Data Analysis Explained: Four Steps From Raw Records to a Real Decision

Data analysis is the process of examining existing records to identify patterns that inform a decision, and can be broken down into four core steps: forming a question tied to a decision, collecting relevant records, grouping those records, and comparing the groups. A metric is a defined number chosen for tracking, and many analytical disputes stem from disagreements over how such numbers are defined. A practical example illustrates the process: a coffee shop owner uses three months of sales data to determine whether to extend morning or evening hours, grouping roughly 1,200 transactions by time slot. The comparison reveals the morning hour generates nearly four times more daily revenue than the evening slot, making the decision straightforward. However, a complete analysis requires checking costs against revenue, since factoring in staff wages can reverse the conclusion entirely.