Types of Data Analysis

Question 1

Analysis of Data

Answer 1

• Data used effectively leads to a better understanding of a business’s performance and decision-making for its future activities.
• Four types of data analytics are used in all industries. - The difficulty and resources needed increase while ascending the types, and each level yields more value and insight than the former.

Question 2

Descriptive Analytics

Answer 2

• The “what happened.”
• simple, surface-level analysis of the past.
• Data is gathered/summarized (aggregation) and then “mined” to find patterns.
  *Ex. KPI Dashboards, Monthly revenue reports, sales lead overview

Question 3

Diagnostic Analytics

Answer 3

• The “why something happened.”
• Anomalies are identified and explained with the help of outside sources (Discovery Phrase).
• Relationships that correlate or correspond with the anomaly are identified. (typically uses probability theory, regression analysis, time-series analytics, and filtering)
  *Ex: A freight company investigates the cause of slow shipments in a region.

Question 4

Predictive Analytics

Answer 4

• The what is likely to happen - NOT guesswork.
  -Predictions are based on probability theory and historical data.
• Used to create actionable insights to make better business decisions, helping businesses ‘hit the mark.’.
  *Ex: Risk assessment, sales forecasting.

Question 5

Prescriptive Analytics

Answer 5

advises on the actions and decisions that should be taken by combining the insights from the previous analyses.
- Considers the possible scenarios and assesses the different actions the company may take
- Acts as the bottom line.
- Complex (involves machine learning, algorithms, and computational modeling procedures).
*Ex: AI consumes large amounts of data to learn from it and use it to make informed decisions.