How much do you know about data analytics? Specifically, how aware are you of its many applications in day-to-day situations? This article explores a sample of today’s typical data analytics applications, defines the term, calls out some popular tools, and finishes with an immersive data analytics program you can take to gain the right skills.
So, before we show how pervasive data analytics is today, let’s define the term and break down the four types.
What is Data Analytics?
Data analytics involves collecting, organizing, and analyzing data to draw meaningful insights and trends. It allows organizations to discover valuable information to foster informed decision-making and improve business outcomes. Additionally, data analytics employs different techniques and tools to process unstructured and structured data, discover hidden patterns, and provide actionable recommendations.
The Four Types of Data Analytics
All forms of data analytics fall under one of the following four categories.
Descriptive Analytics
Descriptive analytics asks the question, “What has happened?” Descriptive analytics looks backward, not forward, providing a comprehensive picture of previous events unfolding. The chief benefit of descriptive data analysis is that it helps data analysts understand what happened and why. Typical examples include:
- Dashboard reporting
- Fraud detection
- Product demand forecasts
- Sales performance
Diagnostic Analytics
Diagnostic analytics asks the question, “Why did this happen?” It examines the factors leading to an event to explain why the issue occurred. This form of analysis helps organizations understand what happened, why, and how the incident can be prevented from happening again. Popular examples of diagnostic analytics include:
- Drill-down
- Regression analysis
- Retrospective analysis
- Root cause analysis
Predictive Analytics
Predictive analytics asks the question, “What is going to happen in the future?” Predictive analysis uses existing data to predict future outcomes and trends. Organizations commonly use predictive analytics when they develop new products or services because it gives them a reasonable estimate of their customer’s future needs and wants based on past behavior. Examples of these analytics include:
- Customer Pricing
- Direct Marketing
- Retail Sales Forecasting
Prescriptive Analytics
Prescriptive analysis asks the question, “What should we do?” This analysis type takes predictive analytics a step further by using past data and trends to suggest future actions. This type of data analysis is particularly helpful in optimizing resources and uncovering new business opportunities. Additionally, prescriptive analytics can be used to make decisions or offer recommendations that allow others to make better decisions and do it faster. For example, a prescriptive model can recommend whether an organization should:
- Bid on a new project, and the asking price
- Build a new manufacturing plant or close an existing one
- Hire extra staff for a particular department
- Initiate a new product line or discontinue a current one
- Send a targeted ad to a chosen group of customers
Now that we know all we need to know about data analytics, let’s look at some popular data analytics applications.
Data Analytics Applications in Industry
Data analytics offers plenty of benefits to many of today’s sectors (commercial, government, financial). Here’s a sample of eleven typical data analytics applications.
- Banking. Banks employ data analytics to manage risks, gather insights into customer behavior, and personalize financial services. Using data analytics, banks and credit card companies can customize their offerings, identify potential fraud, and assess potential client creditworthiness by analyzing customer demographics, transaction data, and credit histories. Data analytics also helps banks spot money laundering activities and boost regulatory compliance.
- Cybersecurity. Data analytics is pivotal in cybersecurity by detecting and preventing cyber-attacks and similar threats. Security systems analyze user behavior, network traffic, and system logs to locate anomalies and possible security breaches. By leveraging data analytics, businesses and other organizations can proactively enhance their security measures, detect threats, respond to them in real-time, and protect sensitive data.
- E-commerce. E-commerce platforms use data analytics to understand customer behavior, optimize marketing campaigns, and personalize shopping experiences. E-commerce companies offer personalized product recommendations, target specific customer segments, and improve customer satisfaction and retention by analyzing customer preferences, purchase histories, and browsing patterns.
- Finance. Data analytics plays a vital role in investment strategies, fraud detection, and risk assessment. Banks and other financial institutions analyze vast volumes of data to predict creditworthiness, spot suspicious transactions, and optimize their investment portfolios. Data analytics allows finance companies to offer personalized financial advice and develop creative financial products and services.
- Healthcare. Data analytics positively changes the healthcare industry by offering better patient care, disease prevention, and resource optimization. Hospitals can analyze patient data to spot high-risk individuals and provide personalized treatment plans. Data analytics also helps find disease outbreaks, monitor treatment effectiveness, and improve healthcare operations.
- Internet Searches. Data analytics powers Internet search engines, letting users find relevant information accurately and quickly. Search engines analyze colossal amounts of data (e.g., web pages, user queries, click-through rates) to deliver the most relevant search results. Additionally, data analytics algorithms continuously learn and adapt to individual user behaviors, providing increasingly accurate and personalized search results.
- Logistics. Data analytics is essential in managing fleet operations, optimizing transportation routes, and improving overall supply chain efficiency. Logistics companies can reduce delivery times, minimize costs, and increase demand forecasting, inventory management, and customer satisfaction by analyzing delivery times, routes, and vehicle performance data.
- Manufacturing. Data analytics revolutionizes manufacturing by optimizing production processes, improving predictive maintenance, and enhancing product quality. Data analytics allows manufacturers to analyze sensor data, machine performance, and historical maintenance records to predict equipment failures, minimize downtime, and guarantee efficient operations. Data analytics also allows manufacturers to monitor production lines in real time, leading to higher productivity and savings.
- Retail. Data analytics is changing the retail industry by optimizing pricing strategies, offering insights into customer preferences, and improving inventory management. Retailers can use customer feedback, analyze sales data, and market trends to identify popular products, personalize offers, and forecast future demand. Data analytics helps retailers improve their marketing efforts, increase customer loyalty, and optimize store layouts.
- Risk Management. Risks are common in the commercial world, and data analytics is essential in risk management across many industries, such as finance, insurance, and project management. Organizations can use data analysis to assess risks, develop sound mitigation strategies, and make informed decisions by analyzing market trends, historical data, and external factors.
- Supply Chain Management. The recent global pandemic has cast supply chains in a new light. Consequently, data analytics improves supply chain management by reducing costs, optimizing inventory levels, and enhancing overall operational efficiency. Using data analytics, organizations can analyze supply chain data to forecast demand, identify bottlenecks, and improve logistics and distribution processes. Data analytics also enhances transparency throughout the supply chain.
Popular Data Analytics Tools
The right tools are an essential part of practicing data analytics successfully. Here’s a small sampling of some popular data analytics applications.
- Excel. Microsoft Excel is one of the oldest, most well-known software applications for data analysis. In addition to providing spreadsheet functions to manage and organize vast data sets, Excel offers graphing tools and computing capabilities such as automated summation (AutoSum). Excel also includes the Analysis ToolPak, which includes data analysis tools that perform regression, variance, and statistical analysis. Furthermore, Excel’s versatility and simplicity make it a robust data analysis tool ideal for sorting, filtering, cleaning, managing, analyzing, and visualizing data. Every aspiring data analyst should be proficient in Excel.
- Jupyter Notebook. Jupyter Notebook is a web-based interactive environment where data analysts can share computational documents or “notebooks.” Data analysts use Jupyter Notebooks to clean data, write and run code, conduct data visualization, perform machine learning and statistical analysis, and function with many other kinds of data analysis. Furthermore, Jupyter Notebook lets analysts merge data visualizations, code, comments, and various programming languages into one place to document the data analysis process better and share it with other teams or stakeholders.
- MySQL. MySQL is a popular open-source relational database management system (also called RDBMS) that stores application data, primarily web-based. Popular websites like Facebook, Twitter, and YouTube have used MySQL. Structured Query Language (or SQL) is most often used for relational database management system management, typically employing relational databases often structured into tables. Learn MySQL if you plan on working on the technical side of web applications.
- Python. Python is consistently ranked as one of the most popular programming languages in the world. Unlike other programming languages today, Python is relatively simple to learn and can be employed in many different tasks, including software, web development, and data analysis. Data analysts use Python to streamline, analyze, model, and visualize data using built-in analytics tools. Python also offers data analytics professionals access to libraries like Pandas and Numpy, which provide powerful analytics-related tools. Python is another application that new data analysts should be highly familiar with.
- R. R is an open-source programming language typically used for statistical computing and graphics. R is regarded as a relatively easy-to-learn programming language like the Python above. R is usually used for data visualization, statistical analysis, and data manipulation. Additionally, R’s statistical focus makes it well-suited for statistical calculations. In contrast, the included visualization tools make it the ideal language for creating compelling graphics such as graphs and scatter plots. Along with Python, R is one of the most essential programming languages data analysts use.
- Tableau. Tableau is a data visualization application for business analytics and business intelligence. Tableau is one of the most popular data visualization platforms in today’s business world, mainly because it boasts an easily understood user interface and smoothly turns data sets into understandable graphics. Business users like Tableau because it’s easy to use, and data analysts like it because it has powerful tools that perform advanced analytics functions like cohort analysis, predictive analysis, and segmentation. Data visualization is vital because it lets data analysts convey their findings to colleagues and stakeholders who might need help understanding them.
Acquiring Data Analytics Skills
If you want to get certified, consider this 44-week online post graduate program in data analytics. You will learn about data analytics applications and tools, prompt engineering, ChatGPT, and generative AI skills while you earn your program completion certificate.
Indeed.com reports that data analysts could make a yearly average salary of $76,787. So, if you’re a data analyst who wants to upskill or a non-analyst who wants to change careers, consider this highly informative online certification bootcamp.
