Regardless of what job you do, you will regularly make decisions, and in order to make these decisions, you need data. Data surrounds us and, whether we know it or not, data informs our decisions so being able to analyse data means being able to make better decisions.
As technology has progressed, it's become easier to put systems in place to handle data, but it's also increased the amount of data we have available to us so we're constantly looking for easier ways to see the story behind the data. The introduction of computerised spreadsheets was a big moment in data analysis because suddenly anyone could input information, run a formula or create a graph and find an answer and as these tools have progressed, the access to information has exploded!
As a trainer and consultant, I've chosen to focus on data analysis and using Excel and Power BI in order to analyse data. I spend a lot of time teaching people how to use these tools but I also spend time teaching different forms of data analysis because what a lot of people don't realise is that knowing WHAT questions to ask is as important, if not more important, than being able to put together an impressive dashboard.
The two most basic forms of data analysis are comparison analysis and trend analysis so I'm going to start with them.
A comparisons shows you things like what items sells the most or which product is not doing well. You can compare different months or regions to see where the biggest profit or lowest turnover is, you can also see how much of a difference there is between different products or time periods. Tables are the simplest way to do a comparison analysis, or if you'd like to visualise it then a column or bar graph is best. A pie chart is useful if you're only comparing two or three items but should be avoided for more than this.
The column or bar provide a good indication of how large or small an item is in proportion to the other items that are being displayed. If there are a large number of items in the graph then a bar graph is a better option as the labels are displayed horizontally and are easy to read.
Trend analysis is about understanding how data changes over time. Trends can be understood by many different time dimensions such as year, quarter, month, day of the month, day of the week, week number, hour and second.
Understanding your data over different time periods will provide important insight into whether things are moving up, down, staying stable or is volatile. The analysis of different time periods allows you ask a variety of important questions such as:
When working with trends you should use a line graph or area graph. The line graph will provide a good understanding of the general trend over time. A trend line is often added to the line graph and provides a good visual indicator of the trend.
An area graph is a good option for when you want to include a comparison and see how it is trending. For example an item could start off small, but grow over time, an area graph is a good method to display this information.