Data analysis can provide powerful insights to drive business decisions, but the quality of those insights depends heavily on the data being analyzed. It's crucial to gather data that is relevant and aligned with the specific objectives and purpose of the analysis. Otherwise, your analysis may be accurate, but not useful for informing the decisions that truly matter to the business.
Before collecting any data, the first step is determining the key goals and questions the analysis aims to answer. Consulting with stakeholders across teams like marketing, sales, and product is essential for understanding the core purpose and intended audience for the analysis. With a clear purpose defined, you can then identify the ideal type and scope of data required.
The type of data refers to the format or structure that is most relevant, such as sales figures, customer feedback, market trends, or competitor data. The scope defines boundaries around the dataset regarding geography, time, product categories, amount of data, and variables included. Carefully considering both the type and scope of data based on your analysis purpose ensures you gather information that provides accurate and actionable insights.
For example, if a bike company wanted to understand which models are most profitable in the USA, analyzing domestic sales data by model would be the right type of data. However, if the goal was improving the product purchasing experience for customers, gathering customer reviews and ratings would be more useful than sales figures alone.
Similarly, the scope could focus the dataset on just the US market for the past two years if the analysis will inform the development of a new bike model. Or looking at global data over a longer period if analyzing overall brand market share. Defining clear boundaries keeps the data streamlined and relevant.
Gathering the right data is the critical foundation for data analysis that truly moves the needle for a business. Rather than expending effort to meticulously analyze information that missed the mark, aligning your data collection to the analysis purpose leads to insights that unlock value and facilitate confident, informed decisions. As the old saying goes - garbage in, garbage out. Start with the right data to ensure your analysis output is actionable, accurate, and impactful.