Data Analytics refers to the set of quantitative and qualitative approaches for deriving valuable insights from data. It involves many processes that include extracting data and categorizing it in order to derive various patterns, relations, connections, and other such valuable insights from it. Today, almost every organization has morphed itself into a data-driven organization, and this means that they are deploying an approach to collect more data that is related to their customers, markets, and business processes. This data is then categorized, stored, and analyzed to make sense out of it and derive valuable insights from it.
‘What gets measured, gets managed.’ – Peter Drucker
Comparison Between the Domains of Data Analysis and Data Science
||Mostly structured data
||Any type of data
||Statistics and data modeling
||Hadoop, programming languages, and Machine Learning
|Span of Domain
|Exploration & New Ideas
Before we start with exploring the blog, let’s take a look at the various topics covered in this blog:
Understanding Big Data Analytics
The term ‘Data Analytics’ is not a simple one as it appears to be. It is the most complex term, when it comes to big data applications. The three most important attributes of big data include volume, velocity, and variety.
The need for Big Data Analytics springs from all data that is created at breakneck speeds on the Internet. Our digital lives will make big data even bigger, thanks to the ever-increasing penchant of individuals to see their lives ever-connected to the online world. It is estimated that by the end of the next year the cumulative data that is generated every second will amount to 1.7 MB which will be contributed by every individual on the planet.
This shows the amount of data that is generated and hence the need for Big Data Analytics tools to make sense of all that data. It organizes, transforms, and models data based on the requirements for identifying patterns in the data and drawing necessary conclusions.
Watch this insightful video to find out what a Data Analyst does in real life:
The larger the size of the data the bigger the problem. So, big data may be defined as the data the size of which itself poses the problem and which needs newer ways of handling it. So, the analysis of data at high volume, velocity, and variety means that the traditional methods of working with data would not apply here.
‘Without Big Data Analytics, companies are blind and deaf, wandering out onto the web like deer on a freeway.’ – Geoffrey Moore
Importance of Data Analytics
Data analysis is an internal arrangement done through presenting numbers and figures to management. With data analytics the organizations will be able to make decisions on customer trends, behavior prediction, increasing the business profits, and drive effective decision-making.
Once the organizations adopt data analytics they can analyze the causes of particular events based on the data, understand the objective and directives for the business, and they can have technical insights of the business using an easy-to-understand language. Here are five reasons why businesses should adopt the data analysis method and technology.
- Better Targeting
Using Data Analytics, organizations can determine what forms of advertising reach their customers effectively and make an impact on them. Data enables the organizations to understand what methods of advertising their product have the biggest impact on the target audience and at what scale the organization could adopt such advertising.
- Bounce Rates
The data that concerns any online business is the bounce rate of their website. Lower bounce rates indicate that customers interested in the business are genuine and they wish to learn more about its offerings. On the other hand, higher bounce rates are a clear signal that something is a miss. It means that either Google or any other search engines are not identifying the business website for its relevance.
A business can have that super successful product that has global applications. Yet, if the business website has a high bounce rate it means that there is an urgent need to review the content. That content and manner in which the business and its offerings are presented need an immediate review.
Gathering data about who is buying products and from which location is also important. It helps the understand whether the business is reaching the right target audience or getting requests or sales from the markets it cannot serve. It can indicate the existence of a market which the business is unaware of and can mark an entry.
Analysis of data regarding the demographic reach of a business also helps understand why there is a larger interest from a specific geographic zone.
- New Innovations
Data analytics also gives the businesses a rough idea of the trends in the future in customer behavior that will also enable the businesses to make futuristic inventions and create new innovative services that will them at the top of the industry. With these inventions, businesses can maintain a sharp edge over their competitors. The good thing about these inventions is that the businesses can patent them and reap from them while at the same time raking profits.
- Cut Costs of Operation
Data analytics will do a lot good if the management wants to have a smooth and effectively run business. With a good data analytics system, the management can determine the sectors of the business that are draining the finances unnecessarily and the areas that need more financing.
How Does Big Data Analytics Make Working so Easy?
There are various tools in Data Analytics that can be successfully deployed in order to parse data and derive valuable insights out of it. The computational and data-handling challenges that are faced at scale mean that the tools need to be specifically able to work with such kinds of data.
The advent of big data changed analytics forever, thanks to the inability of the traditional data handling tools like relational database management systems to work with big data in its varied forms. Data warehouses also could not handle data that is of extremely big size.
The era of big data drastically changed the requirements for extracting meaning from business data. In the world of relational databases, administrators easily generated reports on data contents for business use, but these provided little or no broad business intelligence. It was for that, they employed data warehouses. But, data warehouses too generally could not handle the scale of big data, cost-effectively.
While data warehouses are certainly a relevant form of Data Analytics, the term ‘Data Analytics’ is slowly acquiring a specific subtext related to the challenge of analyzing data of massive volume, variety, and velocity.
‘In God we trust, all others must bring data.’ – W. Edwards Deming
Types of Data Analytics
- Prescriptive Analytics: This is the type of analytics that talks about an analysis based on the rules and recommendations in order to prescribe a certain analytical path for the organization.
- Predictive Analytics: Predictive analytics ensures that the path is predicted for the future course of action.
- Diagnostic Analytics: This is about looking into the past and determining why a certain thing happened. This type of analytics usually revolves around working on a dashboard.
- Descriptive Analytics: In descriptive analytics, you work based on the incoming data and for the mining of it you deploy analytics and come up with a description based on the data.
Working with Big Data Analytics
The topic of Data Analytics is a vast one and hence the possibilities are also immense. Prescriptive analytics ensures that it sheds light on various aspects of your business and provide you a sharp focus on what you need to do in terms of Data Analytics. Prescriptive analytics adds a lot of value to any organization, thanks to the specificity and conciseness of this domain. You can deploy prescriptive analytics regardless of the industry vertical based on the same rules and regulations.
Predictive analytics can also ensure that the domain of big data can be deployed for predicting the future based on the present data. A good example of predictive analytics is the deployment of analytical aspects to the sales cycle of an enterprise. It starts with the lead source analysis, analyzing the type of communication, the number of communications and the channels of communication, along with sentiment analysis through heightened use of Machine Learning algorithms and more in order to come up with a perfect predictive analysis methodology for any enterprise.
Diagnostic analytics is used for the specific purpose of discovering or determining why a certain course of action happened. For example, one can work with diagnostic analytics to review a certain social media campaign for coming up with the number of mentions for a post, the number of followers, page views, reviews, fans, and such other metrics to diagnose why a certain thing happened.
Descriptive analytics is the least popular which is basically used for coming up with a methodology for uncovering patterns that can add value to an organization. As an example, you can think about the credit risk assessment. It involves predicting how likely a certain customer is to default based on his credit history. It takes into consideration various aspects like the financial performance of the customer, inputs from past financial institutions that the person might have approached and other platforms like social media, and online presence based on the web-based solutions.
Since no organization today can stay without being inundated with data, it is imperative that Data Analytics is an indispensable part of the life cycle of data in any organization . Based on various types of Data Analytics, today’s forward-looking enterprises can actually go ahead and design a very robust path to success with the data they have.
‘If you torture the data long enough, it will confess.’ – Ronald Coase, Economist.
Data Analytics Tools
In this section, you will be familiarized with the tools used in the Big Data Analytics domain. Here is the list of analytical courses that you can take up for a better career in Big Data Analytics:
- Apache Spark: Spark is a framework for real-time Data Analytics which is part of the Hadoop ecosystem.
- Python: This is one of the most versatile programming languages that is rapidly being deployed for various applications including Machine Learning.
- SAS: SAS is an advanced analytical tool that is being used for working with huge volumes of data and deriving valuable insights from it.
- Hadoop: It is the most popular big data framework that is being deployed by the widest range of organizations from around the world for making sense of their big data.
- SQL: The structured query language (SQL) is used for working with relational database management systems.
- Tableau: This is the most popular Business Intelligence tool that is deployed for the purpose of data visualization and business analytics.
- Splunk: Splunk is the tool of choice for parsing the machine-generated data and deriving valuable business insights out of it.
- R Programming: R is the Number 1 programming language that is being used by Data Scientists for the purpose of statistical computing and graphical applications alike.
Watch this insightful video to learn more about the job role of a Data Analyst:
Role of Data Analyst
The role of a Data Analyst varies depending on the organization’s type and the extent to which they have adopted the data-driven decision-making processes. The responsibility of a Data Analyst typically includes the following:
- Creating appropriate documentation that would allow the stakeholders of the organization to understand the steps of the data analysis process and repeat the analysis if necessary.
- Demonstrating the significance of their work in the context of local, national, and global trends impacting both their organization and industry.
- Preparing reports for executives that will effectively communicate trends, patterns, and predictions using their relevant data.
- Collaborating with programmers, engineers, and organization leaders to identify opportunities for improving the process, recommending system modifications, and develop policies for data governance.
- Designing and maintaining data systems and databases which includes fixing errors in code and other data-related problems.
- Mining the data from sources and then reorganizing said data-related problems.
- Using statistics to interpret data sets, paying particular attention to trends and patterns that could be valuable for diagnostic and predictive analytics efforts.
Business Analytics vs Data Analytics
While both Business Analytics and Data Analytics involve the handling and manipulation of data and generating insights for the enhancement of business performance, there is a fundamental difference between the two.
When it comes to considering the larger business implications of data and the resulting business decisions, business analytics is the go-to solution. Business analytics implies a blend of skills, tools, and applications that enables businesses to monitor, measure, and improve the performance of core business functions like sales, customer service, marketing, or IT.
On the other hand, data analytics involves sifting through enormous volumes of datasets to unravel patterns and trends and draw conclusions to back business decisions with data-based insights. Data analysis attempts to answer questions surrounding the effectiveness of business decisions. The practice employs several diverse techniques and approaches involving Data Science, Big Data Analytics, Data Mining or Data Modeling.
Data Analyst vs Business Analyst
While both the Data Analysts and Business Analysts work with the data, the main difference lies in what do they do with it. Business Analysts use data to help organizations make more effective business decisions but in the contrast, Data Analysts are more interested in gathering and analyzing data for the business to evaluate and use to make decisions on their own.
In the simplest terms, data is a means to the end for business analysts, while data is the end for data analysts.
Data Analytics vs Data Analysis
The common misconception that Data Analysis and Data Analytics are the same can be debunked with the following distinction:
- Data analytics is a broad field that includes the use of data and tools to make sound business decisions.
- Data analysis, on the other hand, is a subset of data analytics and involves specific processes.
Let’s talk about the processes involved in each.
Data Analytics Process: –
Data Analytics includes many separate processes that comprise a data pipeline:
- Data collection and ingestion
- Classification of data into structured or unstructured forms and then, determining the next step
- Data management in databases, data warehouses, and/or data lakes
- Data storage in hot, warm, or cold storage
- Performing ETL (extract, transform, load)
- Data analysis to extract trends, patterns, and insights
- Data sharing to business users or consumers in a dashboard or via specific storage
Data Analysis Process: –
Data analysis consists of the process of data cleaning, data transformation, data modeling, and data questioning to extract useful information. Data analysis is usually limited to a single and already-prepared dataset. The data is inspected, arranged, and questioned.
Data Analytics Services in Different Fields
Following are some of the industries that were re-defined by Data Analytics:
Data Analytics in Finance
Big Data is used to track and monitor the movements in the financial market. Stock exchanges use Data Analytics to catch illegal trade practices in the stock market, banks, retail traders, hedge funds, and other aspects of the financial markets.
The finance industry relies heavily on Big Data Analytics for anti-money laundering purposes, “Know Your Customer”, fraud mitigation, and demand enterprise risk management.
Data Analytics in Healthcare
In recent years, data collection in the healthcare environment has become more streamlined. Data helps enhance daily operations and improve patient care. Both historical and current datasets can be used to track trends and make predictions.
Preventive measures and tracking outcomes are now possible with the use of Data Analytics. In cases where hospitalization is required, Data Analytics can help predict infection risks, deterioration, and re-admission, thereby, lowering expenses and improving patient care outcomes.
Data Analytics in Marketing
Data Analytics now plays a crucial part in Marketing. It aids in learning about customers and consumers with target precision. Some examples are the movie preferences on Netflix and learning about favorite food and items on e-commerce sites or food apps.
Data Analytics in HR
HR professionals have vast amounts of data in their possession but oftentimes, go unused. Using this data can help analyze human resource challenges and engage in HR Data Analytics. Just as analytics has revolutionized marketing, it has positively transformed HR too. It helps
- make smart data-driven decisions
- create HR intervention business cases
- test the effectiveness of interventions
- make the switch from an operational partner to a tactical or strategic partner
Data Analytics in IoT
The IoT market is predicted to reach $6.1 billion by 2024 as reported by Mordor Intelligence. As a result, the global market clearly seems to be in favor of IoT development and its economic potential. Combining IoT and Big Data, dubbed as Io T Data Analytics, is a major contributing component to its growth.
It was extremely challenging and expensive to analyze massive volumes of data even a decade ago. But, with time, the cost of storing data has gone down considerably, and data analytics is making huge leaps in this segment creating favorable conditions in IoT. Businesses have started to invest in IoT use cases related to Data Analytics.
Corporate giants like Microsoft, Amazon, GE, Salesforce, and SAP are already implementing Data Analytics in IoT.
Data Analytics for Business
Data Analytics in business employs a specific set of techniques, procedures, and competencies to effectively make use of past and current business data. The purpose of doing so is to obtain insights about a business and encourage improved decision-making.
Data analytics can help a business in major aspects like personalizing a marketing pitch for a customer or identifying and mitigating business risks.
Companies Using Data Analytics
Today, regardless of the industry type, there is rapid deployment of various analytical tools and technologies. It could be the tools for parsing data or the easy-to-understand visualization tools which are used for making sense of the data. Further in this blog, some of the industries that are using Data Analytics tools are discussed.
There are digital-first enterprises for whom data analytical tools are the most important weapons in their arsenal. For example, Amazon, Facebook, Google, and Microsoft cannot survive without the use of Data Analytics. Amazon widely deploys analytics in order to recommend you the right product based on the product that you bought in the past. They also make use of data in order to build customer profiles to serve them better. This way, they can provide a very customized experience to their customers.
A company like Facebook will deploy Data Analytics to find out what its users are talking about so that it can understand what products and services the users would be interested in. Since it works on ads, it needs to know the pulse of its users by making sure that the ads are up to date in terms of customization and other aspects.
Google is sitting on the mother lode of all data. They serve a few billion searches every day making it one of the most data-intensive companies on planet Earth. Due to this, the need for analytical tools at Google is inevitable. Google is also hiring the maximum number of Data Scientists.
How to Become a Data Analyst
Becoming a data analyst requires both academic qualifications and skills. Let us see these in detail below.
It is recommended to have a graduation degree from a data analysis program with a high CGPA. Even if a person doesn’t have a specialization in data analysis, having a degree in mathematics, statistics, or economics from a well-reputed university, can land an entry-level Data Analyst job.
Most entry-level data analyst jobs require at least a bachelor level degree, Higher level data analyst jobs usually guarantee higher pay and may require to have a master’s degree. Apart from the degree, the person interested in becoming a Data Analyst enroll in online courses if they are interested in that.
Programming Languages: A Data Analyst must be proficient in at least one programming language. The programming languages that can be used to manipulate data are R, Python, C++, Java, MATLAB, PHP, and more.
Data Management and Manipulation: A Data Analyst must be familiar with languages such as R, HIVE, SQL, and more. Building queries to extract the desired data is an essential part of Data Analytics. A Data Analyst must create accurate reports and he should have knowledge about standard tools like SAS, Oracle Visual Analyzer, Microsoft Power BI, Cognos, Tableau, etc for doing that.
A Data Analyst must provide detailed and accurate information to the management. Hence, data analysts must understand the specific user requirements, along with having a deep understanding of the data. Excellent communication skills are essential for collaborating with others to ensure that the data aligns well with the objectives.
Mathematical Ability: A Data Analyst must have a knowledge of statistics and be comfortable with formulae required for analyzing data to provide real-world value. As a Data Analyst, one must have a good grasp of mathematics and be able to solve common business problems also, a Data Analyst must know how to to use tables, charts, graphs, and more. It is essential to be comfortable with college-level algebra, thereby making visualization of data more appealing. Knowing linear algebra and multivariate calculus is very helpful for Data Analysts.
Microsoft Excel: Organizing data and collecting numbers are among the main tasks of Data Analysts. Hence it is beneficial if a Data Analyst is comfortable with using Excel.
Watch this video on Data Analysis with Python Tutorial
Career Scope in Data Analytics
A Data Analyst can expect great pay, interesting work, and excellent job security. This career is constantly changing, always different, and involves lots of attention to detail and focusing on quality. A career in Data Analytics also affords outstanding opportunities for advancement.
Data Analyst is definitely an upwardly mobile position. The difference between securing mid- and senior-level depends on the experience and additional education. But because there is such high demand for Data Analysts at any level, the projected job growth is positive for each tier over the next decade ranging from 5% as a Financial Analyst to 25% as an Operations Research Analyst.
Of course, the specific growth rate depends on the role, industry and education can influence the salary of a Data Analyst.
Data Analytics is one of the vital aspects that is driving some of the biggest and best companies forward, today. Enterprises that can convert data into meaningful insights would evidently be the winners in this hyper-competitive world. Take Uber and Airbnb, for example. Uber has disrupted the taxi hailing business and Airbnb the hospitality domain. For Uber, the key to a growth of $51 billion is the big data it collects and leverages for intelligent decision-making with the help of Data Analytics. Whereas, Airbnb has been using Data Analytics tools mainly to bring out better user experience. Both these organizations are thriving for a consistent growth with the power of their deep data analytical approach. Hence, any company harnessing the benefits of Data Analytics can beat its competitors without a hitch.
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