A Career in Database Mining & Analytics

Page - 1 Introduction to Analytics Would you like to be part of a domain that promises huge growth, rapid rises and, best of all, a shortage of demand for experienced resources in the US and India. Are you better at analyzing numbers than shooting e mails! "hen careers in a niche industry like #atabase $ining % Analytics may &ust help get you there. #atabase mining and analytics are one of the new sunrise careers of not &ust the Indian economy but also the global digital economy. While careers in #atabase mining and analytics ha'e typically been offered by the business process outsourcing sector under the sub brand of (nowledge )rocess *utsourcing, increasingly robust demand for analytics professionals ha'e prompted both Information "echnology firms and domestic firms based in India. #atabase mining and analytics are defined as using the power of hidden information locked in databases to re'eal consumer and product insights, trends and patterns for future tactical and operational strategies. A key differentiator between Analytics and $arket +esearch is that analytics relies on data which is existing within a database while market research generally in'ol'es collection, collation and tabulation of the data. $arket research in'ol'es mostly dealing with sur'ey le'el data, as in ,uestionnaires that measure consumer response to marketing stimulus. It includes link analysis for websites, manipulating data to be easy to read by softwares like S)SS, creating cross tabs and statistical analysis including factor analysis and cluster analysis. -owe'er, it is wholly centered on ,uestionnaires and deals exclusi'ely with customer le'el data that answers ,uestions related to marketing. "here is no market research in risk, credit, or collections. "hus, market research is limited in the kinds of analytical ,uestions it tries to answer and, thus, the breadth of analysis as well. .usiness Intelligence is defined as the seamless dissemination of information throughout the organization and is a broader term, which in'ol'es and includes analytics as well as reporting systems. It includes softwares like customer relationship management, supply chain management, planning as well as reporting systems. .usiness intelligence broadly includes analytics within a company but it can also include areas that deal more with flow of information or knowledge management as well. While database analytics assumes data is present, business intelligence focuses more on strategy. "he field of data analytics is 'ast and it comprises the following types. Previous

Page - 2 Types of Analytics 1) eporting or Descriptive Analytics /ach organization relies on series of Manage!ent Infor!ation "yste!s 0commonly called $IS1 to gather the current state of business as well as any emerging trend. "his typically in'ol'es sales, finance, customer and competitor data, which is presented within spread sheets and presentations. +eports tend to be either regular 0like monthly and ,uarterly1 or ad hoc 0for special in'estigati'e analysis1. "his is known as #escripti'e Analytics simply because it describes the data which is present. While reporting or descripti'e analytics is often the starting point in analytics careers, a proper grounding in this domain is necessary both to build an eye for detail in dealing with large amounts of data and for polishing the presentation skills for presenting insights from the data. 2) Modeling or Predictive Analytics )redicti'e Analytics refers to the art and science of using statistical tests, hypotheses and methods to build up predicti'e recommendations. "hese recommendations can range from which type of customer to call by phone for a credit card or insurance, to which type of mobile scheme to offer to a cell phone customer by a short message 0S$S1, or to what kind of customers are likely to default on the loans they ha'e taken. )redicti'e analytics includes techni,ues like segmentation and regression modeling. It is generally considered both high 'alue, and a background in statistics helps in preparing for predicti'e analytics careers. #) Data-Driven "trategy "his is also called "est 2ontrol or 2hampion 2hallenger "esting. "his is done by segmenting the data population into test 0on which a new strategy called the 2hallenger Strategy is to be tested1 and control 0which uses existing strategy called 2hampion Strategy1. .uilding association rules which describe which parts of the product or customer data are clustered or co related together are also part of analytics. $asic Do!ains %it&in Analytics #ata #ri'en Analytics, by definition, thri'es in industries, which ha'e large amounts of data and high 'olume transactions, which need systematic and scientific analytics to cut costs and grow sales. "he following domains offer employment opportunities to both new comers and experienced analytics professionals. "hese can be both in domestic firms, capti'e outsourcing firms, or third party business process outsourcing companies. Page - #

1) etail "ales Analytics +etail Sales Analytics deals with the handling of 'ast amounts of )oint of Sales data, in'entory data, payment data, and promotional data, to help increase sales in retail stores, especially in organized retail. "he use of +3I#s, /lectronic )ayment and .ar Scanning helps capture the data better and store it in 'ast databases. An example of this is the famous "hursday baby diaper beer sales phenomenon. A big retailer found that on "hursday e'enings, sales of beer and baby diapers were highly co related. -e then found that is was due to young couples preparing for the week end by buying supplies of diapers and beer. "hus, by placing diapers and beer closer together sales could be boosted up. "his is an example of market basket analytics in which a large amount of data is scrutinized to see which products sell well together. Wal $art, the American retail giant, established a competiti'e edge o'er its ri'als by proacti'ely using data dri'en analytics to cut costs and, thus, offer goods cheaper than others. Another example of a big retailer is "arget, which has it4s own capti'e back end analytics in India. In India, since +eliance +etail, 3uture 5roup, Walmart .harti ha'e started setting up shop, this is a sector that is bound to grow e'en within the domestic sector, as these high 'olume retailers need data dri'en decisions to s,ueeze the maximum from their retail stores. 2) 'inancial "ervices Analytics 3inancial ser'ices use analytics extensi'ely. "his is because they are in a 'ery competiti'e field, ha'e millions of customers and a lot of transactions. It is extremely important for them to store data for billing purposes and to reco'er the money they lend out as well as the deposits they collect. An incremental gain of a few basis points 0one hundredth of 6 percentage is a basis point1 in profitability can lead to millions of dollars in aggregate profits. Within financial ser'ices analytics, the broad sub categories are7 a( is) & Credit Analytics +isk and credit functions measure the ability of a customer to pay back loans or debt owed by them. #elin,uent customers are those that ha'e fallen behind in paying back debt as per agreed schedule. #ebt can be fixed installment like /$Is for a personal loan, and debt can be re'ol'ing as in 'ariable amounts that can be paid for credit card outstanding including the minimum balance. #ebt can also be secured debt as secured against houses, consumer durables, two wheelers, automobiles as collateral, or it can be unsecured as in personal loans or credit card debt that ha'e no collateral or backing. Page - * A risk analyst de'elops scorecards that help measure the risk worthiness of both new and existing customers. As financial ser'ice instruments are priced against risk, the riskier the customer, the more they are charged in terms of interest rate. .ut this has to be balanced with total repaying ability of the customer, including sources of income and current le'erage. In addition, the income of customers, especially in India, is changing rapidly and there is also un declared income as black money. #oing the analysis for millions of customers is what makes risk and credit analytics one of the hottest sectors to be in, as credit analysts are in demand with all banks, outsourcing corporate and finance companies. I2I2I has a big analytics unit 0called .usiness Intelligence Unit1 and 2itigroup has both domestic analytics 0in 2hennai1 and international analytics centers 0in .angalore1.

An example is a bank using repayment beha'ior to automatically increase credit limit selecti'ely based on types of purchases made and repayment beha'ior. "his offer is then con'eniently sent to the customer in the form of an S$S. .y increasing credit limits, the bank tries to encourage spending and a'erage recei'ables. b( Mar)eting Analytics $arketing Analytics helps in customer ac,uisition and retention. It does so by helping choose more responsi'e customers and selling through a wide 'ariety of channels like call centers, direct mail, S$S through mobiles, and e mail. It is marketing analytics which helps to bring in new customers by gi'ing inputs to the marketing team and feedback to sales and distribution channels. An example of using analytics is that some banks use A"$s screen to offer home loans, personal loans based on details of sa'ings bank account with that bank. "his is enabled because that particular bank has well established data centers in which each customer touch point is automatically mapped and then modeled to gi'e customers targeted offers. Another example is an international bank using its closed loan customers database and selling nearly 6 lakh credit cards by calling all customers who paid back the loan without default and getting a 689 response rate through datamining and analytical scorecards. c( Collections Analytics 2ollections Analytics focuses on reco'ery from delin,uent customers using optimized efforts like telephones, direct mails, e mails or 'isits. Its aim is to maximize reco'ery at minimum costs. d( 'raud Analytics 3raud Analytics seeks to build in triggers or automated alarms, if there is any unusual trend or beha'ior in spending by the customer especially in credit cards. Page - + e( Pricing Analytics )ricing Analytics tries to gi'e the most optimized price, ade,uately compensating for risk as well as the competition. )ricing Analytics is a 'ast field, and is also a part of financial ser'ices analytics, especially in products like insurance. #) Teleco!!unications "elecom Analytics has the fields of marketing analytics defined abo'e, but an important part is also attrition modeling or churn analytics. It also analyzes the wide 'ariety of pricing schemes and options and the customer response to them. In addition, it has delin,uency analytics as well. *) P&ar!aceutical or Clinical Analytics 2linical trials depend on test and control of thousands of patients on new drugs. 2linical "rial Analytics focuses on large number of 'ariables that may or may not affect the drug response. +) "upply C&ain Analytics Supply 2hain Analytics comprises in'entory optimization, tracking turn around time, multiple reports, and how to minimize the distribution costs. ,) Transportation Analytics

"ransportation Analytics, while co'ered more extensi'ely in the field of operations research, seeks at minimizing route length or fuel costs, or pricing of fares. -) .nline or %ebsite Analytics Website Analytics focuses on analyzing traffic to the website from sources, and how to retain them on the website for longer time or purchase more goods. It also in'ol'es a bit of search engine optimization to make sure the website is rele'ant in searches by search engines. "uccess "tories ICICI $an) has been a pioneer in using analytics for cross selling in financial ser'ices in India through A"$s, Internet, -ome :oans and #eposits. It has done so by le'eraging its in'estments in data centers through "era #ata, a world leader in data storage and building an ecosystem, which uses flow of information to capture customer le'el data, and then work with its in house business intelligence unit 0analytics1 team to build models to target customers. Page - + e( Pricing Analytics )ricing Analytics tries to gi'e the most optimized price, ade,uately compensating for risk as well as the competition. )ricing Analytics is a 'ast field, and is also a part of financial ser'ices analytics, especially in products like insurance. #) Teleco!!unications "elecom Analytics has the fields of marketing analytics defined abo'e, but an important part is also attrition modeling or churn analytics. It also analyzes the wide 'ariety of pricing schemes and options and the customer response to them. In addition, it has delin,uency analytics as well. *) P&ar!aceutical or Clinical Analytics 2linical trials depend on test and control of thousands of patients on new drugs. 2linical "rial Analytics focuses on large number of 'ariables that may or may not affect the drug response. +) "upply C&ain Analytics Supply 2hain Analytics comprises in'entory optimization, tracking turn around time, multiple reports, and how to minimize the distribution costs. ,) Transportation Analytics "ransportation Analytics, while co'ered more extensi'ely in the field of operations research, seeks at minimizing route length or fuel costs, or pricing of fares. -) .nline or %ebsite Analytics Website Analytics focuses on analyzing traffic to the website from sources, and how to retain them on the website for longer time or purchase more goods. It also in'ol'es a bit of search engine optimization to make sure the website is rele'ant in searches by search engines.

"uccess "tories ICICI $an) has been a pioneer in using analytics for cross selling in financial ser'ices in India through A"$s, Internet, -ome :oans and #eposits. It has done so by le'eraging its in'estments in data centers through "era #ata, a world leader in data storage and building an ecosystem, which uses flow of information to capture customer le'el data, and then work with its in house business intelligence unit 0analytics1 team to build models to target customers. Page - , /oogle(co! is a pioneer in analyzing the ranking or importance of a website 0text mining1 and is also a leader in online ad'ertising because of better targeting of ads. It does so by creating a mathematical formula for the importance of a website by measuring the importance of links linking to the website, location of the links through its proprietary page ranking system. It also searches websites to place rele'ant ads, thus, helping its ad'ertising business.

Careers in Analytics
$asic 0ualifications e1uired A $aster4s #egree in Statistics, /ngineering, $athematics, /conomics or in $anagement is a re,uirement for careers in analytics. /xposure to programming and ,uantitati'e sub&ects is essential for this domain. )rior knowledge of softwares like SAS, S)SS and ;.A is a definite plus. S)SS is taught in many $.A colleges as part of the curriculum.

2ob Attributes Analytics re,uires strong attention to detail, ,uantitati'e acumen, hard work, and ability to think creati'ely in terms of how to design test and control for strategy building. An ability to pick up programming language fast is a must as the large amounts of data is manipulated using softwares. e3ards & C&allenges of an Analytics Career

"3eet Pros "he rewards of being in analytics is international opportunities, rapid rises, exposure to the best softwares and top management, and a lucrati'e compensation options as it is still a niche field with terrific demand. "he opportunities in analytics careers are e'ol'ing, as domestic demand for analytics is picking up. )eople with expertise are widely respected and paid handsomely. #ue to international demand for analytics being strong, there are opportunities in trips or on site stints as well. Since most analytics decisions affect companies strategically, this career also gi'es exposure to people to interact and work closely with senior management, thus, getting chances at learning and exposure 'ery well. Page - -

"our Cons 2hallenges in this domain lie in tieing statistical knowledge with business application and programming acumen in analytics software. "he work is detail oriented and re,uires careful use of data to pre'ent costly errors or data pri'acy issues. In initial years, the role of an analyst can be ,uite similar to programming or poring o'er huge amounts of data. "he field of analytics is best suited for people with a 'ery good ,uantitati'e aptitude due to the nature of the domain. As a fresher, you can also impro'e your knowledge of statistics especially in regression, distributions and hypothesis testing to impro'e your chances of getting selected. (nowledge of the following software can be helpful in initial stages of your career in analytics7

S<: SAS 0www.sas.com1 S)SS 0www.spss.com1 .usiness *b&ects 2ognos 2rystal +eports (=/>

Career Pat&s for Analytics Professionals 2areer progression in analytics follows the broad pattern as follows7 'res&er As an entry le'el programmer or analyst, you would be re,uired to write code to generate reports, or clean data to prepare it for analysis. ?ou would also be expected to pick up nuances of business data, what data is usually wrong, what are the outliers to spot, besides learning the programming language to retrie'e and manipulate data. "his phase will last for upto two years. As you become more senior, you will also assist in recruiting and training fresher.

45perienced Analyst 3or a period of three to fi'e years of total rele'ant experience, you would then be working as a senior analyst @ assistant manager with official duties in data analysis with some people responsibilities. #epending on your aptitude and organization, you can tweak the le'el of business exposure, people management with amount of technical analysis @ skills.

Managerial oles After a period of upto fi'e years, you would be full time into client interfacing, people management, re,uirements gathering, and translation to technical details for your team. "his will also in'ol'e recruiting, mentoring &unior members and technical training.

Page - 6 7ead 8Analytics) 9 Associate :ice President 9 $usiness ;eaders ?ou can expect to be a business leader within eight to ten years of total experience. "he focus will be to grow your team size, maximize customer satisfaction, and deli'er inno'ati'e

analytics that impact business re'enue positi'ely. Corporate

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