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Data Analysis Demystified: A Beginner’s Guide To Understanding The Core Concepts

Data Analysis Demystified


Data analysis is the activity of data preparation, analysis, and interpretation to make beneficial decisions and produce new competitive advantages. This comprises employing the statistical techniques that are commonly used. Electronic data are analyzed using machine learning and natural language processing. And more to have a better understanding of your data.

What is Data Analysis?

Data analysis is the process of inspecting, cleaning, transforming, and processing raw data using various statistical and logical methods and techniques to conclude and solve problems or decision-making. After collecting data from a sample, data is organized, described, and summarized using descriptive statistics (mean, median, mode, standard deviation, range, etc.)

Types of Data Analysis:

a. Descriptive Analysis:

Descriptive analysis involves describing the main characteristics of data. Measure of frequency (Count, Percent, Frequency), measure of central tendency (Mean, Median, Mode), measures of dispersion or variation (Range, Variance, Standard deviation).

b. Inferential Analysis:

It helps to determine whether a certain relationship or pattern observed in a sample is likely to be present in the entire population.

c. Diagnostic Analysis:

Diagnostic analysis is used to understand the cause-and-effect relationships in the data. It investigates the factors/variables that contribute to specific outcomes. Techniques e.g. regression, correlation & ANOVA (Analysis of Variance) are usually used in the diagnostic analysis.

d. Predictive Analysis:

Predictive analysis uses statistical models & algorithms to predict future outcomes and trends based on historical data. Techniques used for predictive analysis: Naive Model, Simple moving average, Double moving average, autoregression, linear regression, Simple exponential smoothing, Holt’s method, etc.

e. Prescriptive Analysis:

Prescriptive analysis is used to recommend a course of action based on the predictions. It helps organizations make data-driven decisions related to production, operations, and services. 

f. Exploratory Analysis:

Exploratory analysis is used to explore new insights, relationships, patterns & trends in the data. It is often used in the early stages of research to generate hypotheses and identify areas for further investigation.

The Data Analysis Process:

The data analysis process refers to the steps we follow while performing data analysis. Data analysis is a critical task and needs full attention. Following are the steps followed in the data:

1. Data Collection:

Two types of data are used in research quantitative data and qualitative data. Some common sources of data collection are case studies, surveys, experiments, interviews, questionnaires, observation, focus groups, etc., and secondary sources e.g. books, magazines, databases, etc.

2. Data Cleaning:

Remove duplicate records, anomalies, incorrectly formatted, errors, inconsistencies, and missing values, etc. Data cleaning is mandatory before data analysis otherwise results will be inaccurate.

3. Data Analysis:

Different statistical techniques e.g. correlation, regression, and narrative analysis are used to study relations among variables. Different data analysis software e.g. Excel, Python, R, SPSS, SAS, Looker, Rapid Miner, Matlab, and Microsoft Power BI are used for data analysis.

4. Data Interpretation:

After data analysis, the next step is data interpretation. Data interpretation is about drawing conclusions and inferences based on data analysis and generalizing research findings.

5. Data Visualization:

Graphically represent the research findings using bar charts, graphs, line charts, tables, heat maps, bullet points box plots, etc.

Data Analysis Tools
(Data Analysis Tools)

Data Analysis Tools:

  • Mean, Median, Mode: Basic measures of central tendency.
  • Standard Deviation and Variance: Measures of data dispersion.
  • Correlation and Regression Analysis: Tools to understand relationships between variables
  • Tableau: Great for creating interactive and shareable dashboards.
  • Power BI: Microsoft’s powerful data visualization tool.
  • Excel: A versatile tool for both data analysis and visualization.
  • Python: Programming languages for data analysis.
  • SQL: Essential for managing and querying databases.
  • SPSS and SAS: Specialized tools for advanced statistical analysis.

Real-World Applications:

  1. Business Intelligence: Businesses use data analysis to make informed decisions, optimize operations, and gain a competitive edge.
  2. Healthcare: In healthcare, data analysis helps in patient care, medical research, and operational efficiency.
  3. Marketing: Marketers analyze data to understand consumer behavior, measure effectiveness, and optimize marketing strategies.
  4. Finance: Financial institutions rely on data analysis for risk management, fraud detection, and investment decisions.


Data analysis is a powerful tool that can unlock valuable insights and drive decision-making in various fields. By understanding the core concepts and processes, beginners can start their journey into this fascinating world.


Disclaimer:- Views expressed are the author’s own.

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