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What is Data Analysis?

James Gallagher - January 04, 2021

When you sent your last email, you created data. When you logged onto a shopping site to make a purchase, you created data. This data will likely be stored somewhere, usually either on your computer or the servers of a company.

Have you ever thought to ask yourself: what do people do with this data? That’s a great question. There is an entire field called data analysis that is devoted to figuring out what uses a particular set of data has.

In this guide, we’re going to discuss what data analysis is, how data is analyzed, and what skills you need to be a data analyst.

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What is Data Analysis?

Data analysis involves processing, cleaning, and understanding data to figure out the solution to a problem. Data analysis is often used in businesses and governments to make decisions.

Consider the following scenario. A shopping website is deciding which product they should market in their next sale. They want to market a popular product to boost sales. The shopping website could use data analysis to determine what products are most popular so they can make a more informed decision about what product to put on sale.

Whereas humans rely on our own intuition to make decisions, data analysis is all about holding faith in the numbers. As a data set increases in size, the reliability of the analysis that someone has conducted increases. This is why companies gather so much data.

What is a Data Analyst?

A data analyst is the person who is tasked to solve the questions that a business, a government, or another organization wants to answer.

A data analyst will be presented with a problem, like identifying which product should go on sale on an online store. They will then use their knowledge of professional data analysis techniques to solve that problem.

The problems a data analyst solves depends on the industry in which they work. Governments use data analysis for applications such as public health protection and predicting how the economy will change. Businesses, on the other hand, use data analysis for everything from analyzing engagement on apps to figuring out what features users like most on a website.

What do Data Analysts Do?

On a day-to-day basis, data analysts use technologies like Structured Query Language (SQL) and mathematical libraries to gain an understanding of data.

Data analysts usually have a particular data set to work with that contains a set of values. It is the job of a data engineer, another person who works with data, to gather the data that needs to be analyzed. This data may be house sales, employee salaries, earthquake data, or something else depending on the problem the business wants to solve.

Data analysts first analyze a data set to identify what data it contains and what insights can be derived from that data. Then, they use their understanding of that data to apply various data analysis techniques, such as statistical analysis, to their studies.

Once a data analyst has analyzed a data set, they will compile their findings into a report. Their report should contain a recommendation or a series of recommendations based on what the data suggests the answer to a question could be.

What Skills Are Involved in Data Analysis?

Data analysis requires a combination of mathematical, programming, and business information analysis skills.

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To be a successful data analyst, you need to know how to code. This is because data analysis is a highly customized job. Every data set will be different. To be able to work with a dataset effectively, you need to know how to clean, process, and analyze data in various different ways. This typically involves using a programming language like Python or R .

Data Requirements Analysis

It’s easy to collect data. What is more difficult is collecting the right data . Before a data analyst begins their work, they must ask what problem they need to solve and what data they need to solve that problem.

Based on their answers to these questions, a data analyst will inform data engineers and other engineers what data points they need in order to successfully find the answer to a question.

Statistical Analysis

Data analysts apply statistical analysis solutions to data sets. This involves figuring out the limitations of a data set, using statistical principles like probabilities to understand a dataset, and calculating final results with those same principles.

Data Visualization

Data analysts are in charge of creating visuals that present what they have found after conducting an analysis. This is an important part of the job because data analysts usually answer questions for people who do not have a data analysis background.

Data analysts need to be good at communicating their findings with others who have a non-technical background. An excellent way to do this is through graphics, which are easier to interpret than lists of numbers. Data analysis tools like matplotlib and Tableau allow data analysts to create graphics and visuals for their work.

Business Intelligence

While it’s easy to think that data analysts just sit and analyze data, they need to do so in the context of a much larger issue. Data analytics experts need to have a keen awareness of a business’ goals and how data can help them achieve their goals.

On a daily basis, data analysts work with people from all over an organization to solve problems. This means they need to know how to talk in terms that engineers, directors, salespeople, and other employees will understand.

Ultimately, problems are framed as “how can this help advance our organization’s goals?” Some data analysts even specialize in applying business intelligence to data analytics. These people are called business analysts . They use diagnostic analysis to solve business-specific problems.

Data Cleaning

Data does not come in a neatly-packaged file with instructions. It comes as raw data. Data analysts need to figure out what to do with that data. Using a technique called cleaning, a data analyst will look through a dataset and make sure it is structured in the way they want.

This involves removing any values that are invalid, changing the formats of values that do not appear correctly, and checking to make sure that values are correct. Only once a dataset has been cleaned can analysis begin.

Data Interpretation

Data analysts need to be good at interpreting data. Not only do you need to know what a dataset can tell you, it’s key that you can figure out what a data set does tell you. It’s no use just knowing what data exists. You need to know what story that data tells.

Once an analysis has been conducted, a data analyst will read through the data with which they are working to identify trends. These trends will be compiled into a final report, alongside any visualizations and graphics that the analyst has prepared.


Data analysis is crucial to our modern economy. Today, data analysis is used by, among other groups, the insurance industry to predict claims, the financial industry to predict the direction of the stock market, technology companies to analyze user engagement.

What’s more, even the government relies on data to solve some problems. This is because data can help an organization make a more informed, data-driven decision about a problem. When you have data to back up a decision, it is easier to feel confident that you are pursuing the right path.

On the average day, data analysts apply their knowledge of mathematics, statistical dataset analysis methods, and programming to solve business problems.

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James Gallagher

About the author: James Gallagher is a self-taught programmer and the technical content manager at Career Karma. He has experience in range of programming languages and extensive expertise in Python, HTML, CSS, and JavaScript. James has written hundreds of programming tutorials, and he frequently contributes to publications like Codecademy, Treehouse,, Afrotech, and others.

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