Are you curious about what data analysis is and how it works?
Well, you’ve come to the right place. In this article, we’ll be breaking down the basics of data analysis, including the different methods and processes used, as well as the different types of data analysis.
Whether you’re new to the field or just looking to brush up on your knowledge, this guide will provide you with a solid understanding of the topic.
So, let’s dive in and learn more about data analysis!
What is Data Analysis
Data analysis is a process of cleaning, transforming, and modeling data to uncover valuable insights for making informed business decisions.
Its purpose is to extract information from data and use it to make informed decisions. A simple everyday example of data analysis is when we make decisions based on past experiences or future predictions.
For example, when we think about what happened last time or what may happen if we choose a certain decision, we are analyzing our past or future, gathering memories or imagining future scenarios.
This is similar to what analysts do for business purposes, which is known as data analysis.
Data Analysis Tools
There are various data analysis tools available, depending on the type of data and the specific analysis tasks. Some popular tools include:
1. Excel: A widely used tool for data analysis and visualization, particularly for smaller data sets.
2. R and Python: Both are programming languages that are widely used for data analysis and visualization. They offer a wide range of libraries and packages for data analysis tasks such as data cleaning, data visualization, and statistical analysis.
3. Tableau: A powerful data visualization tool that allows users to create interactive dashboards and reports.
4. SAS: A statistical software suite that offers data management, analytics, and reporting capabilities.
5. SQL: A programming language for managing and querying relational databases. It’s a commonly used tool for data analysis, particularly for large data sets.
6. Power BI: A business intelligence tool that allows users to connect to various data sources, create visualizations, and share insights.
7. SPSS: A software package used for statistical analysis in social sciences, it’s widely used in research and survey analysis.
These are just a few examples of the many data analysis tools available, and the right tool for a specific task will depend on the type of data and the specific analysis tasks.
Techniques and Methods
There are several types of data analysis techniques available, each with its own unique set of capabilities. But, we’ll be focusing on the major methods that are widely used in the industry.
1. Text Analysis
Text Analysis, also known as Data Mining, is a method of data analysis that helps to uncover patterns in large data sets using databases or specialized tools.
This method is used to transform raw data into valuable business information. With Text Analysis, you can extract and examine data, identify patterns, and make sense of the data.
Business Intelligence tools are available in the market that can be used to make strategic business decisions using this method.
These tools help to extract, examine and interpret the data and make decisions based on the analysis.
The goal of text analysis is to extract insights from unstructured text data, like social media posts, customer reviews, and emails, to understand customer sentiment and gain insights into their needs and preferences.
2. Stastitical Analysis
Statistical Analysis uses past data to understand “What happened?” by creating dashboards. It includes collecting, analyzing, interpreting, presenting and modeling data.
It’s used to understand patterns and trends in data and is divided into two categories: Descriptive Analysis and Inferential Analysis.
3. Inferential Analysis
Inferential Analysis uses a sample of data to draw conclusions about a larger population. It allows for making predictions and identifying relationships in the data. It’s important to note that different samples can lead to different conclusions about the same data.
4. Diagnostic Analysis
Diagnostic Analysis helps to understand “Why did it happen?” by identifying the cause of a problem found in statistical analysis.
It is used to identify behavior patterns in data, and can be used to troubleshoot new problems in business processes by finding similar patterns and using similar solutions.
5. Predictive Analysis
6. Prescriptive Analysis
Data Analysis Process
1. Data Requirement Gathering
Before diving into a data analysis project, it’s important to have a clear understanding of why you’re conducting the analysis and what you hope to achieve.
This is known as defining the purpose or aim of the analysis. It’s important to decide on the type of data analysis you want to do, and to consider what you want to analyze and how you will measure it.
It’s also important to understand the context and reasons behind the analysis and to decide on the appropriate methods and measures to use. This initial phase is crucial for setting the direction and scope of the analysis.
2. Data Collection
Gather requirements, collect data based on them, organize data for analysis, and keep a log of collection date and source.
3. Data Cleaning
Clean collected data by removing duplicates, errors, and irrelevant information. This step is crucial before analysis to ensure accurate results. Data cleaning ensures that the output of the analysis is closer to the expected outcome.
4. Data Analysing
If the data set is clean and tidy, it’s time to do the analysis. There are several types of data analysis, such as descriptive, diagnostic, predictive, and prescriptive analysis.
This step becomes the initial process to decide the follow up data and what strategy will be developed.