Data analytics may seem like a foreign language to some; however, even though the individual tasks involved in data analysis are esoteric, the benefits they bring to your organization are straightforward. Companies using extensive data analysis beat competition time and time again. In fact, as a Toward Data Science survey shows, 54% of all businesses need business intelligence with more predictive analysis to anticipate risks, but why?
The reason data analytics brings businesses continued success is because it gives them actionable insight into how they can improve their business model. It also shows the most effective products for customer needs and reveals areas companies can cut operational costs with no detriment to their bottom line.
Fully Accountable is a team of financial analysts who can bring these benefits to your company. Our data analysts offer business intelligence that improves your bottom line and improves your cash flow. When you choose Fully Accountable, you’ll access extensive data analysis that achieves measurable, sustained growth.
What Is “Data Analytics?”
Before explaining why data analysts are essential components of your organization, you should understand data analytics as a field and how you can use it to your company’s advantage. At its most basic level, data analytics deals with discerning meaning from statistics and disorganized information. It’s essentially a data-centric approach to your financial audit.
When you can explore, understand, project, and strategize using abstract data, you can communicate valuable insights within your team using that data. These analysts can interpret anything- from numbers (quantitative data) to sounds, images, and words (qualitative data) and draw conclusions that affect your company’s bottom line and strategy.
Data analysts start with the raw data- disorganized data without context. They then take the raw data and derive helpful information, essentially bringing stability to a once unstable system. To analyze this data, analysts must first collect, clean, and organize the data.
Data analysis incorporates multiple metrics to make comprehensive decisions. Some of these advanced metrics include statistics, programming, and visualization. Nowadays, tools can automate many of these metrics. However, data analysts still need the tangible and intangible skills required to analyze the data despite the increased automation.
Why Do Data Analytics Matter?
Two simple facts make data analytics necessary. The first critical component to data analytics is the decision-making power it gives companies. The second is the data’s evidence-based nature. It gives teams the ability to make decisions rooted in empirical data. It’s important to note that data analysis isn’t always 100 percent accurate, but it can help predict future trends and draw conclusions.
Data analytics offers companies the ability to proactively adapt to changing needs, mitigate risk and fraud, consistently deliver new products to their target audience, further personalize their services to their customers. Without it, businesses essentially operate on instinct rather than tangible evidence.
Not only do data analytics have applications for businesses. They also have applications in broader society. For example, you can use data analytics to improve patient care and apply it to agriculture to transform the way we feed large populations.
What Does a Data Analyst Do?
Now that you understand what data analytics is, it’s important to examine data analysts’ role in organizations. The primary function of a data analyst is to convert raw data into actionable insights. After analyzing the raw data, data analysts should solve specific problems or questions that lead to actionable insights. Once the analyst solves these problems, they should provide evidence to their superiors to plan for the future accordingly.
You should associate the following responsibilities with data analysts:
- Developing and implementing databases and data collection systems
- Working closely with management to identify critical metrics, KPIs, and business needs
- Primary and secondary data collection
- Filter and clean data
- Identify and analyze trends and patterns in complex data sets
- Visualize and present findings to stakeholders
- Build and customize reports
- Develop and maintain dashboards
- Create and maintain documentation regarding data models, measures, and infrastructure as they develop
The responsibilities mentioned above examine the data analyst role from a broad perspective. To understand the role more, you need to look at some specific tasks data analysts undertake.
Data Analyst Task and Processes
Define the Question
Data analysts need to understand the problem they’re trying to solve. Without this knowledge, raw data stays raw data. What seems like an obvious business problem with a simple solution may not always get to the core of the real issue.
For example, your company wants to boost revenue and the executives want to accomplish this by releasing a new product line. Your data analysts spend loads of time and resources analyzing which products fit best for the new launch.
However, after analyzing the data, your analysts discover the problem isn’t with your products. It’s your flawed sales process and low customer satisfaction. With this insight, your team realizes it can boost revenue with sales and customer service training at a fraction of the price.
Data analysts understand the importance of probing every angle of the question they’re trying to solve. They need to bring unbiased advice to their superiors and use the correct metrics to reach a decision.
After the data analyst understands the question in its entirety, they need to uncover the raw data that leads them to the best answer. In some cases, this includes quantitative data, and in others, it includes qualitative data.
The data analyst’s job is to understand how to obtain the required data. Whether they collect the data through social media monitoring, website analytics, or online tracking, the next step is to clean the data.
When your data analyst first collects data, it will still be in raw form, meaning it will still have errors, which means it will need organization. To clean the data so it’s suitable for analysis, you can use various tools and techniques such as custom algorithms, generic software, and exploratory analyses to get it into a suitable state.
Data cleaning tasks entail removing errors, duplicates, and outliers, eradicating unwanted data, structuring data in valuable ways, and filling gaps. After cleaning the data, the data analyst needs to validate the data.
After cleaning and validating the dataset, the analyst should be ready to analyze the data. There are different types of data analysis, and part of their challenge is identifying the best approach based on four data analysis types.
- Descriptive analysis– Analyses what happened based on the data.
- Diagnostic analysis– Examines why things happened based on the data.
- Predictive analysis– Answers what will happen in the future based on the data.
- Prescriptive analysis– Details the best course of action based on the data.
Analysts should decide which type of analysis to use based on the question they’re trying to answer. For example, if they are trying to answer what a company’s projected third-quarter revenue will look like, they should use predictive analytics.
After carrying out analysis and drawing conclusions, the data analysis should communicate the results to their superiors. Presenting data to seniors should include a visual representation of the data. Visualizing the data involves creating interactive dashboards, documents, reports, and presentations.
Clearly communicating data results is one of the most critical responsibilities of a data analyst. Without clear data communication, conflict can arise, and there will be discrepancies in the best actions for your company.
What Skills Do Data Analysts Need?
High-quality data analysts need particular skill sets to succeed in their jobs. The following attributes are critical for data analysts as they ensure they will be able to perform their duties with diligence and competence.
Math and Statistics
Data analysts need to have math and statistical skills. Data analysts can either have an undergraduate degree in math, statistics, or computing. However, while qualifications often dictate a person’s skill level, they aren’t always the most accurate measurement for a candidate’s ability. As long as data analysts have a solid foundation in math, they should be sufficient for the role.
Additionally, data analysts must understand how to adjust algorithmic programs and how to automate data analytic tasks. They should be familiar with Python or MATLAB, and statistical computing languages such as R and SAS are all popular in data analytics.
Aside from programming languages, data analysts need knowledge in database warehousing software, such as Hive and Spark. They will also need knowledge in database query languages such as SQL.
Excel is a valuable tool to communicate interpreted data in a readable format. Data analysts can also use it for complex calculations.
One of the most important skills involved in data analysis is visualizing data with charts and graphs. Having visualization skills helps other company members interpret patterns, correlations, and trends. To do so, analysts should understand how to create plots in Python and other tables and charts in Microsoft Excel.
Machine Learning Knowledge
Junior-level data analysts don’t need to be experts in machine learning. However, machine learning is a critical component for many data analytic tasks. Data analysts should be familiar with the theory and supervised learning vs. unsupervised learning.
Why Do Companies Need Data Analysts?
Decision-makers in businesses should have access to key data that makes big decisions easier. For larger organizations, decision-making can take weeks or months. Even with smaller organizations, high-quality data analysts can streamline the decision-making process and improve a company’s agility.
In a Deloitte Analytics Advantage Report, 49% of the survey respondents asserted the most significant benefit of using data analytics is that it improves the decision-making process, giving companies the ability to strategize using concrete evidence.
Testing and Retesting
Without data analysis, your company hasn’t the faintest clue whether the decisions they land on work. If you don’t use data to measure your strategy success, how can you expect to make decisions based on fact instead of opinion and instinct. And if you can’t test your decisions, how can you analyze your decisions’ success.
Improved Target Market Reach
Data analysis helps determine which forms of advertising reach your customers best and their impact on your customer’s buying experience. These data types enable you to understand advertising methods and predict which ones have the most significant impact on your target audience.
Data analysis helps companies stay one step ahead of future mishaps. They can examine consumer behavior and devise pragmatic strategies that address those behaviors. With these innovations, companies gain an edge over competition that isn’t using data analytics. After creating these innovations, companies can patent them and reap additional benefits.
Cutting Operation Costs
If you have data analytics ingrained in your business, you can continuously cut costs that aren’t serving your bottom line. Data analytics gives you insight into which business sectors need the most resource allocation and which sectors deserve their resources pulled. Data analysis makes all of your company’s actions precise and meaningful, avoiding aimless business strategies and eliminating activities that add no value to your business.
Conclusion- What a Data Analyst Does and Why Every Organization
Financial decision-making can make or break your business. If you have systems in place that utilize data analytics, you automatically gain an advantage over competitors not using data analytics.
Data analytics helps your business strategize for future financial obstacles and cut operational costs. They streamline your production and help you reach your target markets more efficiently. However, data analysts need specialized expertise in mathematics, statistics, and programming to bring these benefits to fruition, and finding these experts can be challenging.
At Fully Accountable, we aren’t just accountants. Our team of experts understands the metrics and software that bring you the best results. By using our outsourced financial services, your business gets real-time results, increasing your cash flow and bringing you more profits with proven strategies.
Contact us today to learn how we can streamline your business model.