Data Analytics Examples: 9 Ways Businesses Are Channeling the Power of Data
From the outside looking in, technology careers can almost seem like mystical jobs, where every employee is working on an innovative project that will profoundly shape our future. While this can sometimes be the case, it’s important to remember that many technology careers also have practical applications for life and work today.
The field of data analytics is changing business best practices in industries from manufacturing to marketing. “Data analytics technologies and techniques are widely used in commercial industries to enable organizations to make more informed business decisions,” says Pushpraj Kumar, business analyst at iFour Technolab.
You know this tech career is important, but you’re still not clear on exactly how data analytics shapes the decisions organizations make on a daily basis. We spoke with experts to bring you nine data analytics examples in a variety of industries. Prepare to be surprised as you see how far-reaching a career in data analytics can be!
What is data analytics?
Before we talk about how data analytics is being used, you need to understand what it is. Data analytics may seem complicated, but the idea behind it is actually quite simple: It’s the process of sorting through raw data to find meaningful patterns. Data analytics is a powerful decision-making tool that allows business leaders to have all the information they need to move their organization in the right direction.
“There are oceans of useless raw data around us, and it is data analytics that closes the gap by making this data useful,” says Kirill Rebrov, cofounder of Demografy. Data analysts use a variety of tools and technologies to gather all sorts of data, like statistics about how much time users spend on a website, demographic information about customers or traffic patterns in a city.
Kumar shares that there are four main types of data analysis:
- Descriptive analytics reveal what happened in the past
- Diagnostic analytics answer why something happened
- Predictive analytics tell what will probably happen in the future
- Prescriptive analytics show what actions should be taken to make progress or avoid problems in the future
Once that data has been gathered and organized, it’s up to data analysts to interpret it according to the four types of data analytics. “Data can tell many different stories. The analysis lens you use will determine the outcome,” says Ryan Prestel, cofounder and CEO of JadeTrack.
9 Exciting examples of data analytics driving change
Businesses in every type of industry can harness the power of data analytics. “There are entire industries most people never think about for a career that leverage analytics skills,” says Jen Hood, analytics coach at The Career Force. These are just some of the ways business across various industries are putting data to work.
1. Increasing the quality of medical care
Healthcare facilities across the nation are making use of data analytics to provide higher-quality care and improve patient outcomes. One organization “analyzed data to predict negative health events that seniors could experience from home care,” Kumar says. Thanks to their data analysis, they were able to significantly reduce the number of patient hospitalizations and ER visits.
That’s just one example. With the implementation of electronic health records systems and an increasingly digitized healthcare system overall, there are worlds of opportunity for data-based innovations and advancements within the medical field.
2. Fighting climate change in local communities
Many local governments are dedicated to fighting the effects of climate change by creating a more sustainable community. It’s a goal they couldn’t achieve without help from data analytics. “By providing transparency to city-wide sustainability analytics, such as water use, energy use, waste and recycling and emissions, the entire community can do its part to improve energy efficiency and accelerate climate action efforts,” Prestel says.
3. Revealing trends for research institutions
Organizations that conduct research using polls or surveys rely on strong data analytics to find patterns in their results. “Data analytics is vital in analyzing surveys, polls, public opinion, etc. For example, it helps segment audiences by different demographic groups and analyze attitudes and trends in each of them, producing more specific, accurate and actionable snapshots of public opinion,” Rebrov says.
4. Stopping hackers in their tracks
Cyber security is increasingly important in our digital world. Data analytics—sometimes called security analytics in this field—helps these professionals protect businesses and individuals from hackers. “Data sets are gathered and analyzed in order to create improved detection of threats and create a proactive way of dealing with those threats,” says Will Ellis, founder of Privacy Australia and IT security consultant.
5. Serving customers with useful products
Companies that create and sell products drill into their data to learn more about what their customers are looking for. Data analytics gives product developers insights into things like customers’ budgets and the features they want to see before making a purchase. The work of data analysts influences everything from the design of next year’s trendiest baby stroller to the features of a new luxury sedan.
6. Driving marketing campaigns for businesses
Marketing and data analytics often go hand in hand. Marketing teams refer to data analytics on a regular basis so they can gauge the success of their campaigns and make changes if necessary. “Data analytics is used by marketing teams to run targeted marketing campaigns by segmenting audiences since segmented campaigns produce higher return on investment,” Rebrov says.
7. Promoting smart energy usage for utility companies
Many people don’t think much about their household’s energy usage, but utility companies are taking advantage of data analytics to change that. “For example, energy companies are offering customers up to one-minute real-time energy data,” Prestel says. “With the ability to track performance, customers easily understand and manage their energy demand to save time and money.”
8. Improving the insurance industry
Insurance companies have always relied heavily on data to make business decisions that serve customers well. Now technology advancements in data analytics are taking the industry even further.
“Data is already being used to help insurers set fairer and more accurate policy premiums, identify fraudulent claims and improve their marketing efforts,” Kumar says. He adds that some companies take this further by offering programs like good-driver discounts that allow them to monitor their driving habits and use the data to reduce pricing.
9. Creating manufacturer warranties that make sense
Cars, computers and everything in between come with free or paid warranties. Many people don’t realize that manufacturing companies need to carefully analyze the data about their products to offer these warranties. “Most larger manufacturers have warranty departments which rely on analysts to predict what expenses are going to be,” Hood says.
Dig into the data
These data analytics examples have shown you how much of an impact this tech career can have on all types of organizations. You’re intrigued by the possibilities of working in data analytics, but you still need to learn more about daily work in this career.
Dig into even more data about this job title with our article, “What Does a Data Analyst Do? Exploring the Day-to-Day of This Tech Career.”