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# “Introduction to Linear Regression with SAP HANA Studio and Automated Predictive Library (APL)”

In the world of data analysis and machine learning, Linear Regression is one of the most widely used statistical methods for modelling the relationship between a dependent variable and one or more independent variables. And with the SAP HANA Studio, creating linear regression models has become simpler with the Automated Predictive Library (APL). The APL is an integrated library of machine learning algorithms that allows for predictive analytics without requiring knowledge of programming languages such as R or Python, making it an accessible and flexible solution for businesses looking to leverage the power of machine learning to make data-driven decisions. This blog article has been published on LinkedIn, where it explores the power of linear regression and APL in SAP HANA Studio, with a focus on how they can be used to calculate and consume Key Performance Indicators (KPIs) in SAP Analytics Cloud.

Linear Regression is one of the most widely used statistical methods in the field of data analysis and machine learning. It is a type of regression analysis that is used to model the relationship between a dependent variable (also known as the response or output variable) and one or more independent variables (also known as predictors or input variables). The main goal of linear regression is to find the best-fitting line that can be used to make predictions about the dependent variable based on the values of the independent variables.

SAP HANA Studio provides a simplified way to create linear regression models using the Automated Predictive Library (APL). APL is an integrated library of machine learning algorithms and predictive models that can be used to perform predictive analytics without requiring knowledge of programming languages such as R or Python. This makes it an accessible and streamlined solution for businesses looking to leverage the power of machine learning to make data-driven decisions.

APL can be used to calculate and consume Key Performance Indicators (KPIs) in SAP Analytics Cloud. For example, a sales forecast is a common KPI that can be calculated using linear regression models in SAP HANA Studio and consumed in SAP Analytics Cloud. In this scenario, historical sales data can be used to train the linear regression model and make predictions about future sales. This information can then be used to make data-driven decisions about inventory management, marketing strategies, and resource allocation.

Stock price predictions and customer churn predictions are also common examples of KPIs that can be calculated using linear regression models. In these scenarios, the dependent variable is the stock price or customer churn rate, and the independent variables are factors such as economic indicators, industry trends, customer behaviour, and demographic information. By training a linear regression model on historical data, businesses can make predictions about future stock prices or customer churn rates, which can help inform investment decisions and customer retention strategies.

APL in SAP HANA Studio utilizes linear regression as a modelling technique, which is available through various algorithms within the Automated Predictive Library. This algorithm uses a line to model the relationship between the dependent variable and independent variables. The line is fit to the data points in such a way as to minimize the sum of the squared differences between the observed values and the predicted values. The result is a model that can be used to make predictions about the dependent variable based on the values of the independent variables.

APL offers a range of algorithms for various use cases, including linear regression, time series forecasting, classification, clustering, association rule mining, and deep learning. This makes it a flexible solution that can be adapted to a variety of business needs and requirements.

It is important to note that linear regression models are not the only method to forecast future sales or make predictions about the dependent variable. Time series forecasting, which is a type of statistical forecasting that uses time-based information to make predictions, is another popular method. However, linear regression models are commonly used when the relationship between the dependent variable and independent variables is linear. Additionally, linear regression models are easy to interpret, as the results can be represented by a simple line.

In conclusion, linear regression is a powerful and widely used statistical method that can be used to make predictions about the dependent variable based on the values of the independent variables. SAP HANA Studio provides a streamlined solution for creating linear regression models using APL, which is an integrated library of machine learning algorithms and predictive models. APL can be used to calculate and consume KPIs in SAP Analytics Cloud, making it an accessible and flexible solution for businesses looking to leverage the power of machine learning to make data-driven decisions.

Kindly share your feedback or thoughts in the comments section below.

References:

- “Linear Regression.” Wikipedia, The Free Encyclopedia, 7 Feb. 2023, en.wikipedia.org/wiki/Linear_regression.
- SAP HANA Studio, Automated Predictive Library (APL), sap.com/products/hana/platform-edition/automated-predictive-library.html.
- SAP Analytics Cloud, Key Performance Indicators (KPIs), sap.com/products/analytics-cloud/features/key-performance-indicators.html.
- “Time Series Forecasting.” Wikipedia, The Free Encyclopedia, 7 Feb. 2023, en.wikipedia.org/wiki/Time_series_forecasting.
- https://www.linkedin.com/posts/muddin48_saplearning-saphana-sapanalyticscloud-activity-7029038533528936448-s56P?utm_source=share&utm_medium=member_desktop

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Hi Muhammad,

SAP HANA Studio is being deprecated as per this response from SAP. This discussion could be made more current by considering the latest approaches described in the blog Getting Started with SAP HANA Cloud | PAL and APL.

Regards,

Mustafa.

Hi Mustafa,

why are you trying to cancel discussions about what is still possible in On-Prem-HANA ?

Not everyone is working in Cloud, or constantly jumping every 3 months between new products WEBIDE,BAS,SCP,BTP,SAC,DWC.

So today a hint about what we can do with HANA Studio or Eclipse ADT is still helpful 😉

Hi Dietmar,

You make a valid point about not constantly jumping between new products. I was certainly not trying to cancel discussions. The intent was to raise awareness that even with On-Prem-HANA, HANA Studio will ultimately be deprecated, as announced by SAP. Therefore it may be worthwhile to extend the discussion with examples of how to use the relevant new supported tools for using the APL in On-Prem-HANA 😊

Regards,

Mustafa.