necessary to handle the load of big data that
most firms currently collect.
• DBMS includes 4 capabilities for organizing, managing, and accessing
data in databases.
1. Data Definition – specify the structure of content in a database to
create database tables and characteristics used in fields to identify
content.
2. Data Dictionary – an automated or manual file that stores the size,
descriptions, format, and other properties needed to characterize data.
3. Database Encyclopedia – a table of contents listing a firm’s current
data inventory and what data files can be built or purchased.
4. Data Manipulation Language – used to search databases for specific
information. (SQL)
Database Encyclopedia Content
• Data Warehouses are databases that store current and historical data of
potential interest to decision makers.
• What a data warehouse does is make data available to anyone who needs
access to it.
• In a data warehouse, the data is prohibited from being altered.
• Data warehouses also provide a set of query tools, analytical tools, and
graphical reporting facilities.
• Some firms use intranet portals to make data warehouse information
widely available throughout a firm.

Data Warehouse
• Data Marts are focused subsets or smaller groupings within a data
warehouse.
• Firms build smaller, decentralized data warehouses (called data marts)
focused on a limited portion of the organization’s data that is placed in a
separate database for a specific population of users.
• For example, a firm might develop a smaller database on just product
quality to focus efforts on quality customer and product issues.
• A data mart can be constructed more quickly and at lower cost.

Data Marts
• Once data has been captured and placed into database management
systems, it is available for analysis with BA tools, including online
analytical processing, data, text, and Web mining technologies.
• Online Analytical Processing (OLAP) is software that allows users to
view data in multiple dimensions.
• For example, employees can be viewed in terms of their age, sex,
geographic location, and so on.
• OLAP would allow identification of the number of employees who are
age 35, male, and in the western region of a country.
• OLAP allows users to obtain online answers to ad hoc questions
quickly, even when the data is stored in very large databases.
• Data Mining is the application of a software, discovery-driven process
that provides insights into business data by finding hidden patterns and
relationships in large databases and inferring rules from them to predict
future behavior.
• The observed patterns and rules are used to guide decision-making.
• They can also act to forecast the impact of those decisions.
• It is an ideal predictive analytics tool used in the BA process.
Types of Information Obtainable with Data Mining Technology
• Text Mining is a software application used to extract key elements
from unstructured data sets, discover patterns and relationships in the
text materials, and summarize the information.
• Given that the majority of the information stored in businesses is in the
form of unstructured data, the need to explore and find useful
information will require increased use of text mining tools in the future.
• Emails, pictures, memos, transcripts, survey responses, business
receipts, and so on
• Web Mining seeks to find patterns, trends, and insights into customer
behavior from users of the Web.
• Marketers, for example, use BA services like Google Trends and Google
Insights for Search to track the popularity of various words and phrases to
learn what consumers are interested in and what they are buying.
1. Microsoft Excel:
• Microsoft Excel spreadsheet systems have add-in applications
specifically used for BA analysis.
• Analysis ToolPak is an Excel add-in that contains a variety of statistical
tools for the descriptive and predictive BA process steps.
• Another Excel add-in, Solver, contains operations research
optimization tools used in the prescriptive step of the BA process.

Focused Software Applications

2. SAS® Analytics Pro:
• A desktop statistical toolset allowing users to access, manipulate,
analyze, and present information in visual formats.
• It permits users to access data from nearly any source and transform it
into meaningful, usable information presented in visuals.
• It is designed for use by analysts, researchers, statisticians, engineers,
and scientists who explore, examine, and present data in a variety of
formats.
• It is useful in the descriptive and predictive steps of the BA process.
3. IBM’s SPSS:
• Software offers users a wide range of statistical and decision-making
tools.
• These tools include methodologies for data collection, statistical
manipulation, modeling trends in structured and unstructured data, and
optimizing analytics.
• Depending on the statistical packages acquired, the software can cover
all three steps in the BA process.
4. LINGO:
• LINGO is a comprehensive tool designed to make building and solving
optimization models faster, easier, and more efficient.
• LINGO provides a completely integrated package that includes;
• an understandable language for expressing optimization models,
• a full-featured environment for building and editing problems, and
• a set of built-in solvers to handle optimization modeling.
Types of Optimization Modeling:
• Linear (something related to a line),
• Nonlinear (change of the output is not proportional to the change
of the input),
• Quadratic (f(x) = ax2 + bx + c, where a, b, and c ≠ 0. The graph
of a quadratic function is a curve called a parabola, "U" shape),
• Stochastic (having a random probability distribution or pattern
that may be analzsed statistically but may not be predicted
precisely), and
• Integer Programming models (variables are constrained to take
integer or whole number and not fractional values).
• According to Isson and Harriott, BA to be successful it must be fully
integrated throughout a firm.
• This requires BA resources to be aligned in a way that permits;
• a view of customer information within and across all departments,
• access to customer information from multiple sources,
• access to historical analytics from a central repository, and
• making technology resources align to be accountable for analytic
success.

Organization Structures Aligning BA

• The commonality of these requirements is the desire for an alignment that
maximizes the flow of information into and through the BA operation.
• In turn processes and shares information to desired users throughout the
organization.
• Accomplishing this information flow objective requires consideration of
differing organizational structures and managerial issues that help align
BA resources to best serve an organization.
• Most organizations are hierarchical;
• Senior Managers – strategic planning decisions,
• Middle-level Managers – tactical planning decisions, and
• Lower-level Managers – operational planning decisions.
• Within the hierarchy, other organizational structures exist to support the
development and existence of groupings of resources like those needed for
BA.
• These additional structures include programs, projects, and teams.

Organization Structures
• A program is the process that seeks to create an outcome and usually
involves managing several related projects with the intention of improving
organizational performance.
• A program can also be a large project.
• A project tends to deliver outcomes and can be defined as having
temporary social systems within or across organizations to accomplish
particular and clearly defined tasks, usually under time constraints.
• Projects are often composed of teams.
• A team consists of a group of people with skills to achieve a common
purpose.
• Teams are especially appropriate for conducting complex tasks that have
many interdependent subtasks.
Hierarchal relationships program, project, and team planning
• Senior managers establish a BA program initiative to mandate the creation
of a BA grouping within the firm as a strategic goal.
• A BA program does not always have an end-time limit.
• Middle-level managers reorganize the strategic BA program goals into
doable BA project initiatives to be undertaken in a fixed period of time.
• Some firms have only one project and others have multiple BA projects
requiring the creation of multiple BA groupings.
• Projects usually have an end-time date in which to judge the
successfulness of the project.
• The projects in some cases are further reorganized into smaller
assignments, called BA teams.
• BA teams may have;
• a long-standing time limit (for example, to exist as the main source of
analytics for an entire organization) or
• a fixed period (for example, to work on a specific product quality
problem and then end).
• Planning the BA resource allocation within the organizational structure
of a firm is a starting place for the alignment of BA to best serve a firm’s
needs.
• Aligning the BA resources requires a determination of the amount of
resources a firm wants to invest.
• Because of the varied skill sets in information systems, statistics, and
operations research methods, a more common beginning for a BA
initiative is the creation of a BA team organization.
• Another way of aligning BA resources within an organization is to use a
project structure.
• Even larger investments in BA resources might be required by firms that
decide to establish a whole BA department.
• There are different ways to structure an organization to align its BA
resources to serve strategic plans.
• In organizations where functional departments are structured on a strict
hierarchy, separate BA departments or teams have to be allocated to each
functional area.
• This Functional Organization Structure may have the benefit of stricter
functional control by the VPs of an organization and greater efficiency in
focusing on just the analytics within each specialized area.
• This structure does not promote the cross-department access that is
suggested as a critical success factor for the implementation of a BA
program.

Functional Organization Structure

• The needs of each firm for BA sometimes dictate positioning BA within
existing organization functional areas.
• Clearly, many alternative structures can house a BA grouping.
• For example, because BA provides information to users, BA could be
included in the functional area of Management Information Systems, with
the Chief Information Officer (CIO) acting as both the Director of
Information Systems (which includes database management) and the
leader of the BA grouping.
• An alternative organizational structure commonly found in large
organizations aligns resources by project or product and is called a Matrix
Organization.
• As illustrated in Figure, this structure allows the VPs some indirect control
over their related specialists, which would include the BA specialists but
also allows direct control by the project or product manager.
• This, similar to the functional organizational structure, does not promote
the cross-department access suggested for a successful implementation of
a BA program.
Matrix Organization Structure
• The literature suggests that the organizational structure that best aligns
BA resources is one in which a department, project, or team is formed in
a staff structure where access to and from the BA grouping of resources
permits access to all areas within a firm, as illustrated in Figure.

Centralized BA department, project, or team organization structure

• The dashed line indicates a staff (not line management) relationship.
• This centralized BA organization structure minimizes investment costs by
avoiding duplications found in both the functional and the matrix styles of
organization structures.
• At the same time, it maximizes information flow between and across
functional areas in the organization.
• Bartlett suggests other advantages of a centralized structure. These
include;
• a reduction in the filtering of information traveling upward through the
organization,
• insulation from political interests,
• breakdown of the siloed functional area communication barriers,
• a more central platform for reviewing important analyses that
require a broader field of specialists,
• analytic-based group decision-making efforts,
• separation of the line management leadership from potential clients
(for example, the VP of marketing would not necessarily come between the BA
group working on customer service issues for a department within marketing),
and
• better connectivity between BA and all personnel within the area of
problem solving.
Reasons for BA Initiative and Organization Failure
• Regardless of the size of the investment in BA resources, it must be
aligned to allow maximum information flow between and across
functional areas to achieve the most benefits BA can deliver.
• When it comes to getting the BA job done, it tends to fall to a BA team.
• For firms that employ BA teams the participants can be defined by the
roles they play in the team effort.
• Some of the roles BA team participants undertake and their typical
background are presented in Table.
• Aligning BA teams to achieve their tasks requires collaboration efforts
from team members and from their organizations.
• Like BA teams, collaboration involves working with people to achieve a
shared and explicit set of goals consistent with their mission.
• BA teams also have a specific mission to complete.
• Collaboration through teamwork is the means to accomplish their mission.

Teams
BA Team Participant Roles
• Team members’ need for collaboration is motivated by;
• changes in the nature of work (no more silos to hide behind, much more
open environment, and so on),
• growth in professions (for example, interactive jobs tend to be more
professional, requiring greater variety in expertise sharing), and
• the need to nurture innovation (creativity and innovation are fostered
by collaboration with a variety of people sharing ideas).
• To keep one’s job and to progress in any business career, particularly in
BA, team members must encourage working with other members inside a
team and out.
• For organizations, collaboration is motivated by;
• the changing nature of information flow (that is, hierarchical flows
tend to be downward, whereas in modern organizations, flow is in all
directions) and
• changes in the scope of business operations (that is, going from
domestic to global allows for a greater flow of ideas and information
from multiple sources in multiple locations).
• To encourage collaboration;
• technology (e-mail, instant messaging, wikis, Facebook and Twitter)
• collaborative writing, reviewing, and editing efforts
• webinars, audio and video conferencing
• Reward systems should be put into place to reward team effort.
• Teams should be rewarded for their performance.
• Individuals should be rewarded for performance in a team.
• Middle-level managers build teams, coordinate their work, and monitor
their performance
• Senior management should establish collaboration and teamwork as a vital
function.
Reasons for BA Team Failures
• Aligning organizational resources is a management function.
• There are general management issues that are related to a BA program,
and some are specifically important to operating a BA department, project,
or team.
• The ones covered in this section includes;
• Establishing an Information Policy,
• Outsourcing Business Analytics,
• Ensuring Data Quality,
• Measuring Business Analytics Contribution, and
• Managing Change.

Management Issues
• There is a need to manage information, is accomplished by establishing
an information policy;
• to structure rules on how information and data are to be organized and
maintained and
• who is allowed to view the data or change it.
• The information policy specifies organizational rules for;
• Sharing,
• Disseminating,
• Acquiring,
• Standardizing,
• Classifying, and
• Inventorying all types of information and data.
1. Establishing an Information Policy
• It defines the specific procedures and accountabilities that identify;
• which users and organizational units can share information,
• where the information can be distributed, and
• who is responsible for updating and maintaining the information.
• In small firms, business owners might establish the information policy.
• For larger firms, data administration may be responsible for the specific
policies and procedures for data management.
• Responsibilities could include;
• Developing the Information Policy,
• Planning Data Collection and Storage,
• Overseeing Database Design,
• Developing the Data Dictionary, and
• Monitoring how Information Systems Specialists and End User Groups
use Data.
• A more popular term for many of the activities of data administration is
Data Governance.
• Data Governance - Establishing policies and processes for managing the
availability, usability, integrity, and security of the data employed in
businesses.
• It is specifically focused on;
• Promoting Data Privacy,
• Data Security,
• Data Quality, and
• Compliance with Government Regulations.
• Such information policy, data administration, and data governance must be
in place to guard and ensure data is managed for the betterment of the
entire organization.
• These steps are also important in the creation of Database Management
Systems and their support of BA tasks.
• Outsourcing – a strategy by which an organization chooses to allocate
some business activities and responsibilities from an internal source to an
external source.
• Outsourcing business operations is a strategy that an organization can use
to implement a BA program, run BA projects, and operate BA teams.
• Any business activity can be outsourced, including BA.
• Outsourcing is an important BA management activity that should be
considered as a viable alternative in planning an investment in any BA
program.

2. Outsourcing Business Analytics

• BA is a staff function that is easier to outsource than other line
management tasks, such as running a warehouse.
• To determine if outsourcing is a useful option in BA programs,
management needs to balance the advantages of outsourcing with its
disadvantages.
• Some of the advantages and disadvantages of outsourcing BA include
those listed in Tables.
Advantages of Outsourcing BA
Disadvantages of Outsourcing BA
• Managing outsourcing of BA does not have to involve the entire
department.
• Most firms outsource projects or tasks found to be too costly to assign
internally.
• For example, firms outsource cloud computing services to outside vendors,
and other firms outsource software development or maintenance of legacy
programs to offshore firms in low-wage areas of the world to cut costs.
• Outsourcing BA can also be used as a strategy to bring BA into an
organization.
• Initially, to learn how to operate a BA program, project, or team, an
outsource firm can be hired for a limited, contracted time period.
• The client firm can then learn from the outsourcing firm’s experience and
instruction.
• Once the outsourcing contract is over, the client firm can form its own BA
department, project, or team.
• Business analytics is based on data assumed to be of high quality.
• Data quality – accuracy, precision, and completeness of data.
• High-quality data is considered to correctly reflect the real world in which
it is extracted.
• Poor quality data caused by;
• data entry errors,
• poorly maintained databases,
• out-of-date data, and
• incomplete data usually leads to bad decisions and undermines BA
within a firm.

3. Ensuring Data Quality

• Organizationally, the DBMS personnel are managerially responsible for
ensuring data quality.
• Because of its importance and the possible location of the BA department
outside of the MIS department, it is imperative that whoever leads the BA
program should seek to ensure data quality efforts are undertaken.
• Ideally, a properly designed database with organization-wide data
standards and efforts taken to avoid duplication or inconsistent date
elements should have high-quality data.
• Unfortunately, times are changing, and more organizations allow
customers and suppliers to enter data into databases via the Web directly.
• As a result, most of the quality problems originate from data input such as
misspelled names, transposed numbers, or incorrect or missing codes.
• An organization needs to identify and correct faulty data and establish
routines and procedures for editing data in the database.
• The analysis of data quality can begin with a Data Quality Audit, where a
structured survey or inspection of accuracy and level of completeness of
data is undertaken.
• This audit may be of the entire database, just a sample of files, or a survey
of end users for perceptions of the data quality.
• If during the data quality audit files are found that have errors, a process
called data cleansing or data scrubbing is undertaken to eliminate or
repair data.
• Some of the areas in a data file that should be inspected in the audit and
suggestions on how to correct them are presented in Table.
Quality Data Inspection Items and Recommendations
• The investment in BA must continually be justified by communicating the
BA contribution to the organization for ongoing projects.
• This means that performance analytics should be computed for every BA
project and BA team initiative.
• These analytics should provide an estimate of the tangible and intangible
values being delivered to the organization.
• This should also involve establishing a communication strategy to promote
the value being estimated.
• Measuring the value and contributions that BA brings to an organization is
essential to helping the firm understand why the application of BA is
worth the investment.

4. Measuring Business Analytics Contribution

• Some BA contribution estimates can be computed using standard financial
methods,
• Payback Period (how long it takes for the initial costs are returned by
profit) or
• Return on Investment (measure the amount of return on a particular
investment, relative to the investment's cost).
• When intangible contributions are a major part of the contribution being
delivered to the firm, other methods like;
• Cost / Benefit Analysis, which include intangible benefits, should be
used.
• The continued measurement of value that BA brings to a firm is not meant
to be self-serving, but it aids the organization in aligning efforts to solve
problems and find new business opportunities.
• By continually running BA initiatives, a firm is more likely to identify
internal activities that should and can be enhanced by employing
optimization methodologies during the Prescriptive step of the BA
process.
• It can also help identify underperforming assets.
• In addition, keeping track of investment payoffs for BA initiatives can
identify areas in the organization that should have a higher priority for
analysis.
• Indeed, past applications and allocations of BA resources that have shown
significant contributions can justify priorities established by the BA
leadership about where there should be allocated analysis efforts within
the firm.
• They can also help acquire increases in data support, staff hiring, and
further investments in BA technology.
• Wells (2000) found that what is critical in changing organizations is
organizational culture and the use of change management.
• Organizational culture is how an organization supports cooperation,
coordination, and empowerment of employees.
• Change Management – an approach for transitioning the organization to
a changed and desired future state.
• Change management is a means of implementing change in an
organization, such as adding a BA department.

5. Managing Change
• Changes in an organization can be either;
• Planned (a result of specific and planned efforts at change with
direction by a change leader), or
• Unplanned (spontaneous changes without direction of a change
leader).
• The application of BA invariably will result in both types of changes
because of BA’s;
• Specific problem-solving role (a desired, planned change to solve a
problem) and
• Opportunity finding exploratory nature (unplanned new knowledge
opportunity changes).
Change Management Targets
• It is not possible to gain the benefits of BA without change.
• The intent is change that involves finding new and unique information on
which change should take place in people, technology, or business.
• By instituting the concept of change management within an organization a
firm can align resources, and processes to more readily accept changes that
BA may suggest.
• Instituting the concept of change management in any firm depends on the
unique characteristics of that firm.
• There are, though, a number of activities in common with successful
change management programs, and they apply equally to changes in BA
departments, projects, or teams.
Change Management Best Practices