Data Science

Types of Data Analysis in Data Science and Its Applications

Published: 12th April, 2023

Harshini Bhat

Data Science Consultant at almaBetter

Let us assume that by the end of the month you are left with hardly any money in your account and have spent ruthlessly

Let us assume that by the end of the month, you are left with hardly any money in your account and have spent ruthlessly; you would be very disheartened, right? To ensure that this does not happen again, it is essential to track your expenses and reduce unnecessary spending to keep your finances in good health. In short, you are analyzing the information or data about your spending to optimize your finances. A similar principle is used in data analysis, which uses data to provide insights and address challenging business issues.

Type of Data Analytics

Type of Data Analytics

Table of contents for this article:

  • What is Data Analytics or Data Analysis?
  • Who needs to know about Data Analysis?
  • Important types of Data Analysis processes to know
  • Importance of Data Analysis in the future
  • How to learn Data Analysis

What is Data Analytics or Data Analysis?

Data analytics, sometimes referred to as data analysis, is the process of analyzing information, reviewing, purifying, transforming, and modeling data to derive insights from historical data, support decision-making, and extract meaningful business information. It uses various data analysis methods and tools, such as business process analysis, statistical analysis, machine learning, and data visualization.

The data analytics objective is to find insights and patterns in data that can help with operations, corporate decisions, and scientific research.

Utilizing consumer information from an e-commerce website to examine purchasing trends is an example of data analysis. Data analysis entails examining the most well-liked products, calculating which client demographics are most likely to purchase, and determining the most successful marketing strategies.

For example, the corporation might use this information to analyze which products to stock more of, which client segments to target with marketing campaigns, and how to optimize their website for sales.

Who needs to know about Data Analysis?

Any professional who makes decisions to solve business problems must have a solid understanding of data analytics. Data access is more accessible to come by than ever. However, you may overlook significant possibilities or warning signs if you design strategies and make decisions without considering the facts.

Although data analytics can be helpful in all domains, it can be especially useful for the following professions:

Business owners use data analysis to make informed decisions about their operations, such as identifying areas for cost savings or determining which products are most popular with customers. Business owners of all domains would benefit highly with data analytical skills as data analysis would improvise business growth and success.

Product Managers use data analysis to gain insights into customer behavior and preferences, which can inform product development and marketing strategies. They may also use data analysis to track the performance of their products and make adjustments as needed.

Data Science beginners use data analysis to learn more about the field and develop the skills they need to become more proficient in Data Science.

Financial professionals use data analysis to make better investment decisions, identify market trends, and develop financial models.

Business Analysts use data analysis to evaluate a business’ performance and identify improvement opportunities. They may also use data to develop and test hypotheses about how to improve a business performance.

Data analysis helps professionals understand what happened, what is happening, and what can happen. It helps gain insights and make informed decisions, leading to improved performance and increased success.

Important Types of Data Analysis Methods to know

There are four main types of data analysis that are used across all the industries. Let’s understand all the types of data analytics with examples.

  1. Descriptive Analysis
  2. Diagnostic Analysis
  3. Predictive Analysis
  4. Prescriptive Analysis

Data Analysis Process

Data Analysis Process

Descriptive Analysis

Descriptive Analysis meaning is a method used to summarize and describe a data set’s main features. “What happened” is answered by descriptive analytics.

Take for instance, an ed-tech company that develops a learning management system (LMS) for schools and universities. This tech company might implement descriptive analytics to summarize and describe the data collected from students and teachers who use their LMS. They might use this information to comprehend how the LMS is used and spot patterns in usage, such as the most popular features, the most active students, and the best professors.

Tools that are commonly used in descriptive analysis of data include Excel, R, and Python. These tools have built-in functions that can be used to calculate summary statistics and create visualizations. The expense of conducting a descriptive analysis depends on the data collection method. If the data is already available and accessible, the cost of conducting a descriptive analysis is usually minimal.

Diagnostic Analysis

Diagnostic analysis is one of the types of data analytics which is a technique used to look into and pinpoint the root of a particular issue or problem. The subsequent logical inquiry, “Why did this happen?” is answered by diagnostic analytics.

Let us consider the same example as before. To help improve their LMS and provide better support to teachers and students, the tech company might use diagnostic analytics to identify problems or issues arising from using the LMS. Assume that a teacher reported an issue with a particular LMS feature. The business might employ diagnostic analytics to pinpoint the issue’s root cause, such as a programming error or a dearth of teacher training on how to use the function.

Tools that are commonly used in diagnostic analysis include Excel, R, and Python for data analysis, and specialized software like Minitab or JMP for statistical analysis.

Predictive Analysis

What is predictive analysis? In order to predict future trends or events or to provide a response to the question “What might occur in the future,” predictive analytics is used.

The ed-tech company might use predictive analytics to anticipate future usage patterns and trends, such as which students struggle with specific content and which teachers are most likely to adopt certain teaching strategies. This analysis can help them make more informed decisions about developing and marketing their LMS and proactively support the teachers and students most likely to benefit from it.

Along with the commonly used SQL and Python, H2O Driverless AI, Microsoft Azure Machine learning, and IBM Watson Studio are some of the most used tools for model selection and semantic data analysis used in predictive analysis.

Prescriptive Analysis

Prescriptive analytics means finally responding to the query, “What should we do next?”. It recommends the course of action to be taken.

Supposed predictive analytics indicates that students are likely to struggle with a specific subject. In that case, the company might find the right strategy and recommend additional resources or support to help those students succeed.

While manual prescriptive analysis is feasible and available, machine learning algorithms frequently help sort through massive amounts of data and suggest the best course of action. “If” and “else” statements are used in algorithms as rules for parsing data. An algorithm makes a recommendation if a particular set of conditions is satisfied. Although there is much more to machine learning algorithms than just those words, they are a vital part of algorithm training along with mathematical equations.

Importance of Data Analysis in the Future

As more data is produced across various companies and sectors, data analysis is becoming an increasingly significant discipline. Making sense of this data and being able to evaluate it is becoming increasingly important for decision-making. In addition, the patterns and trends that emerge from the analysis of this data can be utilized to forecast upcoming occurrences and outcomes.

The forecasting of time series data is a significant additional use of data analysis. Based on historical data, this kind of analysis is used to forecast future values. This is becoming more crucial in fields like banking and economics where precise forecasts of future trends can be beneficial. Another crucial field of data analysis is statistical research, which creates models and algorithms for forecasting future results.

An important tool for data analysis is SWOT analysis. Finding a company’s or industry’s strengths, weaknesses, opportunities, and threats is helpful along with ROI comparison… Making educated decisions about a company’s market positioning and how to adjust to shifting market conditions can be done using this data.

The ability to process and make sense of this data will give an advantage to make informed decisions and predictions.

Now that we have understood the different types of data analytics and its importance, let’s understand how to learn Data Analysis.

How to Learn Data Analysis

Learning data analysis can be a challenging but rewarding endeavor. An excellent place to start is by gaining a solid understanding of the foundational concepts in mathematics and statistics, as well as probability along with SQL and Python. Understanding these concepts will provide you with the necessary tools to work with data and perform various types of analysis.

Next, you will want to learn about the different types of data and the tools used to analyze them. It might include learning about standard data visualization tools and techniques and becoming familiar with programming languages such as R and Python.

Practice is essential for the learning process. Try to build projects. It will give you an idea of how data analysis is used in real-world scenarios.

Lastly, staying up-to-date with the latest developments in the field is crucial by reading blogs, articles, and research papers. It will help you stay informed of new techniques and best practices and can provide you with ideas for your projects.


In conclusion, there are four different types of data analysis: descriptive, diagnostic, predictive, and prescriptive. Descriptive analysis is to summarize and describe the main characteristics of a dataset. The diagnostic analysis is to identify the cause of a particular problem or issue. Predictive analysis is to build models that can predict future happenings based on historical data. Finally, the prescriptive analysis is to identify the best-recommended action to take in a given situation. Each type of data analysis serves a different purpose and is used in different situations, but all are important in making informed decisions based on data.

If you are interested in forging a career in the field of Data Science and Analytics, sign up for AlmaBetter’s flagship Full Stack Data Science course or Masters in Data Science course. We offer 100% placement guarantee through our AlmaX program with our network of 500+ hiring partners. New batch starting soon!

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