Introduction

“Data is Everywhere”, in sheets, in social media platforms, in product reviews and feedback,
everywhere. It’s created at blinding speeds and, when data is analyzed correctly, can be a
company’s most valuable asset. “To grow your business even to grow in your life,
sometimes all you need to do is Analysis!” If your business is not growing, then you have to
look back recognize your mistakes, and make a plan again without repeating those mistakes.
And even if your business is growing, then you have to look forward to making the business
grow more.
All you need to do is analyze your business data and business processes. The process of
studying the data to find out the answers to how and why things happened in the past. Usually,
the result of data analysis is the final dataset, i.e. a pattern, or a detailed report that you can
further use for Data Analytics.

Data analysis is the process of cleaning, changing, and processing raw data and extracting
actionable, relevant information that helps businesses make informed decisions. The procedure
helps reduce the risks inherent in decision-making by providing useful insights and statistics,
often presented in charts, images, tables, and graphs.

Example of Data Analysis

A simple example of data analysis can be seen whenever we make a decision in our daily lives
by evaluating what has happened in the past or what will happen if we make that decision.
Basically, this is the process of analyzing the past or future and making a decision based on that
analysis.

Analysis is a process of answering “How?” and “Why?”. For example, how was the growth of
XYZ Company in the last quarter? Or why did the sales of XYZ Company drop last summer?
So to answer those questions we take the data that we already have. Out of that, we filter out
what we need. This filtered data is the final dataset of the larger chunk that we have already
collected and that becomes the target of data analysis. Sometimes we take multiple data
sets and analyze them to find a pattern. For example, take summer sales data for three
consecutive years. I found out if that fall in sales last summer was because of any specific
product that we were selling or if it was just a recurring problem. It’s all about looking for a
pattern.

Why Data Analysis is important?

Let’s say you own a business and sell daily products. Your business model is pretty simple.
You buy products from the supplier and sell them to the customer. Let’s assume the biggest
challenge for your business is to find the right amount of stock at the given time. You can’t
stock excess dairy products as they are perishable and if they go bad you can’t sell them,
resulting in a direct loss for you. At the same time, you cannot under stock as it may result in
the loss of potential customers. But data analytics can help you in predicting the strength of
your customers at a given time. Using that result, you can sufficiently stock your supplies, in
turn, minimizing the loss. In simple words, using data analysis, you can find out the time of the
year when your store has the least or the most customers. Using this info, you can stock your
supplies accordingly. So these are some reasons why analysis of data is important.

a list of reasons why data analysis is crucial to doing business today.

 Better Customer Targeting: You don’t want to waste your business’s precious time,
resources, and money putting together advertising campaigns targeted at demographic groups
that have little to no interest in the goods and services you offer. Data analysis helps you see
where you should be focusing your advertising and marketing efforts.

 You Will Know Your Target Customers Better: Data analysis tracks how well your
products and campaigns are performing within your target demographic. Through data
analysis, your business can get a better idea of your target audience’s spending habits,
disposable income, and most likely areas of interest. This data helps businesses set prices,
determine the length of ad campaigns, and even help project the number of goods needed.
 Reduce Operational Costs: Data analysis shows you which areas in your business need
more resources and money, and which areas are not producing and thus should be scaled back
or eliminated outright.
 Better Problem-Solving Methods: Informed decisions are more likely to be successful
decisions. Data provides businesses with information. You can see where this progression is
leading. Data analysis helps businesses make the right choices and avoid costly pitfalls.
 You Get More Accurate Data: If you want to make informed decisions, you need data,
but there’s more to it. The data in question must be accurate. Data analysis helps businesses
acquire relevant, accurate information, suitable for developing future marketing strategies,
business plans, and realigning the company’s vision or mission.

Data Analysis Process?

A Data analysis has the ability to transform raw available data into meaningful insights for
your business and your decision-making. While there are several different ways of collecting
and interpreting this data, most data-analysis processes follow the same six general steps.
1. Specify Data Requirements
2. Collect Data
3. Clean and Process the Data
4. Analyse the Data
5. Interpretation
6. Report
1. Specify Data Requirements
In step 1 of the data analysis process define what you want to answer through data. This
typically stems from a business problem or questions, such as
 How can we reduce production costs without sacrificing quality?
 How do customers view our brand?
 How can we increase sales opportunities using our current resources?
2. Collect Data
 Find Your Source: Determine what information can be collected from existing
sources, and what you need to find elsewhere.
 Standardize Collection: Create file storage and naming system ahead of time.
 Keep Track: Keep data organized in a log with dates and add any source notes as you
go.
Internal Sources External Sources

Customer service data Social media APIs

Marketing analytics Google public data

Sales statistics Public government data

Human resource data Global finance data

Official research statistics

3. Clean and Process the Data

Ensure your data is correct and usable by identifying and removing any errors or corruption.
 Monitor Errors: Keep a record and look at trends of where most errors are coming
from.
 Validate Accuracy: Research and invest in data tools that allow you to clean your data
in real-time.
 Scrub for Duplicate Data: Identify and remove duplicates so you save time during
analysis.
 Delete all Formatting: Standardise the look of your data by removing any formatting
styles.
4. Analyse the Data
Different data analysis techniques allow you to understand, interpret, and derive conclusions
based on your business question or problem.
Descriptive Analysis Inferential Analysis

Analysis of data that helps show variables in a Exploring the relationship between
meaningful way and find patterns. multiple variables to make predictions.
 Descriptive Analysis Inferential Analysis

Measure of Tendency: The central position of a Correlation: Describe the relationship

frequency distribution for a group of data. between two variables.

Measure of Spread: Summarising a group of

Regression: Shows or predicts the
data by describing how to spread out the scores
relationship between two variables.
are.

5. Interpretation
As you interpret the result of your data, ask yourself these key questions:
 Does the data answer your question? How?
 Does the data help you defend against any objections? How?
 Are there any limitations or angles you haven’t considered?
6. Report
Data Analysis can be used to report to different people:
 A primary collaborator or client
 Executive and business leaders
 A technical supervisor

 Keep it Succinct: Organize data in a way that makes it easy for different audiences to
skim through it to find the information most relevant to them.
 Make it Visual: Use data visualizations techniques, such as tables and charts, to
communicate the message clearly.
 Include an Executive Summary: This allows someone to analyze your findings
upfront and harness your most important points to influence their decisions.

Data analysis process

As the data available to companies continues to grow both in amount and
complexity, so too does the need for an effective and efficient process by which
to harness the value of that data. The data analysis process typically moves
through several iterative phases. Let’s take a closer look at each.
 Identify the business question you’d like to answer. What problem is the
company trying to solve? What do you need to measure, and how will you
measure it?
 Collect the raw data sets you’ll need to help you answer the identified
question. Data collection might come from internal sources, like a company’s
client relationship management (CRM) software, or from secondary sources,
 like government records or social media application programming interfaces
(APIs).
 Clean the data to prepare it for analysis. This often involves purging
duplicate and anomalous data, reconciling inconsistencies, standardising data
structure and format, and dealing with white spaces and other syntax errors.
 Analyse the data. By manipulating the data using various data analysis
techniques and tools, you can find trends, correlations, outliers, and variations
that tell a story. During this stage, you might use data mining to discover
patterns within databases or data visualisation software to help transform data
into an easy-to-understand graphical format.
 Interpret the results of your analysis to see how well the data answered
your original question. What recommendations can you make based on the
data? What are the limitations of your conclusions?

Types of data analysis (with examples)

Data can be used to answer questions and support decisions in many different
ways. Identifying the best way to analyse your data can help familiarise yourself
with the four types of data analysis commonly used in the field.

In this section, we’ll look at these data analysis methods and an example of
how each might be applied in the real world.

Descriptive analysis
Descriptive analysis tells us what happened. This type of analysis helps
describe or summarise quantitative data by presenting statistics. For example,
descriptive statistical analysis could show sales distribution across a group of
employees and the average sales figure per employee.

Descriptive analysis answers the question, “What happened?”

Diagnostic analysis
If the descriptive analysis determines the “what,” diagnostic analysis
determines the “why.” Let’s say a descriptive analysis shows an unusual influx
of patients in a hospital. Drilling into the data might reveal that many of these
patients shared symptoms of a particular virus. This diagnostic analysis can
help you determine that an infectious agent—the “why”—led to the influx of
patients.

Diagnostic analysis answers the question, “Why did it happen?”

Predictive analysis
So far, we’ve looked at types of analysis that examine and draw conclusions
about the past. Predictive analytics uses data to form projections about the
future. Using predictive analysis, you might notice that a given product has had
its best sales during September and October each year, leading you to predict
a similar high point during the upcoming year.

Predictive analysis answers the question, “What might happen in the future?”

Prescriptive analysis
Prescriptive analysis takes all the insights gathered from the first three types of
analysis and uses them to form recommendations for how a company should
act. Using our previous example, this type of analysis might suggest a market
plan to build on the success of the high sales months and harness new growth
opportunities in the slower months.

Prescriptive analysis answers the question, “What should we do about it?”

This last type is where the concept of data-driven decision-making comes into
play.

What is data-driven decision-making (DDDM)?

Data-driven decision-making, sometimes abbreviated to DDDM, can be defined

as the process of making strategic business decisions based on facts, data, nd
metrics instead of intuition, emotion, or observation.
Data analysis process: How to get started

The actual analysis is just one step in a much bigger process of using data to
move your business forward. Here's a quick look at all the steps you need to
take to make sure you're making informed decisions.

Data decision

As with almost any project, the first step is to determine what problem you're
trying to solve through data analysis.

Make sure you get specific here. For example, a food delivery service may
want to understand why customers are canceling their subscriptions. But to
 enable the most effective data analysis, they should pose a more targeted
question, such as "How can we reduce customer churn without raising
costs?"

These questions will help you determine your KPIs and what type(s) of data
analysis you'll conduct, so spend time honing the question—otherwise your
analysis won't provide the actionable insights you want.

Data collection

Next, collect the required data from both internal and external sources.

 Internal data comes from within your business (think CRM software,
internal reports, and archives), and helps you understand your business and
processes.
 External data originates from outside of the company (surveys,
questionnaires, public data) and helps you understand your industry and
your customers.

You'll rely heavily on software for this part of the process. Your analytics or
business dashboard tool, along with reports from any other internal tools
like CRMs, will give you the internal data. For external data, you'll use survey
apps and other data collection tools to get the information you need.

Data cleaning

Data can be seriously misleading if it's not clean. So before you analyze,
make sure you review the data you collected. Depending on the type of data
you have, cleanup will look different, but it might include:
 Removing unnecessary information
 Addressing structural errors like misspellings
 Deleting duplicates
 Trimming whitespace
 Human checking for accuracy

You can use your spreadsheet's cleanup suggestions to quickly and effectively
clean data, but a human review is always important.

Data analysis

Now that you've compiled and cleaned the data, use one or more of the above
types of data analysis to find relationships, patterns, and trends.

Data analysis tools can speed up the data analysis process and remove the
risk of inevitable human error. Here are some examples.

 Spreadsheets sort, filter, analyze, and visualize data.

 Business intelligence platforms model data and create dashboards.
 Structured query language (SQL) tools manage and extract data in
relational databases.

Data interpretation

After you analyze the data, you'll need to go back to the original question you
posed and draw conclusions from your findings. Here are some common
pitfalls to avoid:
 Correlation vs. causation: Just because two variables are associated
doesn't mean they're necessarily related or dependent on one another.
 Confirmation bias: This occurs when you interpret data in a way that
confirms your own preconceived notions. To avoid this, have multiple people
interpret the data.
 Small sample size: If your sample size is too small or doesn't represent
the demographics of your customers, you may get misleading results. If you
run into this, consider widening your sample size to give you a more
accurate representation.

Data visualization

Last but not least, visualizing the data in the form of graphs, maps, reports,
charts, and dashboards can help you explain your findings to decision-makers
and stakeholders. While it's not absolutely necessary, it will help tell the story
of your data in a way that everyone in the business can understand and make
decisions based on.

Automate your data collection

Data doesn't live in one place. To make sure data is where it needs to be—
and isn't duplicative or conflicting—make sure all your apps talk to each
other. Zapier automates the process of moving data from one place to another,
so you can focus on the work that matters to move your business forward.