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What Is Data Analysis

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What Is Data Analysis

Information about data analyst

Uploaded by

yohnluchristom1909
Copyright
© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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What Is Data Analysis?

(With Examples)
Written by Coursera Staff • Updated on Nov 21, 2023
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Data analysis is the practice of working with data to glean useful information, which can then be
used to make informed decisions.

"It is a capital mistake to theorize before one has data. Insensibly one begins
to twist facts to suit theories, instead of theories to suit facts," Sherlock
Holme's proclaims in Sir Arthur Conan Doyle's A Scandal in Bohemia.

This idea lies at the root of data analysis. When we can extract meaning from
data, it empowers us to make better decisions. And we’re living in a time when
we have more data than ever at our fingertips.

Companies are wisening up to the benefits of leveraging data. Data analysis


can help a bank to personalize customer interactions, a health care system to
predict future health needs, or an entertainment company to create the next
big streaming hit.

The World Economic Forum Future of Jobs Report 2020 listed data
analysts and scientists as the top emerging job, followed immediately by AI
and machine learning specialists, and big data specialists [1]. In this article,
you'll learn more about the data analysis process, different types of data
analysis, and recommended courses to help you get started in this exciting
field.

Read more: How to Become a Data Analyst (with or Without a Degree)

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, standardizing data structure
and format, and dealing with white spaces and other syntax errors.
 Analyze the data. By manipulating the data using various data analysis
techniques and tools, you can begin to 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 visualization 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 to your conclusions?

Watch this video to hear what data analysis how Kevin, Director of Data
Analytics at Google, defines data analysis.

Play Video

Kevin, Director of Data Analytics at Google, defines what data analysis is and why it's important.
Share Data Through the Art of Visualization
Google

4.6 (8,073 ratings)


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470K Students Enrolled

Course 6 of 8 in the Google Data Analytics Professional Certificate


Enroll for Free

Read more: What Does a Data Analyst Do? A Career Guide

Types of data analysis (with examples)


Data can be used to answer questions and support decisions in many
different ways. To identify the best way to analyze your date, it can help to
familiarize yourself with the four types of data analysis commonly used in the
field.

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

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Descriptive analysis
Descriptive analysis tells us what happened. This type of analysis helps
describe or summarize quantitative data by presenting statistics. For example,
descriptive statistical analysis could show the distribution of sales 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 further 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 the months of 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.

Read more: Advanced Analytics: Definition, Benefits, and Use Cases


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, and metrics instead of intuition, emotion,
or observation.
This might sound obvious, but in practice, not all organizations are as data-driven as they could be.
According to global management consulting firm McKinsey Global Institute, data-driven companies
are better at acquiring new customers, maintaining customer loyalty, and achieving above-average
profitability [2].

Get started with Coursera


If you’re interested in a career in the high-growth field of data analytics,
consider these top-rated courses on Coursera:

Begin building job-ready skills with the Google Data Analytics Professional
Certificate. Prepare for an entry-level job as you learn from Google employees
—no experience or degree required.

Practice working with data with Macquarie University's Excel Skills for
Business Specialization. Learn how to use Microsoft Excel to analyze data
and make data-informed business decisions.

Deepen your skill set with Google's Advanced Data Analytics Professional
Certificate. In this advanced program, you'll continue exploring the concepts
introduced in the beginner-level courses, plus learn Python, statistics, and
Machine Learning concepts.

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