Data analysis involves reviewing large amounts of data to draw conclusions and identify patterns. It is used in business, economics, and academia. Different methods of analysis exist, and companies develop their own methods to solve problems. Computer programs and algorithms can help identify abnormalities in data.
Data analysis refers to the process of reviewing large amounts of raw or disorganized data to formulate conclusions from the data. It is often used in business to generate action plans or to identify patterns and trends in the business and help companies better understand customer behavior. It is also used by economists and academic professionals in many disciplines to help formulate, support, or refute theories.
In many situations, large amounts of data are collected to be studied. For example, economists may receive thousands of survey responses, or they may analyze countless amounts of government and census data on large segments of the population. Other academics may also receive numerous large bodies of disorganized information; for example, a scientist studying a possible cure for cancer may receive the results of hundreds or even thousands or millions of patients. In business, data can also be collected in the form of sales data, customer receipts, transactions, or other types of information.
All of this data provides information and likely contains patterns and trends that can help shape and govern behavior. To use the information, however, the data must be organized, analyzed and understood. Data analysis refers to the process of organizing and analyzing all this data.
Just as there are many different types and sources of data, there are many different methods of analysis. Some data must be manually organized and manually coded. Other large databases of information can be analyzed through specialized computer programs that make the data analysis process streamlined and straightforward.
The process and procedure of data analysis depends not only on how the data is organized, but also on what a person is looking for. For example, an economist might examine the data to find buying or spending patterns that explain behavior. A company can examine the data to identify weaknesses in a customer’s supply chain or problems with a particular employee.
Each company usually develops its own data analysis methods that allow it to solve the problems that a company has. A health insurance company, for example, might have a database of millions of paid claims. Employees in charge of data analysis would be responsible for generating and running algorithms to detect possible abnormalities. Computer program and algorithms can therefore be run to identify areas where false claims may have been paid which should be investigated.
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