DATA ANALYSIS

COE 106
 What is data analysis?
◦ Data analysis is a process of inspecting, cleansing, transforming,
and modelling data with the goal of discovering useful information,
informing conclusions, and supporting decision-making. Data analysis
has multiple facets and approaches, encompassing diverse techniques
under a variety of names, and is used in different business, science, and
social science domains. In today's business world, data analysis plays a
role in making decisions more scientific and helping businesses operate
more effectively.
◦Data analysis is the process of collecting,
modeling, and analyzing data to extract
insights that support decision-making.
There are several methods and techniques
to perform analysis depending on the
industry and the aim of the investigation.
 Why Is Data Analysis Important?

◦ Data analysis is important in business to understand

problems facing an organization, and to explore
data in meaningful ways. Data in itself is merely facts
and figures. Data analysis organizes, interprets,
structures and presents the data into useful
information that provides context for the data.
 Why Is Data Analysis Important?

◦Informed decision-making: From a management perspective,

you can benefit from analyzing your data as it helps you make
decisions based on facts and not simple intuition. For instance,
you can understand where to invest your capital, detect growth
opportunities, predict your incomes, or tackle uncommon
situations before they become problems.
 Why Is Data Analysis Important?

◦Reduce costs: Another great benefit is to reduce

costs. With the help of advanced technologies
such as predictive analytics, businesses can spot
improvement opportunities, trends, and patterns
in their data and plan their strategies accordingly.
 Why Is Data Analysis Important?

◦Target customers better: Customers are arguably the

most crucial element in any business. By using analytics
to get a 360° vision of all aspects related to your
customers, you can understand which channels they use to
communicate with you, their demographics, interests,
habits, purchasing behaviors, and more.
 WHAT IS THE DATA
ANALYSIS PROCESS?
◦The analysis process consists of 5 key stages. We
will cover each of them more in detail later in the
post, but to start providing the needed context to
understand what is coming next, here is a rundown
of the 5 essential steps of data analysis. 
◦Identify: Before you get your hands dirty with
data, you first need to identify why do you need
it in the first place. The identification is the
stage in which you establish the questions you
will need to answer.
◦ Collect: As its name suggests, this is the stage where you
start collecting the needed data. Here, you define which
sources of information you will use and how you will use
them. The collection of data can come in different forms
such as internal or external sources, surveys, interviews,
questionnaires, focus groups, among others. 
◦Clean: Once you have the necessary data it is time to
clean it and leave it ready for analysis. Not all the
data you collect will be useful, when collecting big
amounts of information in different formats it is very
likely that you will find yourself with duplicate or
badly formatted data.
◦ Analyze: With the help of various techniques such as
statistical analysis, regressions, neural networks, text
analysis, and more, you can start analyzing and manipulating
your data to extract relevant conclusions. At this stage, you
find trends, correlations, variations, and patterns that can help
you answer the questions you first thought of in the identify
stage.
◦Interpret: Last but not least you have one of the most
important steps: it is time to interpret your results.
This stage is where the researcher comes up with
courses of action based on the findings. For example,
here you would understand if your clients prefer
packaging that is red or green, plastic or paper, etc.
10 ESSENTIAL TYPES OF
DATA ANALYSIS
METHOD
◦Before diving into the seven essential types of
methods, it is important that we go over really fast
through the main analysis categories. Starting with
the category of descriptive up to prescriptive
analysis, the complexity and effort of data evaluation
increases, but also the added value for the company.
 Descriptive analysis - What happened.

◦The descriptive analysis method is the starting point to any

analytic reflection, and it aims to answer the question of
what happened? It does this by ordering, manipulating,
and interpreting raw data from various sources to turn it
into valuable insights for your organization.
 Exploratory analysis - How to explore
data relationships.
◦As its name suggests, the main aim of the exploratory analysis
is to explore. Prior to it, there was still no notion of the
relationship between the data and the variables. Once the data
is investigated, the exploratory analysis enables you to find
connections and generate hypotheses and solutions for specific
problems. A typical area of ​application for it is data mining.
 Prescriptive analysis - How will it happen.

◦Another of the most effective types of analysis

methods in research. Prescriptive data techniques
cross over from predictive analysis in the way that it
revolves around using patterns or trends to develop
responsive, practical business strategies.
 Cluster analysis
◦ The action of grouping a set of data elements in a way that
said elements are more similar (in a particular sense) to each
other than to those in other groups – hence the term ‘cluster.’
Since there is no target variable when clustering, the method is
often used to find hidden patterns in the data. The approach is
also used to provide additional context to a trend or dataset.
 Cohort analysis
◦ This type of data analysis method uses historical data to
examine and compare a determined segment of users'
behavior, which can then be grouped with others with
similar characteristics. By using this methodology, it's
possible to gain a wealth of insight into consumer needs
or a firm understanding of a broader target group.
 Regression analysis
◦Regression uses historical data to understand how a dependent
variable's value is affected when one (linear regression) or more
independent variables (multiple regression) change or stay the
same. By understanding each variable's relationship and how
they developed in the past, you can anticipate possible
outcomes and make better decisions in the future.
 Neural networks
◦ The neural network forms the basis for the intelligent
algorithms of machine learning. It is a form of analytics that
attempts, with minimal intervention, to understand how the
human brain would generate insights and predict values.
Neural networks learn from each and every data transaction,
meaning that they evolve and advance over time.
 Factor analysis
◦The factor analysis also called “dimension reduction” is a
type of data analysis used to describe variability among
observed, correlated variables in terms of a potentially
lower number of unobserved variables called factors. The
aim here is to uncover independent latent variables, an
ideal method for streamlining specific segments.
 Data mining
◦ A method of data analysis that is the umbrella term for engineering
metrics and insights for additional value, direction, and context.
By using exploratory statistical evaluation, data mining aims to
identify dependencies, relations, patterns, and trends to generate
advanced knowledge.  When considering how to analyze data,
adopting a data mining mindset is essential to success - as such,
it’s an area that is worth exploring in greater detail.
 Text analysis
◦Text analysis, also known in the industry as text mining, works
by taking large sets of textual data and arranging it in a way
that makes it easier to manage. By working through this
cleansing process in stringent detail, you will be able to extract
the data that is truly relevant to your organization and use it to
develop actionable insights that will propel you forward.
 Time series analysis
◦ As its name suggests, the time series analysis is used to analyze a set of
data points collected over a specified period of time. Although analysts use
this method to monitor the data points in a specific interval of time rather
than just monitoring them intermittently, the time series analysis is not
uniquely used with the purpose of collecting data over time. Instead, it
allows researchers to understand if variables changed during the duration
of the study, how the different variables are dependent, and how did it
reach the end result.
 Decision Trees 
◦ The decision tree analysis aims to act as a support tool to make smart and
strategic decisions. By visually displaying potential outcomes,
consequences, and costs in a tree-like model, researchers and business
users can easily evaluate all factors involved and choose the best course
of action. Decision trees are helpful to analyze quantitative data and they
allow for an improved decision-making process by helping you spot
improvement opportunities, reduce costs, enhance operational efficiency
and production.
 Conjoint analysis 
◦ Last but not least, we have the conjoint analysis. This approach is
usually used in surveys to understand how individuals value different
attributes of a product or service and it is one of the most effective
methods to extract consumer preferences. When it comes to
purchasing, some clients might be more price-focused, others more
features-focused, others might have a sustainable focus, whatever your
customer's preferences are, you can find them with conjoint analysis.
17 DATA ANALYSIS
TECHNIQUES
 Collaborate your needs
◦Before you begin analyzing or drilling down into any
techniques, it’s crucial to sit down collaboratively with all key
stakeholders within your organization, decide on your primary
campaign or strategic goals, and gain a fundamental
understanding of the types of insights that will best benefit your
progress or provide you with the level of vision you need to
evolve your organization.
 Establish your questions
◦Once you’ve outlined your core objectives, you
should consider which questions will need
answering to help you achieve your mission.
This is one of the most important techniques as it
will shape the very foundations of your success.
 Data democratization
◦Once you’ve outlined your core objectives, you
should consider which questions will need
answering to help you achieve your mission.
This is one of the most important techniques as it
will shape the very foundations of your success.
 Think of governance 
◦When collecting data in a business or research context
you always need to think about security and privacy.
With data breaches becoming a topic of concern for
businesses, the need to protect your client's or
subject’s sensitive information becomes critical. 
 Clean your data
◦After harvesting from so many sources you will be left with a
vast amount of information that can be overwhelming to deal
with. At the same time, you can be faced with incorrect data that
can be misleading to your analysis. The smartest thing you can
do to avoid dealing with this in the future is to clean the data.
This is fundamental before visualizing it, as it will ensure that the
insights you extract from it are correct.
 Set your KPIs
◦Once you’ve set your sources, cleaned your data, and
established clear-cut questions you want your insights
to answer, you need to set a host of key performance
indicators (KPIs) that will help you track, measure,
and shape your progress in a number of key areas.
 Omit useless data
◦Having bestowed your data analysis techniques and
methods with true purpose and defined your mission,
you should explore the raw data you’ve collected
from all sources and use your KPIs as a reference for
chopping out any information you deem to be useless.
 Build a data management roadmap
◦While, at this point, this particular step is optional (you will
have already gained a wealth of insight and formed a fairly
sound strategy by now), creating a data governance roadmap
will help your data analysis methods and techniques become
successful on a more sustainable basis. These roadmaps, if
developed properly, are also built so they can be tweaked and
scaled over time.
 Integrate technology
◦Robust analysis platforms will not only allow you to pull
critical data from your most valuable sources while
working with dynamic KPIs that will offer you actionable
insights; it will also present them in a digestible, visual,
interactive format from one central, live dashboard. A
data methodology you can count on.
 Answer your questions
◦By considering each of the above efforts, working with the
right technology, and fostering a cohesive internal culture
where everyone buys into the different ways to analyze data as
well as the power of digital intelligence, you will swiftly start
to answer your most burning business questions. Arguably, the
best way to make your data concepts accessible across the
organization is through data visualization.
 Visualize your data
◦Online data visualization is a powerful tool as it
lets you tell a story with your metrics, allowing
users across the organization to extract meaningful
insights that aid business evolution – and it covers
all the different ways to analyze data.
 Be careful with interpretation
◦ We already dedicated an entire post to data interpretation as it is
a fundamental part of the process of data analysis. It gives
meaning to the analytical information and aims to drive a
concise conclusion from the analysis results. Since most of the
time companies are dealing with data from many different
sources, the interpretation stage needs to be done carefully and
properly in order to avoid misinterpretations. 
  Build a narrative
◦The human brain responds incredibly well to strong
stories or narratives. Once you’ve cleansed, shaped,
and visualized your most invaluable data using
various BI dashboard tools, you should strive to tell a
story - one with a clear-cut beginning, middle, and
end.
 Consider autonomous technology
◦Autonomous technologies, such as artificial
intelligence (AI) and machine learning (ML),
play a significant role in the advancement of
understanding how to analyze data more
effectively.
 Share the load
◦Once everyone is able to work with a data-driven
mindset, you will catalyze the success of your
business in ways you never thought possible. And
when it comes to knowing how to analyze data,
this kind of collaborative approach is essential.
 Data analysis tools
◦In order to perform high-quality analysis of data,
it is fundamental to use tools and software that
will ensure the best results. Here we leave you a
small summary of four fundamental categories
of data analysis tools for your organization.
 Refine your process constantly 
◦ Last is a step that might seem obvious to some people, but it can be
easily ignored if you think your are done. Once you have extracted
the needed results, you should always take a retrospective look at
your project and think about what you can improve. As you saw
throughout this long list of techniques, data analysis is a complex
process that requires constant refinement. For this reason, you should
always go one step further and keep improving.