In the golden age of information, data is everywhere. The words you type into google, the time you spend watching videos on YouTube, even how often you visit your favourite shop, data is constantly being collected, interpreted, and analysed all around us.
The ability to make the most out of the data will enable you to create success in all walks of life, from general decision making, improving your health or even starting your own business. The possibilities that arise from analysing data are endless, but just what is data analysis, and why is it important?
What is data analysis?
Data analysis is the process by which data is collected, analysed, and interpreted to extract useful information that can assist in decision-making situations. Businesses can use multiple methods and techniques to analyse data; determining which is the best possible method for you depends on the nature of your decision. This may sound overwhelming, but this article will provide you with examples of how you can apply data analysis and make the most out of the decisions you make.[st1]
Why is data analysis important?
Data analysis enables you to see the whole picture. By interpreting information meaningfully, you allow yourself to remove the risk of guessing and assuming out of your work and ultimately make a more educated and precise decision. Below, this article details several examples of how you could use data analysis to improve your decision-making process and better your position in life.
Examples of the applications of Data analysis
Example 1) – Online E-commerce Business
Let’s say you are running an e-commerce business that sells an extensive range of products; you could guess which products are currently popular among consumers, purchase these goods and hope the products will sell. This is an option, but is it the best option? By trying to guess which products are going to sell, you are opening yourself to unnecessary risk. On the other hand, you could use analytical data tools to search the online retail market and find out:
- which products are currently most popular with consumers,
- which products have the highest profit margins,
- You could determine which products are being over-sold and which products are being undersold or
- You can find how much other similar sellers are paying in advertisement to get their products sold.
By knowing all of these things, you are putting yourself in a stronger position to decide which items you will sell and how much you are going to charge. You are giving yourself a competitive advantage over other sellers by understanding the market. In summary, you are not only reducing your risk, but you are putting yourself into a stronger decision-making position, and how? By using data analysis.
Example 2) – Improving Your Health
Many people in life seek to improve their physical health; whether this is through dietary plans, physical workouts or by cutting out harmful products and practices, almost everyone is aware of ways to improve their health. For those many people who seek to improve their health, they may not be aware that they are probably already using either data analysis or data analysis products to do so. If you are counting the calories of a chocolate bar, you are using data analysis; you are collecting data (the calorific content), interpreting the data (seeing if it is in line with your daily calorie consumption), and based on that information, making a decision about whether you should eat the chocolate. Although this may be an elementary form of data analysis, it illustrates how even simple data can benefit you. Maybe you enjoy working out; if you do, you probably follow a workout plan; this workout plan will have been produced as a data analysis product. By determining which combination of exercises will be most effective in either burning fat, burning calories, or increasing muscle mass, it is possible to produce a workout plan that will be the most efficient method of giving you what you need. This is an example of how interpreting data can enable you to produce a process that will provide the most efficient outcome, allowing you to save yourself precious time, money and effort.
Example 3) – Deciding which job to take.
As many of you will know, applying to jobs can be tiresome; not only is the process of becoming employed difficult but trying to determine where you should work, who you should work for and how much you should be paid can be strenuous tasks. Of course, as many people do, you can apply to as many listings as possible, regardless of location or company but will this land you a job that fits your needs? Probably not. However, using data analysis to refine your search will save you significant time, effort and will most likely lead to you taking a job that is more suited to your needs. To make the most out of your job, you should first determine what skills you possess and what jobs this skill set matches. You may already know which area you want to work in; if so, you should determine what the average salary for such a position is. By deciding this, you can refine the search criteria of available positions such that you will be paid according to the value you bring (nobody should be underpaid!). Once you have determined which jobs you will apply to, you should seek to find a company that meets your needs. Remember, data analysis is not just about numbers; look to find company reviews on websites such as glass door or Indeed and use this to gauge how well you fit into the company ethos. You can only enjoy working in a company which suits you. Sites such as Glassdoor provide you with all the information you could need when looking for a job. By finding and interpreting all the relevant information, appropriate salary, company reviews, company ethos and the best location for a job, you can seek jobs tailored to your standards and needs. Removing the trial and error process out of job hunting will ultimately lead to finding a job that suits you.
Can’t decide between two jobs? Check out this video from MIT on the applications of utility theory on searching for jobs – the video details how an economic principle, based upon how certain factors affect your happiness (utility), can help you determine the best choice. – https://www.youtube.com/watch?v=tCKk22kaZi4
The beauty of data analysis comes from its ability to enable you to make your own choice based upon the evidence in front of you; it may sound cliché, but the data doesn’t lie. The decisions you make based on data will be stronger than the guesses you would otherwise make.
Hopefully, this article has shown you just how critical data analysis is and how useful it can assist your thought processes. The examples in this article should illustrate how data analysis is not just a complex process used by mathematicians and scientists but also a fundamental tool in decision-making that has applications to nearly every choice you will make.
Remember, when incorrectly analysed, data can be misleading. If you want to learn the process of data analysis so you can make your own decisions, check out this article on the process and techniques of data analysis method of data analysis