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What is Data Analytics? Definition, How to Use, Types and Techniques

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9th Aug, 2023
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What is Data Analytics? Definition, How to Use, Types and Techniques

In this era of ever-increasing data, harnessing and analysing information effectively has become paramount for businesses and professionals alike.

The appropriate answer to the question, “What is data analytics” would be examining vast data sets to uncover patterns for efficient decision-making. This comprehensive guide will delve into the fundamental aspects of data analytics. 

What Is Data Analytics?

Before delving into the various nitty-gritty of data analytics, we must first address the obvious question “What is data analysis”. It is a methodical and iterative process of scrutinising, refining, transforming, and modelling data to unearth valuable insights, patterns, and trends. 

Data analytics has widespread applications across marketing, finance, healthcare, e-commerce, and other industries. It empowers organisations to:

  • Make data-driven choices
  • Comprehend customer preferences
  • Augment operational efficiency
  • Innovate new products and services. 

Data analytics continually evolves as technology advances, creating fresh opportunities for businesses to leverage data as a strategic asset.

Why Is Data Analytics Integral on the Business Front?

Data analytics is essential for businesses to thrive in today’s data-driven landscape, empowering them to make data-backed decisions, optimise operations, and maintain a competitive edge. 

  • Informed decision-making: Data analytics provides valuable insights that support evidence-based decision-making, reducing reliance on guesswork and intuition.
  • Market understanding: Analysing data helps businesses understand customer preferences, market trends, and emerging opportunities, allowing them to tailor their strategies accordingly.
  • Competitive edge: Companies that leverage data analytics gain a competitive advantage by staying ahead of competitors, optimising operations, and meeting customer needs more effectively.
  • Cost efficiency: Data analytics enables cost savings and better resource allocation by identifying inefficiencies and optimising processes.
  • Personalised customer experience: Understanding individual customer behaviour through data analytics allows businesses to offer personalised experiences, fostering customer loyalty and satisfaction.
  • Risk management: Data analytics helps identify and mitigate potential risks, enabling businesses to address challenges and uncertainties proactively.
  • Innovation and growth: Insights from data can lead to innovation, and the development of new products, services, and business models, driving growth and expansion.
  • Real-time insights: With real-time analytics, businesses can monitor performance, respond quickly to changes, and capitalise on immediate opportunities.

If you are considering a career in data science and machine learning, taking up an Executive PG Programme in Data Science & Machine Learning from University of Maryland can be an excellent step in that direction. 

What Is Big Data Analytics? How Is It Different From Data Science? 

Big data analytics refers to the process of analysing and examining vast and complex datasets, often called “big data”, that traditional data processing methods may not be sufficient to handle effectively. On the other hand, data science is a broader field encompassing various techniques, methodologies, and tools to extract knowledge and insights from data. The table below illustrates the differences:

AspectBig Data AnalyticsData Science
FocusDeals with large and complex datasetsEncompasses a wide range of data tasks
Dataset sizeSpecifically handles big datasetsCan handle datasets of various sizes
Main GoalExtract meaningful insights from big dataExtract insights from data using techniques
Techniques UsedDistributed computing, Hadoop, SparkStatistical analysis, machine learning, etc.
Application ScopePrimarily focused on big data analysisApplies to both big and smaller datasets
Data ProcessingSpecialised tools for massive datasetsUses a variety of data processing methods
Interdisciplinary FieldPart of the broader data science fieldEncompasses various disciplines and methods
Emphasis on Domain ExpertiseMay not require in-depth domain knowledgeOften relies on domain-specific expertise
Common ApplicationsBusiness intelligence, IoT, social mediaPredictive modelling, recommendations, etc.

Different Forms of Data Analysis

Data analysis can take various forms, depending on the data’s nature, the analysis’s objectives, and the tools and techniques employed. Each form of data analysis serves different purposes and provides valuable insights, and the choice of analysis depends on the specific research questions and the type of data available.

Here are some different forms of data analysis:

  • Descriptive Analysis: Descriptive analysis involves summarising and presenting data to clearly understand its main features. It includes techniques such as mean, median, mode, and standard deviation and data visualisations like bar charts, histograms, and pie charts.
  • Predictive Analysis: Predictive analysis involves building models based on historical data to predict future events or outcomes. Machine learning algorithms, such as regression, decision trees, and neural networks, are commonly used in predictive analysis.
  • Prescriptive Analysis: Prescriptive analysis goes beyond predictive analysis by recommending actions or decisions to optimise outcomes. It combines historical data, predictive modelling, and optimisation techniques to suggest the best course of action.
  • Diagnostic Analysis: Diagnostic analysis focuses on understanding the reasons behind specific outcomes or events. It involves investigating patterns in data to identify the factors contributing to a particular result.

Read our popular Data Science Articles

Real-World Case Studies of Data Analytics 

Here are some real-world case studies of data analytics:

  • Netflix – Personalised Recommendations: Netflix, the popular streaming platform, leverages data analytics to provide personalised movie and TV show recommendations to its users. By analysing user viewing history, preferences, and behaviour, Netflix’s recommendation algorithm suggests content tailored to each user’s interests, increasing user engagement and retention.
  • Uber – Surge Pricing: Uber uses data analytics to implement surge pricing during peak demand periods. By analysing real-time data on rider demand and driver availability, Uber dynamically adjusts prices to balance supply and demand, ensuring sufficient drivers are available during busy times and offering incentives for drivers to respond to increased demand.
  • Walmart – Inventory Management: Walmart employs data analytics to optimise inventory management and supply chain operations. By analysing sales data, seasonal trends, and historical demand, Walmart can predict product demand accurately and maintain optimal inventory levels, reducing stockouts and minimising excess inventory costs.
  • Tesla – Predictive Maintenance: Tesla uses data analytics and sensors installed in its vehicles to accurately predict maintenance needs. The data collected from the vehicles’ systems enable Tesla to detect potential issues early, notify customers, and proactively schedule maintenance, ensuring a smoother customer experience and reducing downtime.

Check out free courses on upGrad.

What Does a Data Analyst Do?

A data analyst is a professional responsible for collecting, processing, and analysing data to derive valuable insights and support organisational decision-making. A data analyst’s specific roles and responsibilities may vary depending on the industry, company size, and the focus of their work. 

They are responsible for cleaning and preprocessing data, applying statistical techniques and data visualisation tools for analysis, and presenting findings through reports and dashboards. Data analysts contribute to business intelligence initiatives, forecast, and collaborate with stakeholders. 

What Roles Do Data Analysts Play?

Data analysts are crucial in converting raw data into actionable insights, helping organisations optimise processes and achieve their objectives. Data analysts play various important roles within an organisation, including:

  • Data Collection: Data analysts gather relevant and reliable data for analysis from various sources.
  • Data Cleaning and Preprocessing: They ensure data accuracy by resolving inconsistencies and handling missing values during data preparation.
  • Data Analysis: Applying statistical and computational methods, data analysts identify patterns and insights in the data.
  • Data Visualisation: They create clear and understandable visualisations to present complex data effectively.
  • Reporting: Data analysts generate reports to communicate findings and insights to stakeholders.
  • Business Intelligence: They contribute to data-driven decision-making across the organisation.
  • Forecasting and Predictive Analysis: Data analysts use historical data to forecast future trends and perform predictive analysis.
  • Collaboration: They work with different teams to understand data needs and support business objectives.
  • Data Quality Assurance: Data analysts assess data quality and recommend improvements for reliability.
  • A/B Testing and Experimentation: They design and analyse A/B tests to evaluate strategies or interventions.
  • Continuous Learning: Data analysts stay updated with the latest techniques and tools to enhance their skills.

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Some Tools and Techniques Used By Data Analysts 

Data analysts regularly use various tools and techniques to process, analyse, and visualise data. Here are some commonly used tools and techniques:

  • Microsoft Excel
  • SQL (Structured Query Language)
  • Python (with libraries like Pandas, NumPy, and SciPy)
  • R (for statistical computing and data visualisation)
  • Data visualisation tools (Tableau, Power BI, etc.)
  • Statistical techniques (hypothesis testing, regression analysis, clustering)
  • Machine learning algorithms (decision trees, logistic regression, etc.)
  • Data cleaning tools (OpenRefine, Trifacta)
  • Apache Hadoop (distributed processing of large datasets)
  • Apache Spark (fast distributed data processing)
  • GIS software (ArcGIS, QGIS) for spatial analysis and mapping.

Preparing for a data analyst role? Sharpen your interview skills with our comprehensive list of data analyst interview questions and answers to confidently tackle any challenge thrown your way.

Skills Required to Become a Data Analyst

Some mandatory skills required to succeed in data analysis are

  • Proficiency in data analysis tools and languages such as SQL, Excel, Python, R, or other statistical software.
  • Strong understanding of data manipulation, cleaning, and preprocessing techniques.
  • Knowledge of data visualisation tools like Tableau, Power BI, or Matplotlib for creating compelling visualisations.
  • Familiarity with basic statistical concepts and techniques, such as hypothesis testing, regression analysis, and clustering.
  • Ability to work with large datasets and understand data structures.
  • Problem-solving skills to identify relevant questions and formulate data-driven solutions.
  • Critical thinking and analytical mindset to interpret data and draw meaningful insights.
  • Domain knowledge in the specific industry of interest (e.g., finance, healthcare, marketing) to contextualise data analysis.
  • Strong communication skills to present findings and insights effectively to stakeholders.
  • Attention to detail and accuracy in data analysis and reporting.
  • Continuous learning and adaptability to keep up with evolving data analysis tools and techniques.

Check out data science certification courses from the world’s top universities.

Best Data Analytics Courses to Pursue 

Data analytics courses are specifically designed to train students in various tools and techniques necessary to thrive in this field. upGrad’s Advanced Certificate Programme in Data Science from IIIT Bangalore is one such course. This comprehensive programme will equip you with the necessary skills and knowledge to become a proficient data analyst. Through hands-on training, you will gain expertise in various data analysis tools, programming languages, and statistical techniques.

The programme’s curriculum covers essential topics such as data manipulation and visualisation, machine learning, and big data processing, providing you with a well-rounded education in data science. Additionally, you can work on real-world projects and case studies, honing your problem-solving and analytical skills.

Data Analytics and Its Future Prospects

Data analytics is poised for a promising future with ever-increasing data volumes and the growing importance of data-driven decision-making across industries. More sophisticated tools, algorithms, and techniques will emerge as technology advances, enabling organisations to extract deeper insights from data. 

The demand for skilled data analysts, data scientists, and data engineers is expected to rise significantly as businesses seek to optimise processes, improve customer experiences, and gain a competitive edge. Additionally, data analytics will be crucial in shaping innovative healthcare, finance, and cybersecurity solutions.

Data analytics will continue to be a vital driver of future business success and technological advancements.


Data analytics is a transformative discipline empowering organisations to unlock the hidden potential of data and make informed decisions. With its systematic approach to examining and interpreting vast datasets, data analytics enables us to gain valuable insights, identify patterns, and predict trends. 

As technology continues to evolve, the future of data analytics holds immense potential, promising continued innovation and advancements in this dynamic and indispensable field. Enrolling in a Professional Certificate Programme in Data Science and Business Analytics can offer numerous benefits for aspiring data analysts and professionals looking to advance their careers.


Rohan Vats

Blog Author
Software Engineering Manager @ upGrad. Passionate about building large scale web apps with delightful experiences. In pursuit of transforming engineers into leaders.

Frequently Asked Questions (FAQs)

1What is business analytics?

Business analytics uses data and statistical methods to derive insights and make data-driven decisions to improve business performance.

2What is descriptive statistics?

Descriptive statistics involves summarising and presenting data to gain insights into its main features and characteristics.

3What is qualitative data?

Qualitative data refers to non-numeric information or descriptive data that can be observed but not measured.

4What is data analysis in research?

Research data analysis is the systematic process of examining, interpreting, and drawing conclusions from collected data to address research questions or hypotheses.

5What is big data analytics?

Big data analytics is analysing and extracting valuable insights from large and complex datasets, often characterised by their volume, velocity, variety, and veracity.

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