Data Analytics with Python

Lecture 1: Introduction to data analytics

Dr. A. Ramesh
DEPARTMENT OF MANAGEMENT
IIT ROORKEE

1
 Objective of the course
• The principle focus of this course is to introduce conceptual understanding
using simple and practical examples rather than repetitive and point click
mentality
• This course should make you comfortable using analytics in your career
and your life
• You will know how to work with real data, and might have learned many
different methodologies but choosing the right methodology is important

2
 Objective of the course Contd…

• The danger in using quantitative method does not generally

lie in the inability to perform the calculation
• The real threat is lack of fundamental understanding of:
– Why to use a particular technique of procedure
– How to use it correctly and,
– How to correctly interpret the result

3
 Learning objectives
1. Define data and its importance
2. Define data analytics and its types
3. Explain why analytics is important in today’s business environment
4. Explain how statistics, analytics and data science are interrelated
5. Why python?
6. Explain the four different levels of Data:
– Nominal
– Ordinal
– Interval and
– Ratio

4
 1. Define Data and its importance

• Variable, Measurement and Data

• What is generating so much data?

• How data add value to the business?

• Why data is important?

5
 1.1 Variable, Measurement and Data

• Variables – is a characteristic of any entity being studied that is capable of

taking on different values

• Measurements – is when a standard process is used to assign numbers to

particular attributes or characteristic of a variable

• Data – data are recorded measurements

6
 1.2 What is generating so much data?

• Data can be generated by

– Humans,
– Machines or
– Humans-machines combines
• It can be generated anywhere where any information is
generated and stored in structured or unstructured formats

7
 1.3 How data add value to business?
Data warehouse

Development of Data Product Discovery of Data Insight

Algorithm solutions in production, marketing and sales Quantitative data analysis to help steer
etc.(e.g. Recommendation Engines) strategic business decision

Business value

Source:https://datajobs.com/

8
Data Products

9
 1.4 Why Data is important?

• Data helps in make better decisions

• Data helps in solve problems by finding the reason for
underperformance
• Data helps one to evaluate the performance.
• Data helps one improve processes
• Data helps one understand consumers and the market

10
 2. Define data analytic and its types
• Define data analytics

• Why analytics is important?

• Data analysis

• Data analytics vs. Data analysis

• Types of Data analytics

11
 2.1. Define data analytics

• Analytics is defined as “the scientific process of transforming data into

insights for making better decisions”
• Analytics, is the use of data, information technology, statistical analysis,
quantitative methods, and mathematical or computer-based models to
help managers gain improved insight about their business operations and
make better, fact-based decisions – James Evans
• Analysis = Analytics ?

12
 2.2 Why analytics is important?

• Opportunity abounds for the use of analytics and big data

such as:
1. Determining credit risk
2. Developing new medicines
3. Finding more efficient ways to deliver products and services
4. Preventing fraud
5. Uncovering cyber threats
6. Retaining the most valuable customers

13
 2.3 Data analysis
• Data analysis is the process of examining, transforming, and
arranging raw data in a specific way to generate useful
information from it
• Data analysis allows for the evaluation of data through
analytical and logical reasoning to lead to some sort of
outcome or conclusion in some context
• Data analysis is a multi-faceted process that involves a
number of steps, approaches, and diverse techniques

14
Analysis 2.4 Data analytics vs. Data analysis

Past

Explain
How?
Why?

15
2.4 Data analytics vs. Data analysis Analytics

Future

Explore potential future events

16
2.4 Data analytics vs. Data analysis
Analytics

Qualitative Quantitative

ll
ll
Intuition + analysis Formulas + algorithms

17
 Analysis

Quantitative

ll
Qualitative Data + how the sale decreased last summer
ll

Explains How And Why Story ends the way it did ?

18
 Analysis =/ Analytics
Data Analysis =/ Data analytics

Business Analysis =/ Business analytics

19
 2.5 Classification of Data analytics

Based on the phase of workflow and the kind of analysis required, there are
four major types of data analytics.

• Descriptive analytics

• Diagnostic analytics

• Predictive analytics

• Prescriptive analytics

20
Classification of Data analytics

https://www.governanceanalytics.org/knowledge-
base/Main_Tools/Data_classification_and_analysis

21
 Descriptive Analytics
• Descriptive Analytics, is the conventional form of Business Intelligence and
data analysis
• It seeks to provide a depiction or “summary view” of facts and figures in
an understandable format
• This either inform or prepare data for further analysis
• Descriptive analysis or statistics can summarize raw data and convert it
into a form that can be easily understood by humans
• They can describe in detail about an event that has occurred in the past

22
 Example
A common example of Descriptive Analytics are company reports that simply
provide a historic review like:
• Data Queries
• Reports
• Descriptive Statistics
• Data Visualization
• Data dashboard

Source: https://www.linkedin.com/learning/478e9692-d13d-338f-907e-d76f0724d773

23
 Diagnostic analytics

• Diagnostic Analytics is a form of advanced analytics which examines data

or content to answer the question “Why did it happen?”

• Diagnostic analytical tools aid an analyst to dig deeper into an issue so

that they can arrive at the source of a problem

• In a structured business environment, tools for both descriptive and

diagnostic analytics go parallel

24
 Example

• It uses techniques such as:

1. Data Discovery

2. Data Mining

3. Correlations

25
 Predictive analytics

• Predictive analytics helps to forecast trends based on the current events

• Predicting the probability of an event happening in future or estimating

the accurate time it will happen can all be determined with the help of
predictive analytical models

• Many different but co-dependent variables are analysed to predict a trend

in this type of analysis

26
Source: https://www.logianalytics.com/wp-content/uploads/2017/11/predictive-1.png

27
 Example

• Set of techniques that use model constructed from past data to predict
the future or ascertain impact of one variable on another:
1. Linear regression
2. Time series analysis and forecasting
3. Data mining

Source: https://bigdata-madesimple.com/5-examples-predictive-analytics-travel-industry/

28
 Prescriptive analytics

• Set of techniques to indicate the best course of action

• It tells what decision to make to optimize the outcome
• The goal of prescriptive analytics is to enable:
1. Quality improvements
2. Service enhancements
3. Cost reductions and
4. Increasing productivity

29
 Prescriptive analytics: Example

• Optimization Model
• Simulation
• Decision Analysis

30
 3. Explain why analytics is important

• Demand for Data Analytics

• Element of data Analytics

31
3. Explain why analytics is important

Data Scientist
Search Trends
Statistician, Operations Researcher

32
https://timesofindia.indiatimes.com/india/Data-scientists-earning-more-than-
CAs-engineers/articleshow/52171064.cms

33
 3.1 Demand for Data Analytics

http://timesofindia.indiatimes.com/articleshow/52171064.cms?utm_source=
contentofinterest&utm_medium=text&utm_campaign=cppst

34
3.2 Element of data Analytics

35
 4. Data analyst and Data scientist

• The requisite skill set

• Difference between Data analyst and Data Scientist

36
 4.1 The requisite skill set

Technology;
Mathematic
Hacking Skill
Expertise

Business and
strategy Data Science
acumen

37
4.1 The requisite skill set

Mathematic Technology;
Expertise Hacking Skill

Business and
strategy
Data Science
acumen

38
4.1 The requisite skill set

Mathematic Technology;
Expertise Hacking Skill

Business and
strategy
Data Science
acumen

39
 4.2 Difference between Data analyst and Data Scientist

Business Administration
Analyst

Domain specific responsibility : For Example marketing analyst, Financial analyst etc.

Data exploration analysis and insight

Data Scientist
Advance algorithms and machine learning

Data product engineering

Source:https://datajobs.com/

40
5. Why python?

Features
• Simple and easy to learn
• Freeware and Open source
• Interpreted
• Dynamically Typed
• Extensible
• Embedded
• Extensive library

41
5. Why python?

Usability
• Desktop and web applications
• Database applications
• Networking applications
• Data analysis (Data Science)
• Machine learning
• IoT and AI applications
• Games

42
Companies using Python

43
Why Jupyter NoteBook?

Why?
• Client – Server Application
• Edit code on web browser
• Easy in documentation
• Easy in demonstration
• User- friendly Interface

44
 6. Explain the four different levels of Data
• Types of Variables
• Levels of Data Measurement
• Compare the four different levels of Data:
Nominal
Ordinal
Interval and
Ratio
• Usage Potential of Various Levels of Data
• Data Level, Operations, and Statistical Methods

45
 6.1 Types of Variables

Data

Categorical Numerical

Examples:
 Marital Status
 Political Party Discrete Continuous
 Eye Color
Examples: Examples:
(Defined categories)
 Number of Children  Weight
 Defects per hour  Voltage
(Counted items) (Measured characteristics)
 6.2 Levels of Data Measurement

• Nominal — Lowest level of measurement

• Ordinal
• Interval
• Ratio — Highest level of measurement

47
 6.3.1 Nominal

• A nominal scale classifies data into distinct categories in which no ranking

is implied
• Example : Gender, Marital Status

48
 6.3.2 Ordinal scale

• An ordinal scale classifies data into distinct categories in which ranking is

implied
• Example:
– Product satisfaction  Satisfied, Neutral, Unsatisfied
– Faculty rank  Professor, Associate Professor, Assistant Professor
– Student Grades  A, B, C, D, F

49
 6.3.3. Interval scale

• An interval scale is an ordered scale in which the difference between

measurements is a meaningful quantity but the measurements do not have a
true zero point.
• Example
– Temperature in Fahrenheit and Celsius
– Year

50
 6.3.4 Ratio scale

• A ratio scale is an ordered scale in which the difference between the

measurements is a meaningful quantity and the measurements have a true
zero point.
• Example
– Weight
– Age
– Salary

51
6.4 Usage Potential of Various
Levels of Data
Ratio
Interval
Ordinal

Nominal

52
6.5 Impact of choice of measurement scale

Statistical
Data Level Meaningful Operations
Methods

Nominal Classifying and Counting Nonparametric

Ordinal All of the above plus Ranking Nonparametric

Interval All of the above plus Parametric

Addition, Subtraction

Ratio All of the above plus

multiplication and division Parametric

53
Thank You

54