What is data analytics?

Data analytics converts raw data into actionable insights. It includes a range of tools,
technologies, and processes used to find trends and solve problems by using data. Data
analytics can shape business processes, improve decision-making, and foster business growth.

Why is data analytics important?

Data analytics helps companies gain more visibility and a deeper understanding of their
processes and services. It gives them detailed insights into the customer experience and
customer problems. By shifting the paradigm beyond data to connect insights with action,
companies can create personalized customer experiences, build related digital products,
optimize operations, and increase employee productivity.

What is big data analytics?

Big data describes large sets of diverse data—structured, unstructured, and semi-structured—
that are continuously generated at high speed and in high volumes. Big data is typically
measured in terabytes or petabytes. One petabyte is equal to 1,000,000 gigabytes. To put this
in perspective, consider that a single HD movie contains around 4 gigabytes of data. One
petabyte is the equivalent of 250,000 films. Large datasets measure anywhere from hundreds
to thousands to millions of petabytes.

Big data analytics is the process of finding patterns, trends, and relationships in massive
datasets. These complex analytics require specific tools and technologies, computational
power, and data storage that support the scale.
How does big data analytics work?

Big data analytics follows five steps to analyze any large datasets:
1. Data collection
2. Data storage
3. Data processing
4. Data cleansing
5. Data analysis

Data collection
This includes identifying data sources and collecting data from them. Data collection follows ETL
or ELT processes.

ETL – Extract Transform Load

In ETL, the data generated is first transformed into a standard format and then loaded into
storage.
ELT – Extract Load Transform
In ELT, the data is first loaded into storage and then transformed into the required format.
Data storage
Based on the complexity of data, data can be moved to storage such as cloud data warehouses
or data lakes. Business intelligence tools can access it when needed.

Comparison of data lakes with data warehouses

A data warehouse is a database optimized to analyze relational data coming from transactional
systems and business applications. The data structure and schema are defined in advance to
optimize for fast searching and reporting. Data is cleaned, enriched, and transformed to act as
the “single source of truth” that users can trust. Data examples include customer profiles and
product information.

A data lake is different because it can store both structured and unstructured data without any
further processing. The structure of the data or schema is not defined when data is captured;
this means that you can store all of your data without careful design, which is particularly useful
when the future use of the data is unknown. Data examples include social media content, IoT
device data, and nonrelational data from mobile apps.Organizations typically require both data
lakes and data warehouses for data analytics
Data processing
When data is in place, it has to be converted and organized to obtain accurate results from
analytical queries. Different data processing options exist to do this. The choice of approach
depends on the computational and analytical resources available for data processing.

Centralized processing
All processing happens on a dedicated central server that hosts all the data.

Distributed processing
Data is distributed and stored on different servers.

Batch processing
Pieces of data accumulate over time and are processed in batches.

Real-time processing
Data is processed continually, with computational tasks finishing in seconds.

Data cleansing
Data cleansing involves scrubbing for any errors such as duplications, inconsistencies,
redundancies, or wrong formats. It’s also used to filter out any unwanted data for analytics.

Data analysis
This is the step in which raw data is converted to actionable insights. The following are four
types of data analytics:

1. Descriptive analytics
Data scientists analyze data to understand what happened or what is happening in the data
environment. It is characterized by data visualization such as pie charts, bar charts, line graphs,
tables, or generated narratives.
2. Diagnostic analytics
Diagnostic analytics is a deep-dive or detailed data analytics process to understand why
something happened. It is characterized by techniques such as drill-down, data discovery, data
mining, and correlations. In each of these techniques, multiple data operations and
transformations are used for analyzing raw data.

3. Predictive analytics
Predictive analytics uses historical data to make accurate forecasts about future trends. It is
characterized by techniques such as machine learning, forecasting, pattern matching, and
predictive modeling. In each of these techniques, computers are trained to reverse engineer
causality connections in the data.

4. Prescriptive analytics
Prescriptive analytics takes predictive data to the next level. It not only predicts what is likely to
happen but also suggests an optimum response to that outcome. It can analyze the potential
implications of different choices and recommend the best course of action. It is characterized
by graph analysis, simulation, complex event processing, neural networks, and
recommendation engines.
What are the different data analytics techniques?
Many computing techniques are used in data analytics. The following are some of the most
common ones:

Natural language processing

Natural language processing is the technology used to make computers understand and
respond to spoken and written human language. Data analysts use this technique to process
data like dictated notes, voice commands, and chat messages.

Text mining
Data analysts use text mining to identify trends in text data such as emails, tweets, researches,
and blog posts. It can be used for sorting news content, customer feedback, and client emails.

Sensor data analysis

Sensor data analysis is the examination of the data generated by different sensors. It is used for
predictive machine maintenance, shipment tracking, and other business processes where
machines generate data.

Outlier analysis
Outlier analysis or anomaly detection identifies data points and events that deviate from the
rest of the data.
Can data analytics be automated?
Yes, data analysts can automate and optimize processes. Automated data analytics is the
practice of using computer systems to perform analytical tasks with little or no human
intervention. These mechanisms vary in complexity; they range from simple scripts or lines of
code to data analytics tools that perform data modeling, feature discovery, and statistical
analysis.
For example, a cybersecurity firm might use automation to gather data from large swathes of
web activity, conduct further analysis, and then use data visualization to showcase results and
support business decisions.

Can data analytics be outsourced?

Yes, companies can bring in outside help to analyze data. Outsourcing data analytics allows the
management and executive team to focus on other core operations of the business. Dedicated
business analytics teams are experts in their field; they know the latest data analytics
techniques and are experts in data management. This means that they can perform data
analysis more efficiently, identify patterns, and successfully predict future trends. However,
knowledge transfer and data confidentiality could present business challenges in outsourcing.

Data analytics improves customer insight

Data analytics can be conducted on datasets from various customer data sources such as the
following:
• Third-party customer surveys
• Customer purchase logs
• Social media activity
• Computer cookies
• Website or application statistics
Analytics can reveal hidden information such as customer preferences, popular pages on a
website, the length of time customers spend browsing, customer feedback, and interaction
with website forms. This enables businesses to respond efficiently to customer needs and
increase customer satisfaction.

Data analytics informs effective marketing campaigns

Data analytics eliminates guesswork from marketing, product development, content creation,
and customer service. It allows companies to roll out targeted content and fine-tune it by
analyzing real-time data. Data analytics also provides valuable insights into how marketing
campaigns are performing. Targeting, message, and creatives can all be tweaked based on real-
time analysis. Analytics can optimize marketing for more conversions and less ad waste.

Data analytics increases operational efficiency

Data analytics can help companies streamline their processes, reduce losses, and increase
revenue. Predictive maintenance schedules, optimized staff rosters, and efficient supply chain
management can exponentially improve business performance.

Data analytics informs product development

Organizations use data analytics to identify and prioritize new features for product
development. They can analyze customer requirements, deliver more features in less time, and
launch new products faster.

Data analytics supports the scaling of data operations

 Data analytics introduces automation in several data tasks such as migration, preparation,
reporting, and integration. It removes manual inefficiencies and reduces the time and man
hours required to complete data operations. This supports scaling and lets you expand new
ideas quickly.
How is data analytics used in business?
Businesses capture statistics, quantitative data, and information from multiple customer-facing
and internal channels. But finding key insights takes careful analysis of a staggering amount of
data. This is no small feat. Look at some examples of how data analytics and data science can
add value to a business.

Data analytics improves customer insight

Data analytics can be conducted on datasets from various customer data sources such as the
following:
 Third-party customer surveys
 Customer purchase logs
 Social media activity
 Computer cookies
 Website or application statistics
Analytics can reveal hidden information such as customer preferences, popular pages on a
website, the length of time customers spend browsing, customer feedback, and interaction
with website forms. This enables businesses to respond efficiently to customer needs and
increase customer satisfaction.

Data analytics informs effective marketing campaigns

Data analytics eliminates guesswork from marketing, product development, content creation,
and customer service. It allows companies to roll out targeted content and fine-tune it by
analyzing real-time data. Data analytics also provides valuable insights into how marketing
campaigns are performing. Targeting, message, and creatives can all be tweaked based on real-
time analysis. Analytics can optimize marketing for more conversions and less ad waste.

Data analytics increases operational efficiency

Data analytics can help companies streamline their processes, reduce losses, and increase
revenue. Predictive maintenance schedules, optimized staff rosters, and efficient supply chain
management can exponentially improve business performance.

Data analytics informs product development

Organizations use data analytics to identify and prioritize new features for product
development. They can analyze customer requirements, deliver more features in less time, and
launch new products faster.

Data analytics supports the scaling of data operations

Data analytics introduces automation in several data tasks such as migration, preparation,
reporting, and integration. It removes manual inefficiencies and reduces the time and man
hours required to complete data operations. This supports scaling and lets you expand new
ideas quickly.