5 Steps at the Core of Data Analysis

In front of you is an excel sheet, one of the many MIS reports you juggle with every month. Over 5000 cells are filled with numbers, spread across the length breadth of the sheet. Your Task: analyze this data and present your findings to your boss/manager/leader. Your biggest dilemma: Where to begin and how to proceed.

My advice, take a deep breath and find your focus. Next step, don’t try to analyze the data, let the analysis flow with the data.

It’s the first step which is usually the hardest. Data Analysis also seems overwhelming at times because we do not know ‘where to begin’.

Defining the purpose for the data analysis exercise, or the challenge we are trying to deal with or the problem we wish to solve provides the much needed direction. It gives us that critical first step which sets the tone for the rest of our journey.

For the analysis to flow with the data, you need to ensure that you have a clear understanding of the data. The biggest reason in my experience, people get stuck in their analytical process is because they do not have an understanding of their data. Analysis becomes very intuitive and logical if you understand the various components of your data.

At the core of the Data Analysis process, is finding relevant trends, relationships, patterns and outliers in your data. Most analysts are adept at this. Some believe that this is all there is to Data Analysis, which is why they struggle to interpret the results of this step and then communicate it effectively to an audience. When finding trends, relationships, patterns and outliers, the word ‘relevant’ is critical. That is the basis of the entire analytical exercise. The first two steps, which is Identifying the purpose/challenge/problem and understanding the data help us identify the most relevant of these analytical pieces. These relevant analytical pieces then lead us to the logical interpretation and effective communication of the results/outcomes/conclusions of this exercise.

Adding logical insights to your data findings is usually the trickiest part and unfortunately, there are no short cuts to this. An in-depth understanding of the data is a must for the intuitive and logical flow of insights. Invest enough time from your daily routine to understand, learn and remember more of the data that you regularly come across. Spend time just running over the numbers; familiarize yourself with the concepts; read related industry reports or news items as applicable; participate in knowledge seeking and sharing discussions whenever you get a chance; Learn from your mistakes. The best way to develop logical, analytical intuition is knowledge and experience.

The most important step of this whole process, and the one where people falter most often, is communicating the results of your analysis to the business audience. Written and visual communication are the two most common formats for sharing business insights. I have often seen that while people are good at analyzing their data, and they have all the answers within them, they are unable to convey the results as expected. The reports and presentations are full of data, only presented in a slightly better format than the raw data one receives. However, lacking in insights and conclusions. Such reports and presentations, compel the audience to analyze the data themselves for which neither do they have the time, nor is it their job. To ensure a fruitful end to your analytical exercise, it is important to communicate the results of your analysis in the form of a Data Story to effectively communicate the insights and conclusions at the same time also leaving an impact on your audience.