Business Analytics

Analytics in Business Support Functions

HR, IT, Sales & Marketing, Finance,
Operations Analytics
 Analytics in Business Support
Functions
Business analytics plays a vital role in all areas of business.
Globalisation has led to rise in competition and it has
become necessary for companies to be customer centric,
predictive and highly efficient in order to survive and grow
in the market. The developments in the field of big data
and cloud computing and the growth of social media has
pressed on the need for sophisticated analytical methods
to help in crucial decision-making process in every area of
business.
High performing firms focus on advancing their business
functions to surpass the competition. They look for
opportunities to leverage technology, digital labor,
analytics, and service delivery options to create agility.
 Human Capital/Resource Analytics
(HR Analytics)
HR analytics refers to applying analytic processes to the human
resource department of an organisation in the hope of improving
employee performance and therefore getting a better return on
investment. HR analytics does not just deal with gathering data on
employee efficiency. Instead, it aims to provide insight into each
process by gathering data and then using it to make relevant
decisions about how to improve these processes.
What HR analytics does is correlate business data and people data,
which can help establish important connections later on. The key
aspect is to provide data on the impact the HR department has on
the organisation as a whole. Establishing a relation between what
HR does and business outcomes – and then creating strategies
based on that information – is what HR analytics is all about.
HR has core functions (acquisition, optimisation, paying
and developing the workforce ) that can be enhanced
by applying processes in analytics. It can help to dig
into problems and issues surrounding these
requirements, and using analytical workflow, guide the
managers to answer questions and gain insights from
information at hand, then make relevant decisions and
take appropriate actions.
HR analytics is about analysing an organisation’s people
problems. For example, can you answer the following
questions about your organisation?
• How high is your annual employee turnover?
• How much of your employee turnover consists of regretted loss?
• Do you know which employees will be the most likely to leave your
company within a year?
You can only answer these questions when you use HR data. Most HR
profs can easily answer the first question. However, answering the
second question is harder.
To answer the second question, you’d need to combine two different
data sources. To answer the third one, you’d need to analyse your
HR data.
HR departments have long been collecting vast amounts of HR data.
Unfortunately, this data often remains unused. As soon as
organisations start to analyse their people problems by using this
data, they are engaged in HR analytics.
 Definition
HR analytics is the systematic identification and quantification of the
people drivers of business outcomes. Heuvel & Bondarouk, 2016
In other words, it is a data-driven approach towards HR.
HR analytics enables HR to:
• Make better decisions using data
• Create a business case for HR interventions
• Test the effectiveness of these interventions
• Move from an operational partner to a tactical or even strategic
partner
It goes without saying that people are vital to the success of any
company. There is no doubt that any business which can attract the
right competencies, manage talent effectively, utilise capacity
efficiently, and retain employees is setting itself up for long-term
success.
 HR Analytics every manager should
know about
Capability Analytics
The success of your business depends on the level
of expertise and skill of your workforce.
Capability Analytics is a talent management
process that allows you to identify the
capabilities or core competencies you want and
need in your business. Once you know what
those capabilities are you can compare them to
the capabilities you have in place at the moment
to see if you have any gaps.
Competency Acquisition Analytics
Talent matters, and the acquisition and management of
talent is often a critical factor in business growth.
Competency Acquisition analytics is the process of
assessing how well or otherwise your business acquires
the desired competencies. You need to start by
identifying the core competencies your business
requires now and in the future. Then assess the current
levels of those competencies within your business and
identify any gaps. You can then monitor how effective
you are at developing these competencies in-house or
spotting and recruiting candidates with those
competencies.
Capacity Analytics
Capacity affects revenue. Capacity analytics
seeks to establish how operationally efficient
people are in a business, e.g., are people
spending too much time on admin and not
enough on more profitable work, or are
individuals stretched far too thin? It also
allows businesses to establish, of how much
capacity they have to grow?
Employee Churn Analytics
Hiring employees, training them and then
integrating them into the business costs time and
money. Employee churn analytics is the process
of assessing your staff turnover rates in an
attempt to predict the future and reduce
employee churn. Historical employee churn can
be identified through traditional KPIs such as the
employee satisfaction index, Employee
engagement level and staff advocacy score.
Surveys and exit interviews are also useful tools.
Corporate Culture Analytics
Culture is notoriously difficult to pinpoint and even
harder to change. It is essentially the collective (often
unspoken) rules, systems and patterns of behavior that
embody your business. Corporate culture analytics is,
therefore, the process of assessing and understanding
more about your corporate culture or the different
cultures that exists across your organisation. This then
allows you to track changes in culture you would like to
make, understand how the culture is changing, create
early warning systems to detect toxic cultures in their
development and ensure you are recruiting people that
don’t clash with the corporate culture.
Recruitment Channel Analytics
Employees represent the greatest cost and greatest
opportunity in most businesses. Recruitment
channel analytics is the process of working out
where your best employees come from and what
recruitment channels are most effective.
Recruitment channel analytics will involve some
historical assessment of employee value using
KPIs such as human capital value added and
return per employee. Surveys and entry
interviews are also useful sources of data.
Leadership Analytics
Poor leadership, whether of a business, division or
team costs money and prevents a business from
fulfilling its potential. Leadership analytics
unpacks the various dimensions of leadership
performance via data to uncover the good, the
bad and the ugly. Data about leadership
performance can be gained through the use of
surveys, focus groups, employee interviews or
ethnography.
Employee Performance Analytics
Your business needs capable high-performing
employees to survive and thrive. Employee
performance analytics seeks to assess individual
employee performance. The resulting insights can
identify who is performing well and who may
need some additional training or support in order
to raise their game. Today, we have many
innovative ways of collecting and analysing
performance, from crowd sourced performance
assessments to big data analytics.
 IT Analytics
IT is the backbone of every business, keeping other departments up
and running. Today, IT organisations have more data than ever
before. Whether it is service ticket management, asset tracking,
budgeting, staffing, or software monitoring – that data has the
power to speed up and simplify your job. IT generates a lot of
operational data.
There’s nothing quite like managing an environment where the
concept of real-time is measured by the infinitesimally small
standards of electronics. In any one of those instants, things can go
from smooth sailing to disaster. And, always, there is data to be
moved and managed and data – lots of it – about how the data
center itself is behaving.
Into that challenging environment comes a new idea: applying new
styles of processing and analysis borrowed from the world of big
data technologies and business analytics to help decision-makers
better master the challenges of IT management.
 IT Operations Analytics
ITOA automates the process of collecting, organising, and identifying
patterns in highly distributed, diverse and fast changing service and
application data to identify problems faster and improve IT system
performance.
The digital business revolution infuses technology in every step of an
organisation’s value chain. This unprecedented use of technology
creates a complex challenge for IT infrastructure and operations
organisations, as it becomes difficult to collect and organise the
explosion of data generated by new digital business systems and
sources.
Operational analytics gives IT operations management teams the right
information, at the right time. It allows them to quickly focus their
efforts, reduce the time it takes to solve problems, proactively
identify issues and optimise system and application performance to
support business needs.
 Fast, data-driven action with ITOA
In digital business, data is the currency that guides and drives all
decisions and actions. Breaking down IT information silos and
automatically organising multi-structured data from diverse,
dynamic sources, operations analytics software solutions transform
disconnected data points, which lack meaning, into actionable
information.
IT operations analytics should be applied to the IT infrastructure and
operations environment to:
• Troubleshoot and anticipate problems in the application and service
infrastructure through analytics integrated with existing IT
operations management tools and practices.
• Optimise overall IT service performance and guide business
decisions through a single analytics platform that contextualises
data from distributed systems through the business.
 Troubleshooting and Problem
Identification
Log analytics allows you to proactively identify and detect
troublesome patterns on an ongoing basis and create
alerts and reports to take action before your users are
affected. With integrated IT analytics software you’ll
get better IT insight – right out of the box.
• Collect, index, and monitor logs and events for
abnormalities
• Perform adhoc searches of all log data across the entire
IT environment from a single console
• Correlate log data with events and service models, or
application groups
As a result, empowered ITOM teams can:
• Detect, prioritise, diagnose, and resolve
service issues more quickly than ever before
• Save successful prior resolutions and
automate notifications for the fast resolution
of common issues
• Integrate event management and log and
machine data analytics for a holistic view of
the entire data center
 Data-driven Service Optimisation
A single, architected platform for IT operations
analytics transforms web scale, real-time
streaming data, generated by the digital business,
into meaningful, actionable insights that fuel fast,
business aligned decisions for IT. To optimise
applications and IT dependent service, the
analytics platform must collect and analyse a
wide variety of data, including metric, event, log,
user experience, IT service management,
customer service and sentiment, business and
social data, and applying big data analytics in
three sequential steps:
• Data Capture and Ingestion: Real-time streaming,
transformation, storage and indexing
• Analytics and Machine Learning: Automated baselines
and abnormality detection, pattern discovery, statistics
and probability, recommendation engine
• Access and Explore: Visualise, search, correlate and
compare, trend, predict and collaborate
The reality of data ubiquity is here – data is buried in
operational statistics, machine logs, stacks of
overflowing tickets and customer details, among other
things. How can any user get valuable information
amid this rapid influx of data?
Imagine a situation where your firm’s revenue takes a hit
owing to an unexpected failure in some business process. It
would be a nightmare for IT admins to sift through the
interminable piles of data to deduce exactly why and where
the problem occurred. To save time and their sanity, they
need a solution that instantly analyses data and detects the
problem for them.
Enter IT analytics. Analytics tools unify data from different IT
functions and transform it into actionable information that
can improve process efficiencies. By providing visibility into
the performance of daily operations, an IT user can identify
problem areas and determine the next course of action.
 Examples of how Analytics helps you
build a better business strategy
• Make better staffing decisions
• Improve customer satisfaction
• Minimise business downtime
• Ensure enterprise security
• Bridge the gap between IT operations and
services
 TASK
You want people to cut down on their power consumption by
switching from air conditioners to ceiling fans. The
following is a list of reasons you could offer to them
through advertisements. Arrange these reasons in order of
their influence on most people to cut down on power
consumption.
1. Benefit to Society – share the saved power with the
deprived sections of the society
2. Save Money – Cut down on power bill
3. Follow others – Everyone is doing it and so should you.
4. Protect environment – Reduce the burden of power
generation on the environment
The above question is a part of research work carried out by Dr. Robert
Cialdini, author of International best selling book. “ Influence: the
Psychology of Persuasion”. He did a survey and asked people the
same question about what will motivate them among the above
factors to save power. The following is the result from the
telephonic survey.
“Protect environment” was ranked on the top followed by “Benefit to
society” and “Save Money”. This leaves “Follow Others” at the
bottom of the list to influence people to reduce their power
consumption. In a survey, you capture the order of responder’s
aspirations. The results, from the survey carried out by Dr. Cialdini
makes sense, since who wants to follow the herd. We are all
freethinking creatures. But, the question is whether people behave
the way they think.
To test whether people’s money is where their
mouth is, Dr. Cialdini did a set of experiments. He
placed a message on the door knobs of people’s
houses with either one of the four reasons to
save power. Then he measured the power
consumption patterns for all these people. The
results were surprising. The group that received
“Follow Others” message outperformed every
other group by a huge and significant margin for
reduced consumption of power.
The roots for the success of “Follow Others”
strategy are in evolution. From the evolutionary
standpoint, for species “Follow Others” is a far
more superior strategy for survival than any
other. Imagine a prehistoric human in a dilemma
to choose one of the two roads in front of him;
one the road well travelled and safe, and the
other with little information about it. There is
high risk on the road less travelled, and risk taking
is an aberrant behavior from evolutionary point
of view.
 Sales & Marketing Analytics
Every business will have silos of business data in its
marketing/sales department. This data has hidden
treasures. It contains information that can help target right
audience more effectively, bring in more efficiency in the
sales process, and also forecast the future of business. To
generate these insights from the large unorganised
databases, we use business analytics. These are some of
the top applications of analytics in marketing/sales:
Analytics on Consumer Behavior
Analysing consumer behavior would help us understand
when, why, how, and where people do or do not buy a
product. By understanding this, we can bring in changes to
our product and marketing strategy helping us attract more
customers.
Marketing Mix Analytics
Analysing returns on marketing expenditure across various channels would
help us evaluate the effectiveness of each of the marketing activities.
These insights will help us to reallocate resources from a less effective to a
more effective channel.
Sales Force Analytics
Analysing sales process and team will help us diagnose the barriers to sales
force performance. It will enable us bring more efficiency in sales force by
providing us insights on issues like optimum sales territory size, optimum
product bag size, the quality of leads and monthly target forecasts.
Sales Pipeline Analytics
Analysing the flow of sale through several stages would help us find any
loopholes in the sales cycle. It will help us evaluate an optimal time period
for each stage to occur so that you can make sure your customers
experience a quick and efficient transaction. It also helps determine the
capacity of your sales process.
Analytics on Communication Content
Analysing consumer behavior on the communication content helps us
observe how consumers react to our marketing material. This gives
us insights on how to draw consumer’s attention towards our
products and will enable us convey our message clearly.
Web Analytics
Web analytics helps us understand user behavior on the web and
consequently generate more leads and sales. It will provide insights
to enhance the look and layout of your web site and make it more
user-friendly. With these insights we can, also, assess and strategise
the effectiveness of marketing campaigns in order to get more
valuable cusomers.
Best Sales & Marketing Analytics every
Manager should Know
Sales and Marketing analytics are essential to unlocking commercially
relevant insights, increasing revenue and profitability, and improving
brand perception. With the help of the right analytics, you can uncover
new markets, new audience niches, areas for future development, and
much more.
The best and most important sales and marketing analytics that can help any
business grow and succeed are:
Unmet Need Analytics
Business is all about meeting the needs of customers. Unmet needs analytics
is the process of uncovering, whether there are any unmet needs around
your product or service or within your market, which you could meet to
increase customer satisfaction and revenue. Useful tools for unmet needs
analytics include product reviews, qualitative surveys, focus groups, and
interviews. You could also use tools like Google Trends to help identify
what customers are searching for.
Market Size Analytics
If you don’t understand the size and potential of your market you can easily
jump to conclusions about how viable your business proposition is. Market
size analytics is the process of working out how large the market is for
your products and services, and whether there is sufficient growth
potential. The size of the market is measured in terms of volume (how
many units sold), value (money spent in that market) or frequency (how
often a product or service is sold). Useful data includes government data,
trade association data, financial data from competitors, and customer
surveys.
Demand Forecasting
Understanding demand is essential in order to remain competitive. Demand
forecasting is an area of predictive analytics that seeks to estimate the
quantity of a product or service your consumers are likely to buy. It goes
beyond educated guesses and looks at historical sales data or current data
from test markets. Analytic techniques such as time series analysis can be
very useful here.
Market Trend Analytics
Every business needs to know the direction its market is heading in. Market trend
analytics is a process of establishing, whether a market is growing, stagnant or in
decline and how fast that movement is occurring. Understanding market size is
important, but knowing whether that market is trending up or down is also vital.
To monitor market trends you can run business experiments or scenario analysis to
see what the market would look like and how would it impact your business in
either a growing, stagnating or growth market. Customer surveys and focus groups
can also help.
Non-Customer Analytics
Traditionally we have been told that we need to understand our customers so that we
know what they look like and can find more people like them. And whilst that
makes sense there is another group tat could be even more important – the non-
customer! Non-customer analytics is about understanding what people who are
currently not your customers think about your product, services or brand. By
identifying who is not buying from you (and why), you can expand your market to
include those individuals. If you want to know why people are not buying your
product or service, you need to ask them: interviews, questionnaires, and focus
groups can help.
Competitor Analytics
Your business does not exist in a vacuum. Competitor
analytics is important for marketing and strategic planning
by identifying who your real competitors are, and how they
are positioned in the market and in relation to your
business. By understanding their strengths and
weaknesses, you can identify opportunities to exploit and
threats to navigate. There are many ways of gathering
competitor data, such as business journals and
newspapers, annual reports, product brochures and
marketing activity. You could even have an employee,
friend or family member but a product or service from your
key competitors and asses their experience.
Pricing Analytics
What if could find out exactly how much your customers
would pay for your product ahead of time? Pricing
analytics is the process that delivers that outcome. In
short, it involves analysing price sensitivity in market
segments and is especially useful in highly competitive
markets where everything that can be done, has been
done. Pricing analytics requires data mining and the
development of forecasting models and algorithms. It
also often involves multiple, concurrent business
experiments that can be run quickly and easily so you
can measure what is likely to happen with each price
change.
Marketing and Sales Channel Analytics
There are literally hundreds of possible channels and
ways to market and sell your products and services.
Marketing and sales channel analytics allows you to
assess the different channels available to you and
establish which are the most effective. It is likely you
will reach different segments of your market via
different channels, but is it still good to know which
ones are working and which are less effective. For each
of your current marketing and sales channels and any
potential as yet unused channels, you will need to set
some conversion rate goals so you know what you
want that channel to deliver.
Brand Analytics
Brands matter. Brand analytics seek to determine the
strength of your brand compared to your competitors.
Your brand is more than just your logo and your
commercial livery – it’s the look and feel of your
products and what they represent to your customers.
It’s important to really understand how customers
perceive your brand as this will impact your decision-
making and strategic direction. You can source this sort
of data anywhere your customers and potential
customers are discussing your brand, such as customer
service conversations, sales conversations, online
forums, blogs, review sites, and social media.
 Marketing Analytics
Humans involuntarily behave like other similar humans around them. We all
follow an involuntary pattern and this pattern detection is precisely the
idea behind marketing analytics. If your next door neighbor buys a new
car, you are immediately tempted to buy a new car. You may not believe
how we live our lives around these constant involuntary temptations, and
mostly succumb to them. The task for marketing analytics is to identify
groups of people similar in their attributes to learn more about them. This
method is also referred to as lookalike modeling. This helps businesses to
devise a sound marketing strategy for different groups of people based on
their needs and consumption pattern. To get a quick feel for workings of
marketing analytics, consider the following schematic. You start with the
unexplored customer portfolio and then using data mining and advanced
statistical tools try to identify hidden but interesting patterns in customers
spending behavior. Eventually, you superimpose business knowledge and
rules on top of this classified portfolio to formulate sound business and
marketing strategy for business growth.
 Marketing Analytics Modeling
Product and Promotions Optimization Models – Identify and quantify the impact of
investments, promotional activities on sales and/or brand awareness
Customer Acquisition Models – Identify and distinguish profitable customers from the
rest
Targeted Marketing Models – Target your messages to high value and ready-to-act-
customers
Multi-Channel Attribution Modeling – Understand the effectiveness of marketing
channels and assign value to customer touch points
Structural Equation Modeling – Know the varying degrees of brand attribute’s
influence on customer choice
Cross sell/Up sell Models – Improve sales by offering the right mix of products at the
right time and using the right communication channel
Propensity Models – Make true predictions about your customer’s future behavior
Pricing Models – Calculate how demand varies at different price levels and set the
prices that will improve profits
 Case Study
You have recently joined in as the Chief Analytics Officer & Business Strategy
Head at an online shopping store PUJER that specialises in Apparel and
Clothing. One day you had the Chief Marketing Officer of the company
come rushing to your office looking unusually worried. The BoD has given
him hefty targets for sales and slashed his marketing budget into half. You
immediately identify that you are dealing with a common business
problem of improving business revenue with reduced costs. You have also
realised that this is a great opportunity for you to establish analytics
practices in the company, since there is a quick opportunity for you to
improve the P & L (income statement). Additionally, the CMO informed
you that last year they had carried out marketing campaigns with different
offers on the product catalog. A direct mailing product catalog was sent to
some hundred thousand customers from the base of over a couple of
million customers last year with response rate of 4.2 percent. The direct
mailers were later followed up with SMS and email messaging.
To explain your strategy to the CMO, you drew a quick campaign P & L
statement on the whiteboard in your office. The following is a
version of your drawing.
Campaign Profit & Loss Statement
Revenue Components Cost Components
Cumulative purchases Fixed Cost for
by customers through campaign
the campaign Variable cost
Messaging cost (email/
SMS/direct mailing catalog)
∑(value generated by (mailer cost * no. of customers)
customer)i
The objective essentially is to maximise cumulative value
generated by customers while minimising total mailer
cost. You explained that the analysis will have an
impact on the variable component for the campaign,
i.e., you will reach out to the right set of customers and
generate maximum value. Additionally, there is an
intangible benefit of this exercise, i.e., reduced
customer dissatisfaction from unsolicited offers.
The CMO left you as a much less worried man than when
he entered your office. However, you know that you
had your work cut out, and you need to think of the
right approach to solve this problem. You are up for the
challenge!
Coming back to incentives and influences, you have
enough incentives to work on the above problem, since
it will establish you and your practice in the company.
Additionally, you will also influence the right people in
the company, since you will improve the income
statement of the company. The primary task while
initiating an analytics project is to clearly define the
end goals/objectives of the exercise. The projects that
influence the financials of a company go a long way.
Hence, it is a best practice to link the end
goals/objectives of your projects to the financial
influence.
 Widely used Applications of Analytics
Most industries tend to look at applying analytics in areas of:
1. Processing Social Media data for business benefits – Telecom CSPs stand
to understand the voice of the subscribers; HR will understand the
sentiments of employees and partners; hospitals discover unmet needs
of patients; IT function will understand the business user challenges and
service level expectations. Social media analytics, web analytics or digital
analytics, leveraged by product and service enterprises.
2. All product and service enterprises strive to acquire new customers
without any exception. Each one likes to customise and personalise
offers so that prospects see value and make a buying decision. One of
the most common approaches enterprises take is the recommendation
system or engine to predict the most potential buyers. Recommendation
engine, the common analytics paradigm is used to recommend books,
gift items for various occasions, doctors in a local area, household items
for online purchase – the list is endless.
 Recommendation Systems
Have you ever wondered, “what algorithm Google uses to maximise its target ads
revenue?” What about the e-commerce web sites which advocates you through
options such as “people who bought this also bought this” or “How does Facebook
automatically suggest us to tag friends in pictures?”
The answer is recommendation systems. With the growing amount of information on
the WWW and with the significant rise in the number of users, it becomes
increasingly important for companies to search, map and provide them with the
relevant chunk of information according to their preferences and tastes.
Companies are building smart and intelligent recommendation systems by studying
the past behavior of their users. Hence, providing them recommendations and
choices of their interest in terms of “Relevant Job Postings”, “Movies of Interest”,
“Suggested Videos”, “Facebook friends that you may know” and “People who
bought this also bought this”, etc.
Recommender Systems are algorithms which aim to provide the most relevant and
accurate items to the user by filtering useful stuff from a huge pool of information
base. Recommendation systems discover data patterns in the data set by learning
consumer choices and produces the outcomes that correlates to their needs and
interests.
Types of Recommendation Systems
The two types of recommendation algorithms that are also
used by most of the tech giants like Google and Facebook in
their recommender system modules.
As a typical business problem:
Consider a scenario of an e-commerce website which sells
thousands of smart phones.
With growing number of customers everyday, the task in hand
is to showcase the best choices of smart phones to the
users according to their tastes and preferences.
To understand how recommendation system works, let’s slice
the data into a sample set of five smart phones with two
major features, “Battery and Display”. The five smart
phones have following properties:
• S1 has good battery life, but poor display
• S2 has an amazing battery performance, but very
rough display
• S3 battery is one of the best, but display lacks
quality
• S4 & S5 are good in terms of display, but poor in
terms of battery performance
Using these characteristics, we can create an Item-
Feature matrix. Value in the cell represents the
rating of the smart phone feature out of 1.
 Item-Feature Matrix
Smart Phone Battery Display
S1 0.9 0.1
S2 1 0
S3 0.99 0.01
S4 0 1
S5 0.1 0.9
Our sample set also consists of four active users with their preferences.
Ajay – He prefers battery over display as an ideal smart phone feature
Barun – He likes a long lasting battery
Mrunal – For Mrunal, display should be decent, battery should be normal
Dharit – For Dharit, display is extremely important, but not the battery
Using their interests, we can create a User-Feature Matrix
User – Feature Matrix
User Battery Display
Ajay 0.9 0.1
Barun 0.8 0.2
Mrunal 0.1 0.9
Dharit 0.01 0.99
We have two matrices : Item-Feature and User-Feature.
We can create the recommendation of smart phones
for our users using following algorithms
 Content Based Recommendations
Content based systems recommend items based on a similarity comparison between
the content of the items and a users profile. The feature of items are mapped with
feature of users in order to obtain user-item similarity. The top matched pairs are
given as recommendations. Representing every user by a feature vector:
User Feature Vector
U1 Ajay [0.9 0.1]
U2 Barun [0.8 0.2]
U3 Mrunal [0.1 0.9]
U4 Dharit [0.01 0.99]
Also, every item representation as a feature vector
S1 [0.9 0.1]
S2 [1 0] and so on
Smart phones S2, S3, and S1 has the highest recommendation scores. Hence, S2, S3
and S1 are recommended to Ajay.
 Collaborative Filtering
Content based recommendation lacks in detecting inter
dependencies or complex behaviors. For example,
people might like smart phones with Good Display,
only if it has retina display and would not otherwise.
Collaborative filtering algorithm considers “User
Behavior” for recommending items. They exploit
behavior of other users and items, in terms of
transaction history ratings, selection and purchase
information. Other users behavior and preferences
over the items are used to recommend items to the
new users. In this case, features of the items are not
known. We have a similar User-Feature matrix as
content based.
 User-Feature Matrix
User Battery Display Feature Vector
Ajay 0.9 0.1 [0.9 0.1]
Barun 0.8 0.2 [0.8 0.2]
Mrunal 0.1 0.9 [0.1 0.9]
Dharit 0.3 0.7 [0.01 0.99]
This time we don’t know features of the items, but
we have user behavior, i.e., how the users
bought/rated the existing items?
 User – Behavior Matrix
Smartphone Ajay Barun Mrunal Dharit
S1 5 4.5 ? ?
S2 5 ? 0.5 ?
S3 ? 4 0.5 ?
S4 ? ? 5 4
S5 ? ? 5 4.5
Now, all the feature vectors once known, the
recommendations will be mappings of User-Feature vectors
and Item-Feature vectors. Thus, for Ajay, based on his
preferences and behaviors recommendation will be S1, S2
and S3 again. Since S1 and S2 are already rated by Ajay, so
we will recommend him a new smart phone S3.
There exist more advanced techniques like ALS: Alternating
Least Square Recommendations and Hybrid
Recommendation Engines. The Recommendation Engines
have become an important need with the growing
information space.
There are many commercial e-commerce platforms such as
Baynote, Omniture and RichRelance that have multiple
approaches to determine the most appropriate product or
service for recommendation. The common algorithms or
mechanisms supported by these platforms include rule
engine, recommendation based on social media traffic such
as Facebook, Twitter etc.
Recommendations based on reviews and ratings Adwords,
Internet search term used, syndicated recommendation
and collaborative recommendations.
Features built in the recommendation systems include item-
to-item association, many items-to-many-items association,
person-to-person association, person-to-item association
and user behavioral analytics.
 Where can Organizations start?
Organizations can start off with the basic steps of analytics such as descriptive
and diagnostic analytics, since these help to obtain a complete overview
of the organisation. They contribute toward the objective of improved
decision making.
Descriptive Analytics
Why?
Descriptive analytics helps to understand the relationship between customers
and products and the objective is to gain an understanding of what
approach to take in the future – learn from past behavior to influence
future outcomes.
What?
• It refers to a set of techniques used to describe or explore or profile any
kind of data
• Descriptive analytics answers the question, “ What happened?” It looks at
data and information to describe the current business situation in a way
that trends, patterns and exceptions become apparent
How?
• It involves standard and adhoc reporting, dashboards, queries and
alerts
• It is applicable to a broad range of situations such as analysing
customers, markets, campaigns, and even product life cycles
• It divides the data into minimal data sets or subsets of large data
sets
The next level of analytics, i.e., predictive and prescriptive analytics
predict and provide forecasts by building business rules and models
that optimise business functions.
All these elements can be amalgamated into a Center of Excellence for
Analytics that will drive the business strategies of the organisation.
 Diagnostic Analytics

Why?
• Diagnostic analytics reveals why performance was lagging in some areas and
excelled in others
• It provides patterns and clues to determine if there is a correlation between two
events
• It helps organisations understand key metrics and demonstrate the difference
between types of data that can be collected and reported
What?
Diagnostic analytics answers the question, “why did it happen?” This is the next level
of analysis where the data elements are further analysed to get to the root cause
of the problem
How?
• It provides easy to read dashboards of quantitative and qualitative format
• It gives a pattern analysis that provides a comparison and benchmark
• It gives customised insights and recommendations based on each client’s data and
business drivers
 Advanced Analytics

Why?
With increased competitiveness, business regulations and
customer fluctuations, advanced analytics provide a
significant competitive edge by moving towards real-time
decision-making in a customer centric business
What?
• Advanced analytics applies specialised technology to the
data and have a fresh perspective unlocking a whole new
dimension of thoughts and ideas
• It efficiently bundles the right set of product offerings for
customers by analysing customer needs
• It develops a marketing program and a budget that fits
projected outcomes
How?
• Proactive measures can be introduced to prevent
customers from churning out and looking for
alternatives
• It would help in identifying trends including likely
behaviors of customers, partners and competitors
• Simulation techniques help in obtaining a glimpse
into the future, which is now widely used in
decision-making
• Set up and drive CoEs (Centers of Excellence)
 Financial Analytics
What Is Financial Analytics?
Financial Analytics is a concept that provides different
views on the business’ financial data. It helps give in-
depth knowledge and take strategic actions against
them to improve your business’ overall performance.
Financial Analytics is a subset of BI & EPM and has an
impact on every aspect of your business. It plays a
crucial role in calculating your business’ profit. It helps
you answer every business question related to your
business while letting you forecast the future of your
business.
 So, Why is Financial Analytics
important?
• Today’s businesses require timely information for decision-making
purposes
• Every company needs prudent financial planning and forecasting
• The diverse needs of the traditional financial department, and
advancements in technology, all point to the need for financial
analytics.
• The emergence of new business model, the changing needs of the
traditional financial department and the advancement in
technology have all led to the need for financial analytics.
• Financial analytics can help shape up the business’ future goals. It
can help you improve the decision-making strategies for your
business.
• Financial analytics can help you focus on measuring and managing
your business’ tangible assets such as cash and equipment.
• It provides an in-depth insight into the
organization’s financial status and improves the
cash flow, profitability, and business value.
• Financial analytics will help in making smart
decisions to increase the business revenue and
minimize the waste of the business
• Accounting, tax and other areas of finance are
having data warehouse which is combined with
analytics to effectively run the business and
achieve the goals faster.
 Important Financial Analytics you
need to know
In today’s data-driven world, analytics is critical for any business that
wants to remain competitive. Financial analytics can help you
understand your business’ past and present performance and make
strategic decisions. Here are some of the critical financial analytics
that any company, size notwithstanding, should be implementing.
1. Predictive Sales Analytics
Sales revenue is critical for every business. As such, accurate sales
projection has essential strategic and technical implications for the
organization. A predictive sales analytics involves coming up with an
informed sales forecast. There are many approaches to predicting
sales, such as the use of correlation analysis or use of past trends to
forecast your sales. Predictive sales analytics can help you plan and
manage your business’ peaks and troughs.
2. Client profitability analytics
Every business needs to differentiate between clients that make them money and
clients that lose them money. Customer profitability typically falls within the 80/20
rule, where 20 percent of the clients account for 80 percent of the profits, and 20
percent of the clients account for 80 percent of customer-related expenses.
Understanding of which is vital.
By understanding your customers’ profitability, you will be able to analyze every client
group and gain useful insights. However, the greatest challenge to customer
profitability analytics comes in when you fail to analyze the client’s contribution to
the organization.
3. Product profitability analytics
For organizations to remain competitive within an industry, organizations need to
know where they are making, and losing money. Product profitability analytics can
help you establish the profitability of every product rather than analyzing the
business as a whole. To do this, you need to assess each product individually.
Product profitability analytics can also help you establish profitability insights
across the product range so you can make better decisions and protect your profit
and growth over time.
4. Cash flow analytics
You need a certain amount of cash to run the organization on a day-to-day
basis. Cash flow is the lifeblood of your business. Understanding cash
flow is crucial for gauging the health of the business. Cash flow
analytics involves the use of real-time indicators like the Working Capital
Ratio and Cash Conversion Cycle. You can also predict cash flow using tools
like regression analysis. Besides helping with cash flow management and
ensuring that you have enough money for day-to-day operations, cash
flow analytics can also help you support a range of business functions.
5. Value-driven analytics
Most organizations have a sense of where they are going to and what they
are hoping to achieve. These goals can be formal and listed on a strategy
map that pinpoints the business’ value drivers. These value drivers are the
vital drivers that the organization needs to pull to realize its strategic
goals. Value driver analytics assesses these levers to ensure that they can
deliver the expected outcome.
6. Shareholder value analytics
The profits and losses, and their interpretation by
analysts, investors, and the media can influence your
business’ performance on the stock market.
Shareholder value analytics calculates the value of the
company by looking at the returns it is providing to
shareholders. In other words, it measures the financial
repercussions of a strategy and reports how much
value the strategy in question is delivering to the
shareholders. Shareholder value analytics is used
concurrently with profit and revenue analytics. You can
use tools like Economic Value Added (EVA) to measure
the shareholder value analytics.
 Reasons for Financial Analytics
Gaining Importance
There are four main reasons why financial analytics is becoming more
important these days. They are:
• Business Models
There are three new business models which form the basis of financial
analytics
Business to Business
Business to Consumer
Business to Employee
• Changing role of the Finance department
Most of the finance functions are automatic and require only a few
resources to manage them. This enables the finance executives to
concentrate more on the business goals rather than just focusing on
processing and reconciling transactions.
• Business Processes
Businesses have become complex these days due to
the advancement of technologies. Lot of
questions arise in the mind of the business
people. Analytics provide the answers to all these
questions. Financial analytics lets the managers
and executives in an organization to have access
to more accurate and detailed financial
information of the organization. This strengthens
the relationship of the employee inside the
organization.
 Here are a few questions for which
financial analytics can give you an
answer
• What are the risks to which the business is exposed?
• How to enhance and extend the business processes to
make them work more effectively?
• Are the investments made in the right path?
• How is the profit of the product across different sales
channels and customers?
• Which segment of the market is expected to bring
more profit to the business in the future?
• What are the factors that could affect the business in
the future?
• Integrated Analytics
These days companies use integrated financial analytics to face the
competition in the financial analytics market place. Because of
using such integrated financial analytics companies will be able to
analyze and share the information with the sources inside and
outside the organization. Organizations should use integrated
financial analytics to survive in the new economy.
• Role of the Data Warehouse
The data warehousing solutions mainly focus on important analytical
components like data stores, data marts and reporting applications.
Data warehousing in the future will require rich analytical
capabilities. Smart decisions are easily made when the data and
business processes are integrated across all business functions in an
organization.
 Uses of Financial Analytics

Financial analytics helps a business to

• Understand the performance of an organization
• Measure and manage the value of tangible
and intangible assets of an organization
• Manage the investments of the company
• Forecast the variations in the market
• Increase the functionalities of information
systems
• Improve the business processes and profits
 Oracle Financial Analytics Software

One example of financial analytics software is Oracle. Oracle is

one of the popular financial analytics software programs in
the market.
Oracle Financial Analytics helps to improve the financial
performance through proper information about the
expenses and revenue of all the departments in the
organization. It increases the cash flow through proper
maintenance of receivables, payables and inventory
management. It gives you timely financial reports which
will help you to determine the performance of your
business. It also helps you to have a future forecast and
plan your budget well. Oracle Financial Analytics software
will help to improve the financial health of the business.
 Features

This software has a lot of features that includes the following

• Fixed Assets Analytics – Manages and measures the assets life
cycle
• Budgetary Control Analytics – It helps in preventing over spending
through effective monitoring of the budget and spending effectively
• General Ledger Analytics – Manage the financial performance of
the company through various factors
• Profitability Analytics – Helps in identifying what type of customers
and which channels drive more profit to the company
• Payables Analytics – Manage and monitor the cash of the payables
department
• Receivables Analytics – Manage collections and have a check on
the cash cycles
• Proactive Intelligence – This feature can send a signal about the
issue to the managers and executives of the organization which
helps them to take immediate action and solve the issue
• Pre-built data models and metrics – Oracle Financial Analytics has
more than 100 metrics and models
• Out-of-the-box integration with ERP systems – It helps easy
integration with ERP systems at a less risk, low cost and lesser effort
• Oracle Financial Analytics for Oracle Fusion Applications – It helps
you to learn about the company’s past, present and future
performance and will let you take smart decisions.
• Powered by Oracle Business Intelligence Foundation – Produces
high quality reports and has a good dashboard and is highly scalable
• Exalytics Ready – It goes beyond the values of traditional data
analytics and gives deeper knowledge about the huge volume of
data at the speed of thought
Documents used in Financial Analysis

Finance is the language of a business. The goals of a business are always

defined in terms of finance and the output is also measured in financial
terms. Financial analytics involves analyzing the data involved in financial
statements. By this way it provides useful information to the business
owners and let them make better decisions.
There are three main financial statements on which the analysis is done
• Balance Sheet
Balance sheet gives a outline about the financial items and assets that a
company possesses. It is helpful in understanding the current financial
position of a company. Balance sheet just lists the resources of the
company and it does not tell you how these resources are managed and
how it can be used in the future to improve the business performance.
There are two main parts of the balance sheet – Assets and Liabilities. Assets
are divided into current assets and Non-current assets. Liabilities are
further divided into Current Liabilities and Long term debts.
• Income Statement
Income statement reveals the company’s performance over a particular
period of time. The main elements of the income statement are revenues
earned, expenses incurred and net profit and loss. It does not reveal the
current financial position of the company but it lets you know about the
future possibilities. Net Income is the result obtained through Income
Statement. The Income Statement will let you know how far the
company’s goals are achieved.
• Cash Flow Statement
Cash Flow statement is more similar to Income Statement. It keeps a record
of the company’s performance. Income statement takes only cash items
but Cash Flow Statement takes non-cash items such as depreciation into
account. This shows the actual inflow and outflow of cash in the company.
This provides a clear picture of the company’s bills to pay, debts and
financial growth over a period of time.
 Elements of Financial Health

The overall financial health of a company can be assessed using three main
elements – liquidity, leverage and profitability. All these are internal
factors that work within the company and are beyond the control of
management
• Liquidity
The term Liquidity in business means the availability of cash and other assets
to pay its debts, bills and other expenses. Every business requires a
particular amount of liquidity to meet out their expenses and bills. Low
level of liquidity in companies means that the business is in need of extra
capital and the performance is poor.
The liquidity level of the company differs from period to period because of
certain factors like sales, economy and seasons. At the same time the cash
flow inside the company will not be the same throughout the year. But
whatever the situation is, the company need to pay for their employees
and creditors. This makes a change in their liquidity level.
• Leverage
Leverage refers to the amount of finance which a company has borrowed
from outside to run its operations as against its investment. Leverage is an
important factor which is considered mainly by bankers and investors. A
company will have a high leverage ratio when the debt of the company is
high when compared to its equity. A high leverage ratio means that the
company is exposed to risks but on the other hand higher exposure to risk
also increases the returns for the business.
• Profitability
Profitability refers to the return that the business earns from the amount
invested in the business. Many people are starting their own business
these days to earn profits as the investment made in any other means will
give less returns when compared to the business. There are many factors
that affect the profitability of the business like price, market trends,
assets, debts, expenses and many others.
 Financial Ratios

There are also a few ratios which will help in the overall financial analysis. Financial
ratios are easy to calculate and simple to use. These ratios will tell where there
need to be an improvement in the business. Financial ratios are calculated by
dividing one number by another and are usually expressed in terms of percentage.
These financial ratios are used to compare any financial statistics in a business and
help you to decide where there is need for betterment. Selecting the ratios for the
business depends on certain factors like the type of business, years of business
and others. The ratios are listed below
• Current Ratio – Exhibits the ability of a company to pay its near term obligations
• Quick Ratio – Explains the company’s ability to pay its current liabilities
• Liquidity Ratio – This calculates the liquidity of the company by taking everything
into consideration except cash
• Debt or Equity Ratio – This indicates the ratio of the company’s investor vs.
supplied capital
• Return on Equity Ratio – This measures the company’s level of profitability
 Conclusion

The conclusion is Financial Analytics is an

important tool that should be used by small as
well as large business owners to manage and
measure the progress of the business. It will
help the business to adapt to the trends
affecting their operations. Financial analytics
will provide more reliable and timely financial
reports which is the main factor for measuring
the success of a company from the
perspective of bankers, investors and analysts.
 Operational Analytics

The proliferation of streaming analytics and instant decisions to power dynamic

applications, as well as the rise of predictive analytics, machine learning, and
operationalized artificial intelligence, have introduced a requirement for a new
type of database workload: operational analytics.
The two worlds of transactions and analytics, set apart from each other, are a relic of a
time before data became an organization’s most valuable asset. Operational
analytics is a new set of database requirements and system demands that are
integral to achieving competitive advantage for the modern enterprise.
This new approach was called for by Gartner as a Top 10 technology for 2019, under
the name “continuous analytics.” Delivering operational analytics at scale is the
key to real-time dashboards, predictive analytics, machine learning, and enhanced
customer experiences which differentiate digital transformation leaders from the
followers.
However, companies are struggling to build these new solutions because existing
legacy database architectures cannot meet the demands placed on them. The
existing data infrastructure cannot scale to the load put on it, and it doesn’t
natively handle all the new sources of data.
The separation of technologies between the transactional and analytic
technologies results in hard tradeoffs that leave solutions lacking in
operational capability, analytics performance, or both. There have been
many attempts in the NoSQL space to bridge the gap, but all have fallen
short of meeting the needs of this new workload.
Operational analytics enables businesses to leverage data to enhance
productivity, expand customer and partner engagement, and support
orders of magnitude more simultaneous users. But these requirements
demand a new breed of database software that goes beyond the legacy
architecture.
The industry calls these systems by several names: hybrid transaction and
analytics processing (HTAP) from Gartner; hybrid operational/analytics
processing (HOAP) from 451 Research; and translytical from Forrester.
Consulting firms typically use the term we have chosen here, operational
analytics, and CapGemini has even established a full operational analytics
consultancy practice around it.
 The Emergence of Operational
Analytics
Operational Analytics has emerged alongside the existing workloads of Online
Transaction Processing (OLTP) and Online Analytical Processing (OLAP).
To summarize, OLTP requires data lookups, transactionality, availability,
reliability, and scalability. Whereas OLAP requires support for running
complex queries very fast, large data sets, and batch ingest of large
amounts of data. The OLTP and OLAP based systems served us well for a
long time. But over the last few years things have changed.
Decisions should not have to wait for the data
It is no longer acceptable to wait for the next quarter, or week, or even day to
get the data needed to make a business decision. Companies are
increasingly online all the time; “down for maintenance” and “business
hours” are quickly becoming things of the past. Companies that have a
streaming real-time data flow have a significant edge over their
competitors. Existing legacy analytics systems were simply not designed to
work like this.
Companies must become insight driven
This means that, instead of a handful of analysts querying the data,
you have hundreds or thousands of employees hammering your
analytics systems every day in order to make informed decisions
about the business. In addition, there will be automated systems –
ML/AI and others – also running queries to get the current state of
the world to feed their algorithms. The existing legacy analytics
systems were simply not designed for this kind of usage.
Companies must act on insights to improve Customer Experience
Companies want to expose their data to their customers and partners.
This improves the customer experience and potentially adds net
new capabilities. For example, a cable company tracks users as they
try to set up their cable modems so they can proactively reach out
if they see there is a problem. This requires a system that can
analyze and react in real time.
Another example is an electronics company that sells
smart TVs and wants to expose which shows customers
are watching to its advertisers. This dramatically
increases the number of users trying to access its
analytics systems.
In addition, the expectations of availability and reliability
are much higher for customers and partners. So you
need a system that can deliver an operational service
level agreement (SLA). Since your partners don’t work
in your company, it means you are exposing the
content outside the corporate firewall, so strong
security is a must. The existing legacy analytics systems
were simply not designed for this kind of usage.
Data is coming from many new sources and in many types and
formats
The amount of data being collected is growing tremendously. Not only
is it being collected from operational systems within the company;
data is also coming from edge devices. The explosion of IoT devices,
such as oil drills, smart meters, household appliances, factory
machinery, etc., are the key contributors to the growth.
All this data needs to be fed into the analytics system. This leads to an
increased complexity in the types of data sources (such as Kafka,
Spark, etc…) as well as data types and formats (geospatial, JSON,
AVRO, Parquet, raw text, etc.) and throughput requirements for
ingest of the data. Again, the existing legacy analytics systems were
simply not designed for this kind of usage.
 The Rise of Operational Analytics

These changes have given rise to a new database workload,

operational analytics. The short description of operational
analytics is an analytical workload that needs an
operational SLA. Now let’s unpack what that looks like.
Operational Analytics as a Database Workload
Operational Analytics primarily describes analytical
workloads. So the query shapes and complexity are similar
to OLAP queries. In addition, the data sets for operational
analytics are just as large as OLAP data sets, although often
it is the most recent data that is more important. (This is
usually a fraction of the total data set.) Data loading is
similar to OLAP workloads, in that data comes from an
external source and is loaded independent of the
applications or dashboards that are running the queries.
But this is where the similarities end. Operational analytics has several
characteristics that set it apart from pure OLAP workloads.
Specifically, the speed of data ingestion, scaling for concurrency,
availability and reliability, and speed of query response.
Operational analytics workloads require an SLA on how fast the data
needs to be available. Sometimes, this is measured in seconds or
minutes, which means the data infrastructure must allow streaming
the data in constantly, while still allowing queries to be run.
Sometimes, this means there’s a window of time (usually a single-digit
number of hours) during which all the data must be ingested. As
data sets grow, the existing data warehouse (DW) technologies have
had trouble loading the data within the time window (and certainly
don’t allow streaming). Data Engineers often have to do complex
tricks to continue meeting data loading SLAs with existing DW
technologies.
Data also has to be loaded from a larger set of data sources than in the past. It used to
be that data was batch-loaded from an operational system during non-business
hours. Now data comes in from many different systems.
In addition, data can flow from various IoT devices far afield from the company data
center. The data gets routed through various types of technologies (in-memory
queues like Kafka, processing engines like Spark, etc.). Operational analytics
workloads need to easily handle ingesting from these disparate data sources.
Operational analytics workloads also need to scale to a large number of concurrent
queries. With the drive towards being data driven and exposing data to customers
and partners, the number of concurrent users (also queries) in the system has
increased dramatically. In an OLAP workload, five to ten queries at a time was the
norm. Operational analytics workloads often must be able to handle tens,
hundreds, or even thousands of concurrent queries.
As in an OLTP workload, availability and reliability are also key requirements. Because
these systems are now exposed to customers or partners, the SLA required is a lot
stricter than for internal employees.
Customers expect a 99.9% or better uptime and they expect the system to behave
reliably. They are also less tolerant of planned maintenance windows. So the data
infrastructure backing these systems, need to have support for high availability,
with the ability to handle hardware and other types of failure.
Maintenance operations (such as upgrading the system software or rebalancing data)
need to become transparent, online operations that are not noticeable to the
users of the system. In addition, the system should self-heal when a problem
occurs, rather than waiting for an operator to get alerted to an issue and respond.
Strong durability is important as well. This is because even though data that is lost
could be reloaded, the reloading may cause the system to break the availability
SLA.
The ability to retrieve the data you are looking for very quickly is the hallmark feature
of database systems. Getting access to the right data quickly is a huge competitive
advantage. Whether it is internal users trying to get insights into the business, or
you are presenting analytics results to a customer, the expectation is that the data
they need is available instantly.
The speed of the query needs to be maintained
regardless of the load on the system. It doesn’t matter
if there is a peak number of users online, the data size
has expanded, or there are failures in the system.
Customers expect you to meet their expectations on
every query with no excuses.
This requires a solid distributed query processor that can
pick the right plan to answer any query and get it right
every time. It means the algorithms used must scale
smoothly with the system as it grows in every
dimension.
Supporting Operational Analytics Use
Cases with MemSQL
MemSQL was built to address these requirements in a single converged
system. MemSQL is a distributed relational database that supports ANSI
SQL. It has a shared-nothing, scale-out architecture that runs well on
industry standard hardware.
This allows MemSQL to scale in a linear fashion simply by adding machines to
a cluster. MemSQL supports all the analytical SQL language features you
would find in a standard OLAP system, such as joins, group by, aggregates,
etc.
It has its own extensibility mechanism so you can add stored procedures and
functions to meet your application requirements. MemSQL also supports
the key features of an OLTP system: transactions, high availability, self-
healing, online operations, and robust security.
It has two storage subsystems: an on-disk column store that gives you the
advantage of compression and extremely fast aggregate queries, as well as
an in-memory row store that supports fast point queries, aggregates,
indices, and more. The two table types can be mixed in one database to
get the optimal design for your workload.
Finally, MemSQL has a native data ingestion feature, called Pipelines,
that allows you to easily and very quickly ingest data from a variety
of data sources (such as Kafka, AWS S3, Azure Blob, and HDFS). All
these capabilities offered in a single integrated system add up to
making it the best data infrastructure for an operational analytics
workload, bar none.
Describing the workload in general terms is a bit abstract, so let’s dig
into some of the specific use cases.
Portfolio Analytics
One of the most common use cases we see in financial services
is portfolio analytics. Multiple MemSQL customers have written
financial portfolio management and analysis systems that are
designed to provide premium services to elite users.
These elite users can be private banking customers with high net worth or fund
managers who control a large number of assets. They will have large portfolios
with hundreds or thousands of positions. They want to be able to analyze their
portfolio in real-time, with graphical displays that are refreshed instantaneously as
they filter, sort, or change views in the application. The superb performance of
MemSQL allows sub-second refresh of the entire screen with real-time data,
including multiple tables and charts, even for large portfolios.
These systems also need to scale to hundreds or thousands of users concurrently
hitting the system, especially when the market is volatile. Lastly, they need to bring
in the freshest market data, without compromising the ability to deliver the strict
latency SLAs for their query response times.
They need to do all of this securely, without violating, relevant compliance
requirements nor the trust of their users. High availability and reliability are key
requirements, because the market won’t wait. MemSQL is the ideal data
infrastructure for this operational analytics use case as it solves the key
requirements of fast data ingest, high scale concurrent user access, and fast query
response.
Predictive Maintenance
Another common use case we see is predictive maintenance. Customers who
have services or devices that are running continuously want to know as
quickly as possible if there is a problem.
This is a common scenario for media companies that do streaming video.
They want to know if there is a problem with the quality of the streaming
so they can fix it, ideally before the user notices the degradation.
This use case also comes up in the energy industry. Energy companies have
devices (such as oil drills, wind turbines, etc.) in remote locations. Tracking
the health of those devices and making adjustments can extend their
lifetime and save millions of dollars in labor and equipment to replace
them.
The key requirements are the ability to stream the data about the device or
service, analyze the data – often using a form of ML that leverages
complex queries – and then send an alert if the results show any issues
that need to be addressed. The data infrastructure needs to be online
24/7 to ensure there is no delay in identifying these issues.
Personalization
A third use case is personalization. Personalization is about customizing the experience
for a customer. This use case pops in a number of different verticals, such as a user
visiting a retail web site, playing a game in an online arcade, or even visiting a brick
and mortar store.
The ability to see a user’s activity and, more importantly, learn what is attractive to
them, gives you the information to meet their needs more effectively and
efficiently. One of MemSQL’s customers is a gaming company. They stream
information about the user’s activity in the games, process the results against a
model in MemSQL, and use the results to offer the user discounts for new games
and other in-app purchases.
Another example is a popular music delivery service that uses MemSQL to analyze
usage of the service to optimize ad spend. The size of data and the number of
employees using the system made it challenging to deliver the data in a timely way
to the organization and allow them to query the data interactively. MemSQL
significantly improved their ability to ingest and process the data and allowed their
users to get a dramatic speedup in their query response times.
 Summary

Operational analytics is a new workload that encompasses the

operational requirements of an OLTP workload – data
lookups, transactionality, availability, reliability, and
scalability – as well as the analytical requirements of an
OLAP workload – large data sets and fast queries.
Coupled with the new requirements of high user concurrency
and fast ingestion, the operational analytics workload is
tough to support with a legacy database architecture or by
cobbling together a series of disparate tools. As businesses
continue along their digital transformation journey they are
finding more and more of their workloads fit this pattern
and are searching for new modern data infrastructure, like
MemSQL, that has the performance and scale capabilities
to handle them.