What’s data reduction?

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Data reduction involves analyzing and transforming large amounts of data into summary reports for easy use in corporate settings. This process involves organizing, prioritizing, and formatting data, which can now be done faster with software packages. Data reduction is important for creating efficiency and production reports and demonstrating potential to investors.

Data reduction is a term that applies to the business practice of accumulating, analyzing, and ultimately transforming massive amounts of data into a series of summary reports. The idea behind the data reduction process is to provide a comprehensive yet somewhat simplified format that can be used with relative ease in corporate settings. Several different approaches to the process can be used, with data reduction techniques and systems being selected based on the nature of the data and how such summary reports need to be structured in order to provide a complete and comprehensive representation of those data.

One of the main activities in any type of data reduction effort is organizing all the data collected for the purpose. Sometimes this part of the process focuses on establishing some sort of order for the data which involves prioritizing it consistently, using well-defined criteria to make the task easier. Depending on the type of data involved, it is not uncommon to include some rounding of certain figures in order to make the information easier to use when summarizing. Finally, the arrangement of data in tables, columnar reports, or other types of labeling or formatting may be required to allow report recipients to follow the logistics of simplified information with relative ease.

In the past, the process of analyzing available data, prioritizing and organizing information into useful formats was done manually. Depending on the amount of data involved and the target audience for that data, the process could take months or even years. Thanks to the creation of software packages today designed to handle data in a variety of formats, reports can be prepared in days or weeks. Most types of software can pull information from a number of different databases and assist in the sorting process, making it much easier and faster to prepare simplified data that is both useful and easy to understand.

Using data-editing methods to streamline information for presentation in easy-to-read reports is important for businesses of all sizes. The data reduction systems used can assist in the preparation of efficiency and production reports which are useful for managers or help the sales force better understand the effectiveness of the current sales campaigns or procedures required by the business. Editing and coding data can also prove useful when it comes to demonstrating to investors the potential associated with a new product launch.




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