Data Analysis: Why you Need to Learn It And The Types You Should Know

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For any business to succeed, it’s important for the owner to regularly conduct data analysis. When you use this data in an effective way, you will be able to understand how the business performed in the past, how it’s performing in the present, and you’ll also be able to make solid and sound plans for the future. That’s why it’s highly advisable to take data analysis courses whenever you get the chance to as it will enlighten you more on how to go about this.

In this article, we discuss reasons why you should consider data analysis courses and some of the important things you need to know about data analysis in business.

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What is data analysis?

Data analysis refers to the process whereby statistical and logical techniques are systematically applied in the description, illustration, condensing, recapping and the evaluation of data.

It can also be described as the process whereby data is collected and organized so that one can draw meaningful and helpful conclusions from it. The process involves the use of analytical and logical reasoning to get reasonable information from the collected data.

Why should you take data analysis courses?

Data analysis courses come highly recommended because today’s world highly relies on the data we get. Here are more reasons why you should enroll in data analysis courses:

There is high demand for data analysis professionals

In today’s world, technology experts who have data analysis experience are in very high demand. This is because many different organizations are trying their best to make use of big data as they have discovered the power of data when it comes to business growth. Taking the course will, therefore, make you very marketable.

Data analysis courses prepare you for big salaries in future

Data analysis helps companies grow and with this growth comes huge salaries. Taking a data analysis course, therefore, makes you better placed to grow financially much faster.

A data analysis course allows for multiple specialisation

When you take a data analysis course, you have the option of specializing in multiple areas depending on your individual competences. Examples include marketing analysis, financial analysis, sales analysis, operations analysis, just to mention a few. The data analysis courses, therefore, prepare you for a more exciting work environment and work life.

A data analysis course makes you prepared to make a bigger difference

Aside from the course preparing you for bigger paychecks and high positions in future, it prepares you to make a big impact to organizations.

Realize you’ll be helping these organizations achieve their visions, missions and objectives as data is the world’s holy grail nowadays. Through this data analysis, you’ll be able to help companies find their true calling.

Why is data analysis importance for a business?

We have mentioned that data analysis is helpful in the business world and here are some specific reasons why:

Data analysis facilitates better targeting

When you use data analysis, you can establish the forms of advertising that will effectively reach your customers and make an impact so that they end up purchasing and consuming your products or services.

Data makes it easier for you as a business owner to understand the advertising methods that are best for your business and how possible it is for you to adopt this advertising method. You will realize the costs you will incur in the process and how the returns of your investment in this advertising will be.

Data analysis helps you understand your customers

With data analysis, you can easily check how your products are performing in the market. The moment you understand which products your target market prefers, you’ll be better placed to determine the areas in which you will focus on most and for which type of customers.

Data analysis enables you to understand the consumer’s spending habits, and their different tastes. This information helps you in the pricing of goods.

Data analysis helps cut down operation costs

Data analysis helps you understand those sectors in your business that might be using up finances unnecessarily and those areas that are in need of more finances.

When you have this knowledge, you can cut the amount of money that goes out by significantly reducing the business’ operational cost and the cost of production of goods.

Data analysis therefore makes everything precise meaning you will avoid filler activities that add no value.

Data analysis can solve business problems and make better decisions

If you’re running a business, you understand that any problem can stop the operations in it and bring you losses.

Data analysis goes a long way in helping you make sound decisions on how to run your business and will give you the necessary information on any malfunctions and how to avoid other operational problems.

Data analysis facilitates new innovation

Thanks to data analysis, you as a business can get an idea of future trends in the behavior of the consumers you are interested in.

You will, therefore, be able to make your products more futuristic and invent more that will be welcomed in the future by your target customers. This will give you a competitive edge in that industry you’re in.

For data analysis to be conducted, data needs to be collected. Here are some methods of data collection

Methods of data collection

Whenever you take a data analysis course, you are exposed to the following methods of data collection:

  • Surveys
  • Literature
  • Interviews
  • Observation
  • Experiments
  • Documents and records

Types of data analysis

There are different types of data analysis that you can learn from a data analysis course. They include:

Descriptive analysis

Applications

  • Tracking KPI dashboards
  • Conducting overviews of sales leads
  • Reporting on the business’ monthly revenue

This is the most common type of data analysis and also the simplest. It is used by many businesses as it answers the question, “what happened?”

This data analysis method does this by summarizing the data from the past in dashboard form.

This data analysis type is used to track Key Performance Indicators, mostly known as KPIs. These determine how well or how poorly a business is performing based on certain benchmarks.

Diagnostic analysis

Applications

  • Investigating cause of delays in a company’s production
  • Establishing which marketing activities worked for the company
  • Establishing why targets were not reached
  • Establishing why revenues went high or dropped

This type of data analysis is next once you have already established what exactly happened.  It asks the question, “why did it happen?”

The diagnostic type of data analysis makes use of all the insights you gathered from the descriptive data analysis type and finds the causes of those results.

You can use this type of data analysis to establish more connections between the data you have collected and to identify the behavior patterns

This data analysis type creates more detailed information that helps even when new problems come up because it means you already have some kind of data pertaining to that particular issue. That way, you will not have to repeat work as all the problems are somehow interconnected.

Predictive data analysis

Applications

  • Risk assessment
  • Forecasting sales
  • Analyzing customer success teams
  • Determining the leads that will most likely convert

This type of data analysis is all about answering the question, “what next?”or “what is likely to happen?”

It simply makes logical predictions for the future using data from the past.

Statistical modeling is the basis for this type of data analysis which requires manpower and added technology to forecast. This forecast is normally an estimate because the accuracy of any prediction is dependent on the quality and detailed data.

It’s with this data analysis type that some businesses find difficulty because they don’t have the manpower to implement this type of data analysis in all the areas that they desire.

They are sometimes unable to invest in predictive analysis teams in all the departments or are not ready to educate the current teams they have.

Prescriptive data analysis

Applications

  • Determining the best marketing method to use
  • Determining whether to expand or downsize
  • Allocation of funds

This data analysis type is the most sought after by businesses but very few of them are well equipped to carry it out.

Prescriptive data analysis combines insights from the other three and determines how best to move forward from an existing problem.

This type of data analysis incorporates the use of state-of-the-art technology and data observation and practices. It’s a huge commitment that requires businesses to be very ready to allocate both effort and resources to.

What’s the most important type of data analysis?

As can be seen, all the four methods are important as they give a different outcome required by the business in order to move forward.

For you to learn all these types of data analysis, you need to take data analysis courses. Various universities and colleges offer them nowadays and all you need to do is sign up and start your journey to becoming a data analysis professional.

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References:

1. Why Data Analysis Is Important 2. Importance of Data Analysis 3. What Is Data Analysis  4. Methods of Data Collection 5. Types of Data Analysis 6. Methods of Data Analysis  7. Diagnostic Data Analysis 8. Predictive vs Prescriptive Data Analysis

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