What is Data Analysis?

Research | Types | Methods | Techniques

What is Data Analysis?

Data analysis is defined as a process of cleaning, transforming, and modeling data

to discover useful information for business decision-making. The purpose of Data
Analysis is to extract useful information from data and taking the decision based
upon the data analysis.

A simple example of Data analysis is whenever we take any decision in our day-to-
day life is by thinking about what happened last time or what will happen by choosing
that particular decision. This is nothing but analyzing our past or future and making
decisions based on it. For that, we gather memories of our past or dreams of our
future. So that is nothing but data analysis. Now same thing analyst does for
business purposes, is called Data Analysis.

In this tutorial, you will learn:

 Why Data Analysis?

 Data Analysis Tools
 Types of Data Analysis: Techniques and Methods
 Data Analysis Process

Why Data Analysis?

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 and acknowledge 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 to grow
more. All you need to do is analyze your business data and business processes.
Data Analysis Tools

Data Analysis Tools

Data analysis tools make it easier for users to process and manipulate data, analyze
the relationships and correlations between data sets, and it also helps to identify
patterns and trends for interpretation. Here is a complete list of tools used for data
analysis in research.

Types of Data Analysis: Techniques and Methods

There are several types of Data Analysis techniques that exist based on business
and technology. However, the major Data Analysis methods are:

 Text Analysis
 Statistical Analysis
 Diagnostic Analysis
 Predictive Analysis
 Prescriptive Analysis

Text Analysis

Text Analysis is also referred to as Data Mining. It is one of the methods of data
analysis to discover a pattern in large data sets using databases or data mining
tools. It used to transform raw data into business information. Business Intelligence
tools are present in the market which is used to take strategic business decisions.
Overall it offers a way to extract and examine data and deriving patterns and finally
interpretation of the data.
Statistical Analysis

Statistical Analysis shows "What happen?" by using past data in the form of
dashboards. Statistical Analysis includes collection, Analysis, interpretation,
presentation, and modeling of data. It analyses a set of data or a sample of data.
There are two categories of this type of Analysis - Descriptive Analysis and
Inferential Analysis.

Descriptive Analysis

analyses complete data or a sample of summarized numerical data. It shows mean

and deviation for continuous data whereas percentage and frequency for categorical
data.

Inferential Analysis

analyses sample from complete data. In this type of Analysis, you can find different
conclusions from the same data by selecting different samples.

Diagnostic Analysis

Diagnostic Analysis shows "Why did it happen?" by finding the cause from the
insight found in Statistical Analysis. This Analysis is useful to identify behavior
patterns of data. If a new problem arrives in your business process, then you can
look into this Analysis to find similar patterns of that problem. And it may have
chances to use similar prescriptions for the new problems.

Predictive Analysis

Predictive Analysis shows "what is likely to happen" by using previous data. The
simplest data analysis example is like if last year I bought two dresses based on my
savings and if this year my salary is increasing double then I can buy four dresses.
But of course it's not easy like this because you have to think about other
circumstances like chances of prices of clothes is increased this year or maybe
instead of dresses you want to buy a new bike, or you need to buy a house!
So here, this Analysis makes predictions about future outcomes based on current or
past data. Forecasting is just an estimate. Its accuracy is based on how much
detailed information you have and how much you dig in it.

Prescriptive Analysis

Prescriptive Analysis combines the insight from all previous Analysis to determine
which action to take in a current problem or decision. Most data-driven companies
are utilizing Prescriptive Analysis because predictive and descriptive Analysis are not
enough to improve data performance. Based on current situations and problems,
they analyze the data and make decisions.

Data Analysis Process

The Data Analysis Process is nothing but gathering information by using a proper
application or tool which allows you to explore the data and find a pattern in it. Based
on that information and data, you can make decisions, or you can get ultimate
conclusions.

Data Analysis consists of the following phases:

 Data Requirement Gathering

 Data Collection
 Data Cleaning
 Data Analysis
 Data Interpretation
 Data Visualization

Data Requirement Gathering

First of all, you have to think about why do you want to do this data analysis? All you
need to find out the purpose or aim of doing the Analysis of data. You have to decide
which type of data analysis you wanted to do! In this phase, you have to decide what
to analyze and how to measure it, you have to understand why you are investigating
and what measures you have to use to do this Analysis.
Data Collection

After requirement gathering, you will get a clear idea about what things you have to
measure and what should be your findings. Now it's time to collect your data based
on requirements. Once you collect your data, remember that the collected data must
be processed or organized for Analysis. As you collected data from various sources,
you must have to keep a log with a collection date and source of the data.

Data Cleaning

Now whatever data is collected may not be useful or irrelevant to your aim of
Analysis, hence it should be cleaned. The data which is collected may contain
duplicate records, white spaces or errors. The data should be cleaned and error free.
This phase must be done before Analysis because based on data cleaning, your
output of Analysis will be closer to your expected outcome.

Data Analysis

Once the data is collected, cleaned, and processed, it is ready for Analysis. As you
manipulate data, you may find you have the exact information you need, or you
might need to collect more data. During this phase, you can use data analysis
tools and software which will help you to understand, interpret, and derive
conclusions based on the requirements.

Data Interpretation

After analyzing your data, it's finally time to interpret your results. You can choose
the way to express or communicate your data analysis either you can use simply in
words or maybe a table or chart. Then use the results of your data analysis process
to decide your best course of action.

Data Visualization

Data visualization is very common in your day to day life; they often appear in the
form of charts and graphs. In other words, data shown graphically so that it will be
easier for the human brain to understand and process it. Data visualization often
used to discover unknown facts and trends. By observing relationships and
comparing datasets, you can find a way to find out meaningful information.

Summary:

 Data analysis means a process of cleaning, transforming and modeling data

to discover useful information for business decision-making
 Types of Data Analysis are Text, Statistical, Diagnostic, Predictive,
Prescriptive Analysis
 Data Analysis consists of Data Requirement Gathering, Data Collection, Data
Cleaning, Data Analysis, Data Interpretation, Data Visualization