What Does Taking An Analytic Approach Mean?
Analytics is among the buzziest concepts in the modern world. They show up in seemingly every sporting event, corporate report, and news broadcast these days. What does it mean for an organization to take an analytic approach, though? Data analytics consultants will usually point to these four ideas.
Statistical Methods
For any data analytics company, statistical methods anchor all the work. These are mathematical ideas that ground the analysis in established concepts. For example, an analytics firm will frequently do a regression analysis to determine how much a metric is likely to come back to the trend line. Similarly, analysts frequently judge their findings based on sigma, a statistical view of the probability that an event is just a random outcome rather than something significant.
Noise, Stochastics, Filtering, and Normalization
Most data is noisy. If you pick a random stock market ticker, for example, you'll see the line go up and down many times over the course of months and years. This wobbliness is considered stochastic, and it's inherent to many things throughout the whole universe. Even if you measure something mundane like the PPM of dust in a room, the reading will fluctuate because virtually everything is stochastic at some level.
Frequently, data analytics consultants will want to filter or normalize the data. They may train their software to throw out outliers that throw the analysis off, for example. Similarly, they will try to average out the variability in data to find the main trend line. This makes it easier to read data as something other than noise.
Optimization
Ideally, all of this analysis will give you a sense of what's good and bad in a dataset. Suppose you were trying to optimize a car's fuel economy. You might test its performance at various speeds and then analyze the ranges where it performs the best. Car companies frequently program onboard computers using this kind of analysis to ensure vehicles get the best possible MPG.
Many industries analyze problems this way. A political campaign might analyze what media are likely to produce the most votes per dollar spent. Sports teams make play-calling decisions based on which choices are the most likely to produce a win.
Monitoring Changes
If you have an optimal approach to a problem, you'll want to monitor changes. A retailer might deploy security staff based on changes in thefts and property damage, for example. Your goal should be to dial real-world performance in as close to the projected optimum as possible.
For more information, contact a company such as Bay Tech Analytics.