What is data analytics?
Data analytics is the process of collecting, processing and analyzing large amounts of data in order to find relevant information, make decisions and predict future events. Data analytics is used in many different fields, such as business, health sciences, marketing and sports, and is a key part of modern decision-making.
What does data analytics include?
Data analytics consists of several different steps and methods, which can be divided into the following main steps:
- Data Collection: The first step is to collect data from various sources such as databases, websites, sensors and social media.
- Data cleaning: Collected data is often raw and contains errors or omissions. In the data cleaning phase, the data is edited and corrected so that it is in an analyzable form.
- Data analysis: In this phase, various statistical and computational methods are used to analyze the data. This may include, for example, regression analysis, clustering and time series analysis.
- Visualization: Analysis results are often presented in visual form, such as charts and graphs, to make them easier to understand and interpret.
- Reporting and decision-making: Finally, the results of the analysis are reported and used to support decision-making. This can mean, for example, modifying business strategies or developing new products.
Types of data analytics
Data analytics can be divided into four main types:
- Descriptive analytics: This type of analytics focuses on describing and understanding past events. It answers the question “What happened?”
- Diagnostic analytics: Diagnostic analytics goes a step further and tries to find out the reasons for past events. It answers the question “Why did it happen?”
- Predictive analytics: Predictive analytics uses historical data and statistical models to predict future events. It answers the question “What is likely to happen?”
- Prescriptive analytics: This type of analytics provides recommendations and action plans based on future events. It answers the question “What should we do?”
Benefits of data analytics
Data analytics has many advantages that can improve the operations and competitiveness of organizations:
- Better decision-making: Data analytics provides knowledge-based insights that help make better and more informed decisions.
- Improving efficiency: With the help of analytics, process bottlenecks can be identified and more efficient methods of operation can be developed.
- Improving customer experience: By better understanding customer needs and behavior, companies can offer better and more personalized services.
- Risk management: Proactive analytics helps identify and manage risks before they materialize.
Summary
Data analytics is a multi-step process that includes data collection, cleaning, analysis and visualization of results. It provides valuable insights and helps organizations make informed decisions. Different types of data analytics, such as descriptive, diagnostic, predictive and prescriptive analytics, offer different perspectives and solutions to business challenges.
You can read more about data analytics from, for example, the following sources:
IBM Data Analytics and SAS: What is Data Analytics?.
