Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

What do we mean by ‘Analytics’?

Kevin Gray

Cannon Gray

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Analytics, Schmanalytics

Data Analytics: Crunching the Future- BloombergBusinessweek, September 2011

How Target Figured Out A Teen Girl Was Pregnant Before Her Father Did

- Forbes, February 2012

The Plan to Rescue Sears- The Wall Street Journal, March 2012

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

James who?

“Data Scientist: The Sexiest Job of the 21st Century”

- Harvard Business Review, October 2012

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Sounds great, but what is it?

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Some Unofficial Definitions (excerpted from December 2011 LI Discussions)

“The overlay of interpretation on data that has been run through some algorithm to give meaning to that data.”

“Analytics has always been about understanding the relationship among various pieces of available data, usually in a predictive mode…[It’s] the construction of a set of mathematical models relating current data streams in a manner that will help assess the probable consequences of various potential future actions.”

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Some Unofficial Definitions (excerpted from December 2011 LI Discussions)

“I think of large data sets and analysis intended to predict rather than to understand as opposed to analysis where I think the purpose is to understand rather than to predict.”

“Crunching massive amounts of data to find patterns, frequencies and statistical significance. It's both a verb and noun. It's a step in the research process. It tells you ‘the what’. The end output helps inform decision making…”

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Some Unofficial Definitions(excerpted from December 2011 LI Discussions)

“Analytics has suffered the fate of any term that enjoys widespread popularity and usage - the meaning has been sucked out of it. Its use by people who don't really understand its origin, methods or nuances results in a kind of entropy that sees it attached to activities we never before imagined could be classified as analytics. For example:

- A query from an OLAP data cube- A graph in a New York Times article- Examining a monthly sales report- Reading your son’s report card”

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

“Advanced Analytics...”

Have you ever seen promo for software that offers “Advanced Analytics”...

...only to discover that it is little more than a package for crosstabs and graphics?

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Some Official Definitions

The method of logical analysis

- Merriam-Webster

This is a science of using mathematical techniques to understand data. It may involve using statistics and other related techniques to make inferences or obtain meaningful information from data to facilitate making decisions. It might be used as a broader term to include all areas of capturing, storing, retrieving and analyzing data.

- wiki.answers.com

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Some Official Definitions

The field of data analysis. Analytics often involves studying past historical data to research potential trends, to analyze the effects of certain decisions or events, or to evaluate the performance of a given tool or scenario. The goal of analytics is to improve the business by gaining knowledge which can be used to make improvements or changes.

- BusinessDictionary.com

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Some Official Definitions

From Wikipedia:

Analytics is the discovery and communication of meaningful patterns in data. Especially valuable in areas rich with recorded information, analytics relies on the simultaneous application of statistics, computer programming and operations research to quantify performance. Analytics often favors data visualization to communicate insight.

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Some Official Definitions

From Wikipedia (con’t):

Analytics is a two-sided coin. On one side, it uses descriptive and predictive models to gain valuable knowledge from data - data analysis. On the other, analytics uses this insight to recommend action or to guide decision making - communication. Thus, analytics is not so much concerned with individual analyses or analysis steps, but with the entire methodology.

- wikipedia.org

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Much Ado About Little?

If it’s a multi-billion dollar business it would be useful to understand what it is!

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

A Proposed Definition

Analytics is the discovery and communication of meaningful patterns in data. It makes use of information technology, statistics and mathematical algorithms to develop knowledge, to quantify performance or to make predictions. It uses the insights gained from this process to recommend action or to guide decision making. Analytics is best thought of as a methodology, not simply as isolated tools or steps in a process.

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Why This One?

Analytics is not simply one thing

It is a methodology

It employs many tools as part of a process

Analytics is easier to describe than to define concisely

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

The Analytics ProcessDefining Objectives

Data Collection

Data Preparation

Model Building

Model Evaluation

Interpretation

Scoring/Simulations

Communication

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Some Analytics Tools

When thinking of Analytics, tools are important but should not be the overriding focus

However, a few words on analytics tools will make this topic more concrete

Because of time considerations we will focus on the Modeling steps in the process

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Still Alive an’ Kickin’

Core Methods

Descriptive Statistics

Graphics

Experimental Designs

Sampling

Measures of Association

Inferential Statistics

Regression

Factor Analysis

Cluster Analysis

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Underutilized?

Specialized Methods

Conjoint

Structural Equation Modeling

Quantile Regression

Logistic Regression

Poisson Regression

Multilevel Modeling

Survival Analysis

Missing Data

Imputation

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Underutilized?

Specialized Methods

Latent Class

Growth Modeling

Latent Transition

Bayesian EstimationBayesian Networks

Social Network Analysis

Text Analytics

Monte Carlo Methods

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Forecasting, MRM, ROI

Forecasting, MRM, ROI

Smoothing Methods

ARIMA

Transfer Function Modeling

Panel ModelingVAR, VEC

Dynamic Factor Analysis

State Space Models

GARCH

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Data Mining and Predictive Analytics

Data Mining, Predictive Analytics

Trees

Nearest Neighbor Classifiers

Boosting, Bagging

Stacking, Ensembles

Association Rules

Artificial Neural Networks

Support Vector Machines

GAM

MARS

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

The Future?

Future?

Enhanced Variable Selection

Sparse (n<<p) Data Methods

Spatio-temporally Correlated Data

Bayesian Machine Learning

Improved Real-time Analytics

Enhanced Data Visualization

“War Games”

True “AI”

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Computer, On?

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

For Now…

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

To Sum Up...

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

A Proposed Definition

Analytics is the discovery and communication of meaningful patterns in data. It makes use of information technology, statistics and mathematical algorithms to develop knowledge, to quantify performance or to make predictions. It uses the insights gained from this process to recommend action or to guide decision making. Analytics is best thought of as a methodology, not simply as isolated tools or steps in a process.

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Thank you

Kevin Gray

Cannon Gray

Kevin Gray, Cannon Gray, JapanFestival of NewMR 2012 - Main Stage – Session 2

Q & A

Greg CoopsAsian Strategies

Kevin GrayCannon Gray