Descriptive Analysis and Its Implementation in Business

Business processes always involve the process of identifying problems that need to be resolved. Not limited to product development needs, business analysis is also carried out in the marketing process. Each different activity has a different analysis stage.

Action plans that have been carried out over time form a pattern that needs to be evaluated together. Usually, descriptive analysis is needed to be able to track and understand business metrics according to performance or trends that are occurring in the company.

Descriptive analytics helps everyone in the company make more informed decisions to guide the business in the right direction. This reveals patterns that may be hidden in raw data in order to see progress and evaluate business performance.

Understanding Descriptive Analysis

Descriptive analysis is a statistical method used to search for and summarize historical data with the aim of identifying a pattern or meaning. Descriptive analysis is the most common and basic form used by companies.

Every part of a business can use descriptive analytics to monitor operational performance and monitor trends. Examples of descriptive analysis include KPIs such as year-over-year sales growth percentage, and revenue per customer.

The form or results of descriptive analysis appear in financial reports, dashboards, and presentations. Usually, the focus of this analysis is a summary or emphasis of patterns that occur in a certain time period.

How Descriptive Analysis Works

Data aggregation and data mining are two techniques used in descriptive analysis to discover historical data. First of all, the data is collected and sorted based on data aggregation to make the data set easier for analysts to manage.

The data mining process describes the next steps of analysis and involves searching the data to identify patterns and meaning. Patterns identified from this process are analyzed to find patterns of interaction between an action plan and the environment and its target audience.

Many companies use data intelligence, or a group of methods and tools used to collect and analyze data. After that, conclusions and action plans will be made based on these findings.

There is also analysis using spreadsheet formulas to apply basic descriptive analysis to combined data, producing KPIs and other statistics which are then included in the report.

Implementation of Descriptive Analytics Used by Businesses

Companies use descriptive analysis in many parts of the business to evaluate how well it is operating. The descriptive analysis process also helps ensure a business is on track to achieve its goals.

Business leaders and financial experts track common financial metrics generated by descriptive analysis, such as quarterly revenue and expense growth. The marketing team uses descriptive analytics to evaluate campaigns by monitoring conversion metrics and the number of social media followers. The metrics generated by descriptive analytics are used in the following ways

1. Report 

Descriptive analysis produces key financial metrics that are included in a company's financial reports. Other common reports also use descriptive analysis to highlight aspects of business performance.

Reports like this aim to optimize operational processes that still need to be improved. However, an action plan that is already running well requires periodic reports so that you can monitor business developments that are running according to plan.

2. Data visualization

You can also leverage descriptive analytics to display metrics in charts and other graphical representations. Data visualization usually makes it easier for stakeholders to communicate the impact of a decision more efficiently.

In this way, more people will be able to understand the message conveyed through a series of data, especially for large amounts of data.

3. Dashboards

Executives, managers and company employees can also use the dashboard to track progress and manage their daily workload. The dashboard presents a selection of KPIs and other important information tailored to each person's needs.

This information is usually represented in the form of graphs or other visualizations so that all stakeholders can understand it quickly. Data in the form of dashboards can usually also be arranged according to the desired period for each stakeholder according to their needs.

In general, descriptive analysis is an important part and is related to company strategy. The Strategic Business Analysis program can help business executives to equip themselves with strategic analysis skills in making decisions based on existing data.