In today’s world, companies strive to accelerate the pace of their development. They want to gain more customers, stay ahead of the competition, and improve their results. And data analytics prove to be an excellent tool. In this article, we describe what data analytics for businesses is and point out a number of benefits of using this process.
Data analytics for business
Many companies generate and collect data almost all the time. However, their raw form does not provide any valuable information. Data analytics is a key tool that allows businesses to categorize their data in order to gain precious insights. Thus, it affects the development and performance of the company.
Data analytics uses a variety of disciplines, including mathematics, statistics, and computer programming. Moreover, there are many techniques that can be used to extract and analyze data. They often rely on complex systems that bring automation, machine-learning algorithms, and other approaches together.
The data analysis process – how does it look?
Data analysis should focus on finding the right solutions to the problem. Therefore, the first step is to set a goal for data analysis.
Collecting the data
Then you need to collect data. You can collect data primarily through surveys, interviews, or observations.
Cleaning the data
If you have low-quality data, data analysis will not be effective. Therefore, cleaning is necessary, as it allows you to create the right data set.
Use the appropriate procedures to interpret the data and come to a valid conclusion.
The last but one step is data manipulation. You can do this using tools like Excel, Pivot Tables, Google Sheets, etc.
It is worth visualizing the data to gain better insight. You can present them using charts, bar charts, pie charts, tables, histograms, etc.
Types of data analytics
Descriptive analytics is a process that aims to summarize and visualize historical data. This is the simplest type of analytics that shows companies what has already happened. In the case of descriptive analysis, organizations reach for tools such as Excel, Stata, or SPASS. This type of analysis allows businesses to extract trends from raw data.
Diagnostic analysis not only investigates what happened, but also explains the cause of what happened. To perform diagnostic analysis, analysts must be able to ask detailed questions to identify trends and causes. Thus, this type of analysis allows businesses to get to the root of the problem.
The previous two analytics examined historical data and focused on the past. Predictive analytics is used to predict future trends.
This is a type of analysis that uses datasets collected from Diagnostics Analytics and Descriptive Analytics. What’s more, with predictive analytics, specialists can interpret the data and then create predictive models.
The last type of analytics is prescriptive analytics. It is largely based on machine learning analytics and neural networks. The prescriptive analysis examines situations from the past in order to determine the best way to approach a given situation. It is worth using this type of analytics when making decisions based on data.
Benefits of data analytics for businesses
The benefits of analytics are numerous and diverse. However, they all have one thing in common: they provide insight into all areas of the company’s operation. Here are a few of them:
- Faster business decisions based on data, not emotions
- Identify performance issues that require action
- A deeper understanding of customer needs
- Obtaining a significant competitive advantage
- Better understand your company’s financial performance
- Identification of ways to reduce costs and thus increase profits
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Data analysis fundamentally affects the development of any organization. It enables companies to gain valuable insights, allowing them to make better decisions and be more successful. So, take advantage of data analytics consulting if you want to boost your business.