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Overview of Data Analysis

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25 views

Overview of Data Analysis

Uploaded by

noor1henchiri
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Overview of data analysis

Completed100 XP
 6 minutes

Before data can be used to tell a story, it must be run through a process
that makes it usable in the story. Data analysis is the process of
identifying, cleaning, transforming, and modeling data to discover
meaningful and useful information. The data is then crafted into a story
through reports for analysis to support the critical decision-making
process.

As the world becomes more data-driven, storytelling through data analysis


is becoming a vital component and aspect of large and small businesses. It
is the reason that organizations continue to hire data analysts.

Data-driven businesses make decisions based on the story that their data
tells, and in today's data-driven world, data is not being used to its full
potential, a challenge that most businesses face. Data analysis is, and
should be, a critical aspect of all organizations to help determine the
impact to their business, including evaluating customer sentiment,
performing market and product research, and identifying trends or other
data insights.

While the process of data analysis focuses on the tasks of cleaning,


modeling, and visualizing data, the concept of data analysis and its
importance to business should not be understated. To analyze data, core
components of analytics are divided into the following categories:

 Descriptive
 Diagnostic
 Predictive
 Prescriptive
 Cognitive

Descriptive analytics
Descriptive analytics help answer questions about what has happened
based on historical data. Descriptive analytics techniques summarize large
datasets to describe outcomes to stakeholders.

By developing key performance indicators (KPIs), these strategies can help


track the success or failure of key objectives. Metrics such as return on
investment (ROI) are used in many industries, and specialized metrics are
developed to track performance in specific industries.

An example of descriptive analytics is generating reports to provide a view


of an organization's sales and financial data.

Diagnostic analytics
Diagnostic analytics help answer questions about why events happened.
Diagnostic analytics techniques supplement basic descriptive analytics,
and they use the findings from descriptive analytics to discover the cause
of these events. Then, performance indicators are further investigated to
discover why these events improved or became worse. Generally, this
process occurs in three steps:

1. Identify anomalies in the data. These anomalies might be unexpected


changes in a metric or a particular market.
2. Collect data that's related to these anomalies.
3. Use statistical techniques to discover relationships and trends that
explain these anomalies.

Predictive analytics
Predictive analytics help answer questions about what will happen in the
future. Predictive analytics techniques use historical data to identify trends
and determine if they're likely to recur. Predictive analytical tools provide
valuable insight into what might happen in the future. Techniques include
a variety of statistical and machine learning techniques such as neural
networks, decision trees, and regression.

Prescriptive analytics
Prescriptive analytics help answer questions about which actions should
be taken to achieve a goal or target. By using insights from prescriptive
analytics, organizations can make data-driven decisions. This technique
allows businesses to make informed decisions in the face of uncertainty.
Prescriptive analytics techniques rely on machine learning as one of the
strategies to find patterns in large datasets. By analyzing past decisions
and events, organizations can estimate the likelihood of different
outcomes.

Cognitive analytics
Cognitive analytics attempt to draw inferences from existing data and
patterns, derive conclusions based on existing knowledge bases, and then
add these findings back into the knowledge base for future inferences, a
self-learning feedback loop. Cognitive analytics help you learn what might
happen if circumstances change and determine how you might handle
these situations.

Inferences aren't structured queries based on a rules database; rather,


they're unstructured hypotheses that are gathered from several sources
and expressed with varying degrees of confidence. Effective cognitive
analytics depend on machine learning algorithms, and will use several
natural language processing concepts to make sense of previously
untapped data sources, such as call center conversation logs and product
reviews.

Example

By enabling reporting and data visualizations, a retail business uses


descriptive analytics to look at patterns of purchases from previous years
to determine what products might be popular next year. The company
might also look at supporting data to understand why a particular product
was popular and if that trend is continuing, which will help them determine
whether to continue stocking that product.

A business might determine that a certain product was popular over a


specific timeframe. Then, they can use this analysis to determine whether
certain marketing efforts or online social activities contributed to the sales
increase.

An underlying facet of data analysis is that a business needs to trust its


data. As a practice, the data analysis process will capture data from
trusted sources and shape it into something that is consumable,
meaningful, and easily understood to help with the decision-making
process. Data analysis enables businesses to fully understand their data
through data-driven processes and decisions, allowing them to be
confident in their decisions.

As the amount of data grows, so does the need for data analysts. A data
analyst knows how to organize information and distill it into something
relevant and comprehensible. A data analyst knows how to gather the
right data and what to do with it, in other words, making sense of the data
in your data overload.

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