As we all are aware that we are in digital age where all things are linked to data. and every day we are creating billions of data on our phones and computers, on our social media, on our online shopping, or even in our day to day activities. The question is however what we do with all this data, what we perceive it, and what does it matter to us. So this is where the data analysis comes and now I will be explaining the meaning of data analysis and why everyone should be interested in it even though you are not even in the field of technology.
Well let me put it in simple terms data analysis can be briefly defined as the process of gathering data, arranging it and then identifying patterns or insights of that data. With as much information that we all have around us, we cannot use that information without analyzing it in the right way. As an illustration when you have sales information of your business on a year-round basis but fail to analyze it, you will be unaware of what product is selling better, what month is recording the highest sales or which customers are favoring what. The data analysis process is beneficial in that we make sense out of all the numbers and information we possess. And even it helps us make better decisions which are made on facts and not only gut feeling.
Well I would say that data analysis is not only possessed by large corporations or scientists that everyone is performing some amount of data analysis in their everyday life without even being aware of it. Indeed, as you are going out, you look at weather forecast and you are using analyzed data. When you see trending topics on the social media that is also a product of data analysis. And even when Netflix or YouTube suggest to you what to watch after you watched something before that is data analysis on the ground floor. That is why basically data analysis is all around our life but we are not aware most of the times.
At this point people will reason and say so why should I bother with data analysis when computers and AI are doing everything. Well the thing is that knowledge of data analysis can assist you in a number of ways both in your personal and professional life. As in business when you know information you can make better marketing, sales and customer services decisions. You are able to know which of the strategies is working and the one that is not working. And even personal life is a place where you can scrutinize your spending patterns, health records or schedule management to become a better person. Thus basic knowledge on data analysis will put you ahead of other people who are simply taking decisions without knowledge.
Well, should I speak about the data analysis process it has a limited number of steps. The first thing you must do is to gather information on various sources that could be surveys, databases, websites or even sensors. Thereafter you clean up the data since in most cases there are errors in the data, duplication of data or lack of information that you require to rectify. Once you have cleaned you format the data in an appropriate manner such that you are able to analyze it with ease. Then there is the analysis part itself when you apply various methods and tools to discover patterns, trends, and insights. I do not really know much about all the technical tools but I understand that there is such software as Excel, Python, R, and lots of others that are used by people to analyze data.
Well there is one significant thing in data analysis and that is data visualization. Numbers and tables are dull and hard to follow by the majority. However, once you present same data in form of charts, graphs and dashboards then it becomes easy to understand and interesting. And even visualization assists in communicating your findings to other non technical people. Therefore the skill of visual representation of data is very essential to the analysis of data. Well I have already attended numerous presentations on which people simply display numbers and audience becomes bored. However, when you present colorful charts and graphs people become attentive and comprehend more.
Now, why then, says I, do businesses place such emphasis on analysis of data. Well the answer is easy since decisions based on assumptions are not accurate as compared to data-driven decisions. In the competitive market today, unless you use data to figure out your clients and the market trends, you will be lagging behind. And even data analysis enables businesses to forecast the trends in the future, spot the issues before they become large, and discover the new opportunities. As an example, e-commerce companies study customer behavior in order to be aware of what and whom to recommend, whether to offer discounts and how to enhance user experience. In effect data analysis is providing companies with competitive advantage.
Well I would also say that data analysis does not only seek what happened in the past but it also seeks the anticipation of what will happen in the future. Just like you can predict sales, customer churn-off, or possible risk by properly analyzing your data and machine learning models. And this predictive analysis is turning out to be of great importance to the businesses to strategize. Of course no predictions are always hundred percent accurate but they get you a better clue as compared to making random guesses.
We all know that data is the new oil and it is worthwhile skill to know how to analyze it. Even better than that though you might not wish to become a data analyst but knowing the fundamentals of the data analysis will aid you in any area of practice. I would remain inquisitive about data and begin to learn since in the future this skill will be mandatory in nearly all jobs.