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People have always understood the power of decision-making. In business, the right decision can make your profit graph higher than ever, while a single wrong decision might ruin months and years of progress. The valuable skill of decision-making started being backed up by data since data analysis became accessible to everyone.  

In the last few decades, the global economy has been quite impacted by data-driven decision-making. Data analysts and business analysts have made significant contributions to the current state of the economy. With technological advancements, or to be specific, the introduction of artificial intelligence and data analysis has also evolved for the better. In this blog, we shall discuss the approaches or types of data analysis.  

What is Data Analysis? 

Data analysis is the process of gathering, preparing, organizing, and extracting important information from data. This process helps in converting raw data into business insights, which are useful for creating effective strategies and decision-making. It is a complex process involving many methodologies and techniques that interpret data from different sources and formats.  

For business owners, data analysis can help them with their large amount of customer data. This can be their purchase history, preferences, patterns, etc. Data analysis can help you gain insights into your business, like which product is best-selling, what causes customer churn, and what marketing strategy will work best for you. In short, data analysis will provide you with the information concealed in the heaps of your data. From product-based businesses to service-based, every organization can use data analysis as a powerful business tool.  

What Data Analysis Does For Businesses? 

Human predictions may have belief-based biases or a limit to the data they will consider. Modern data analysis is way more advanced and can help explore undefined, hidden patterns in a dataset. Now that we have access to AI-powered data analytics, it provides data-driven, evidence-based support for practical and effective decision-making. The major reasons why businesses need data analysis services are: 

Data Driven Decision Making 

Customer Behavior Insights 

Operation Efficiency by time and cost saving 

Risk Reduction 

Personalized Marketing with Improved ROI 

Types of Data Analysis 

Data analysis is a complex, multiphase process that uses multiple approaches for extracting specific information from data. These approaches are often called types of data analysis. Let us see each of them in brief. 

Descriptive Analysis 

Descriptive analysis is a report of what happened in the past. It is a summary of all the business data, like sales reports, customer acquisitions, customer churn, inventory, and everything else that happened in the past month or past year. The best example is the Spotify wrap at the end of the year that tells you which artists, songs, and albums you listened to and how many times. It is evidence of what is happening in your organization with solid data reports.  

Diagnostic Analysis 

While descriptive analysis gives a report of what happened in the past, the diagnostic approach finds out the reason behind those events. For example, if your product sales increased in the past month, a diagnostic approach is used to find out the reason for that increase. The same can be applied to losses or customer churn. This approach allows organizations to look out for repeating their mistakes, or continue what is working well with their customers.  

Predictive Analysis 

A predictive analytical approach analyzes past and present data to predict what is most likely to happen in the future. Unlike the predictions we know about, these are completely data-driven and more reliable. This approach is especially helpful when you have to tackle a future problem. It helps reduce risks, improve handling shocks, and also helps us interpret the consequences of a hypothetical situation. Thus, making decision-making better.  

Prescriptive Analysis 

Prescriptive analysis is one of the most advanced approaches to data analysis. This approach allows stakeholders and business owners to analyze the corrective measures or improvements for their businesses. The process works as a business advisor and provides actionable measures that, if implemented, can solve issues or improve profits.  

Conclusion 

Data analysis is an important and powerful business tool that can make a significant difference to any business or organization. The major benefits of data analysis include customer retention, an increase in ROI from marketing, streamlined operations, debottlenecking, and faster decision-making. Data analysis might be a complex process, but it can ease a lot of things for businesses. Thus, get in touch with AnavClouds Analytics.ai for a detailed consultation regarding your business’s data analysis. Our data experts will provide you with the best solutions, giving your business the data-driven boost it needs for exponential growth. Contact us today and book your demo.  

Source: https://www.anavcloudsanalytics.ai/blog/data-analysis-complete-guide/