Data Preparation and Why It’s Important For Modern Decision Making
Today's decision-makers are swimming in data. In fact, it's been estimated that by 2025, people will be generating 180 zettabytes of data per year, which is almost three times as much as in 2020.
So how can managers make sense of all this information and gain the insights they need to succeed?
The answer is data preparation. Simply put, data preparation is the process of taking unstructured data and turning it into something that's usable and insightful. This might include cleaning up data sets, formatting them in a specific way, or applying algorithms that transform the data into a more meaningful form.
The Importance of Data Preparation
Why is data preparation so important? Because it allows managers to glean insights from data that would be otherwise hidden in a mass of irrelevant information. By preparing unstructured data properly, managers can more easily identify patterns and trends, which in turn can help them make better informed decisions.
To give an example, imagine you're the manager of a product innovation team for a new line of swimsuits. You've been tasked with coming up with new designs that will increase sales by 20%. To achieve this, you'll need to gather data on what's selling well in the market and what styles are most popular with consumers.
But simply gathering data is not enough. If you want to find trends and patterns, you need to prepare the data first. This might involve cleaning it up, removing duplicates, and sorting it into specific categories. Once the data is properly prepared, you can then start to look for trends, such as which styles are being purchased together, which colors are most popular, and so on. Armed with this information, you can then begin to develop new designs that are more likely to succeed.
Data preparation is thus an essential step in any data-driven decision-making process. By taking the time to prepare data properly, managers can gain a deeper understanding of what's really going on in their businesses and make better decisions as a result.
There’s no question that data is important for making good decisions. The challenge lies in extracting insights from the raw data so that it can be effectively used to make informed decisions. This process is known as data preparation, and it’s one of the most important steps in turning data into knowledge.
Raw data is just that – raw. It’s unstructured and doesn’t provide much value in terms of insights. To get the most out of your data, it needs to be converted into structured knowledge. This involves organizing the data into a format that makes it easy to analyze and understand. Only then can you glean meaningful insights from it.
Data preparation is a critical step in the data science process. It allows you to clean and organize your data so that you can focus on extracting insights and making decisions. Data preparation is also necessary for performing statistical analysis and building models.
There are a number of different tools and techniques for preparing data, and the approach you take will depend on the type of data you’re working with. Some of the most common methods include:
- Data cleaning: This involves removing duplicates, identifying invalid values, and correcting errors.
- Data transformation: This includes transforming data from one format to another, such as from text to numbers or vice versa.
- Dimensionality reduction: This is used to reduce the number of dimensions in a dataset, making it easier to analyze.
- Feature extraction: This is used to identify and extract the most important features from a dataset.
The goal of data preparation is to simplify and organize your data so that you can focus on extracting insights. By taking the time to properly prepare your data, you can significantly improve your chances of success in data science projects.
That said, the first step before all of this is perhaps the most important: Collecting the requisite data. So the next time you’re planning a decision-making initiative, don’t forget to factor in data gathering and sorting as part of the process.
Gathering and sorting data is an essential part of the product and service innovation process. But, it’s not just about quantity; the quality of the data is also important.
Ideally, you want to have a variety of data sources that can be used to generate insights. This includes both internal and external data. Internal data is information that’s specific to your company, such as sales data, customer data, or production data. External data is information that’s outside your company, such as demographic information, economic indicators, or industry trends.
Combining internal and external data can be particularly useful for generating insights. External data can help you understand your customers and markets better, while internal data can give you a better understanding of your products and operations.
When it comes to gathering and sorting data, there’s no one-size-fits-all approach. The approach you take will depend on the type of data you’re working with and the project you’re trying to achieve. However, there are a few tips that can help you get started:
- Make sure you have the right tools for the job. There are a number of different tools and techniques for preparing data, and the approach you take will depend on the type of data you’re working with.
- Collect as much data as possible. The more data you have, the better your chances of finding insights.
- Sort and filter the data to eliminate irrelevant data and focus on the most important information.
- Use sampling to get a representative sample of the data.
- Take into account the quality of the data. The quality of the data can vary significantly, so be sure to use the right techniques to deal with low-quality data.
- Combining internal and external data can be particularly useful for generating insights. External data can help you understand your customers and markets better, while internal data can give you a better understanding of your products and operations.
- Understand the limitations of the data. Data is never perfect, so be aware of the limitations of the data and use caution when drawing conclusions from it.
The bottom line is that data is an essential ingredient for making good decisions. However, data alone is not enough. It needs to be converted into structured knowledge through the process of data preparation. This is essential for extracting meaningful insights and making informed decisions.
Commerce.AI's Data Engine
Commerce.AI offers the world's largest product and service data engine, with over 1 billion products and service offerings represented in the data. We power some of the largest e-commerce and product companies in the world.
Crucially, this isn't just raw data, but meticulously prepared and cleaned data, with APIs, that are regularly updated. We also dedupe, merge and reconcile data across sources to provide a single view of the product and service universe.
This unique data engine underpins our products - the first autonomous commerce engine. It allows us to deliver the most comprehensive product and service insights in the world.
Contact us for a demo and get started today.