Data analysis techniques allow you to gain powerful insights that reside within data. Insights, which can be used to markedly improve your business.
But, to unmask and unlock the value from your data, data analysis techniques need to be learned and applied. And for the non-analyst, this can seem daunting.
So, how do you approach learning about data analysis?
Well, as my Dad says: “How do you eat an elephant?” …“One bite at a time”.
Understanding of the basics of data analysis, means that you can understand how to breakdown and restructure complex information to produce actionable intelligence, that can solve pressing business questions.
So let’s break this down – what is data analysis?
Data analysis is looking at evidence
Though ‘data analysis’ is a broad term; all data analysts use empirical evidence to assess problems. This means using data to provide evidence for your decisions and actions.
What does analysis involve?
1. Identify an issue
Typically you don’t analyze for the sake of analysis. Generally, an issue is raised or brought to your attention that requires feedback.
2. Define the problem
Just because an issue has been identified does not mean the actual problem has been defined. You must always define your problem or desired goal. If you don’t know what you want to achieve, how will your data help you?
Ask your client (whoever it might be) – another company, your company, your boss – detailed questions about the expected outcomes of your analysis. This helps define the problem and client expectations.
3. Analyze you data
Now that you’ve defined your problem, break the information obtained down to a suitable level of granularity. The large question may be unmanageable on its own, but broken down into small chunks, is solvable. If your data analysis is attempting to solve the question – “How do we position our brand more successfully in the marketplace?” – for example, break it down to:
- Who are our best customers?
- What is marketplace competition like?
- How does our price compare to competitors?
- Does our product quality match its asking price?
- And so on…
Look for comparisons
In the company’s quest to position your brand better, advertising targeting an older age bracket has been increased. How has this affected gross sales revenue? Did the simultaneous re-pricing of the product, to reposition it as a luxury item, improve or hinder overall sales?
4. Evaluate alternative actions
You have analyzed your data. Now you need to position alternative actions and recommendations. Use your analysis to test alternative courses of action. Even test these in the real world using small subsets to determine the best course of action.
5. Deciding on a course of action
Then, based on your analysis, make an informed judgment and recommend a course of action. Your ideas and judgments based on the analysis undertaken should be presented in a clear and meaningful way that promotes better decision-making based on evidence and logical reasoning.
There. Elephant gone.