Machine Learning for Business Analytics, 2nd Edition

1INTRODUCTION

1.1 WHAT IS BUSINESS ANALYTICS?

Business analytics (BA) is the practice and art of bringing quantitative data to bear on decision‐making. The term means different things to different organizations.

Consider the role of analytics in helping newspapers survive the transition to a digital world. One tabloid newspaper with a working‐class readership in Britain had launched a web version of the paper, and did tests on its home page to determine which images produced more hits: cats, dogs, or monkeys. This simple application, for this company, was considered analytics. By contrast, the Washington Post has a highly influential audience that is of interest to big defense contractors: it is perhaps the only newspaper where you routinely see advertisements for aircraft carriers. In the digital environment, the Post can track readers by time of day, location, and user subscription information. In this fashion the display of the aircraft carrier advertisement in the online paper may be focused on a very small group of individuals—say, the members of the House and Senate Armed Services Committees who will be voting on the Pentagon's budget.

Business analytics, or more generically, analytics, includes a range of data analysis methods.

Many powerful applications involve little more than counting, rule checking, and basic arithmetic. For some organizations, this is what is meant by analytics.

The next level of business analytics, now termed business intelligence (BI), refers ...