DATA ANALYSIS METHODOLOGY: 6 STEPS TO PUT INTO PRACTICE
With the digital transformation and the immense amount of data that companies have at their disposal, through a variety of software options, be it data analysis, digital marketing tools, BI and big data. Access to information has become much more streamlined.
But what to do with this volume and data? How to get the right insight and make the best decisions?
If you are looking to know which data analysis method to use in your company, look no further, we have the solution you need in 6 simple steps!
Data analysis is a technique that aims to allow managers to have access to the relevant information about their company and identify business opportunities, making it easier to make the right decisions.
A good analysis can be made from different approaches and methods. So, to give you better guidance, we have separated a data analysis methodology into 6 steps.
Check it out and learn how this technique can help you have a broader view of your company and make more effective decisions.
See also: Scenario analysis for strategic planning: know the best tools
Data Analysis Methodology
1st Step – Definition of the questions
The first step of our data analysis methodology concerns the definition of the questions you intend to answer when analyzing the data you have in hand.
The questions must be measurable, clear and concise. Compile your questions to qualify or disqualify possible solutions to your specific problem or opportunity.
Imagine the following situation. Your company has faced problems with a supplier; the contractor is generating increasing costs for you and has proven unable to offer competitive prices within the contract.
In this case, one question you can ask to solve this problem is:
- Is your company able to afford a fine for breach of contract and hire another supplier that offers better conditions?
2nd Step – Define what to measure
Using the supplier example above, consider what type of data you would need to answer your key question.
In this case, you need to know, for example, the costs that that particular supplier represents to your company.
Then, be sure to include any and all reasonable objections that both your company and the supplier may have. If you are going to change suppliers, try to quantify the impact of that decision.
Step 3 – Define How to Measure
In this third step of data analysis methodology, it is very important to think about how you measure your data. This is because the measurement process can affect the quality of the data collected.
See below some questions that can be asked for this step:
- What is your deadline for analyzing the data?
- What will be the source of the data?
- What factors should be included in the analysis?
Taking this into account, establish criteria that will allow you to collect the data in a timely manner without affecting its quality.
4th Step – Do the data collection
With your questions and your measurement priorities clearly defined, it’s time to collect your data.
At this stage of the data analysis method, determine which information can be collected from existing databases or sources. Collect this data first.
Determine in advance the file storage and naming system to help all members of your team collaborate. This process saves time and prevents team members from confusingly collecting the same information two or more times.
If you need to collect data through observation or interviews, develop a questionnaire template in advance to optimize time. Keep your collected data properly labeled and organized.
5th Step – Do the data analysis
After collecting the right data to answer the question you asked in Stage 1, you arrive at a detailed analysis of that data.
You can use graphs, tables, and other visual aids to provide a clearer view of the collected data.
A pivot table for example, can help you sort and filter data from different variables. During this stage of our data analysis method, the use of software can be extremely beneficial.
As you manage the data, you may need to review your original question or collect further data. Either way, this initial analysis helps you focus your data analysis to better answer your question and any objections that may arise.
Check out our blog: 3 tools for root cause analysis as a guide to decision making
6th Step – Interpret the results
After analyzing your data and perhaps doing more research, it’s finally time to interpret your results. When interpreting your analysis, ask questions like:
- Does the data answer the original question? If so, in what way?
- Does the data help you to defend yourself against any objections? If so, in what way?
- Are there any limitations in your conclusions? If yes, what are they?
If your interpretation of the data is supported by all these questions and considerations, you have probably come to a constructive conclusion.
The only remaining step is to use the results of the data analysis process to decide the best course of action.
These are the 6 steps of our data analysis methodology. By following them, you’ll be able to make decisions based on solid, robustly analyzed data. In addition, your analysis will be more streamlined and accurate.
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