Data Processing: Transforming raw data to usable information.

Okay, so you are now collecting the right data to gain more insights into your business operations, customer demographics and industry trends.  Now it is time to transform all that raw data into usable information by processing the data. Data processing involves four steps, data cleansing,  data integration, application integration, and data transformation. In this article, we will discuss each of these steps in detail.

Processing data is the second step in the Business Data and Analytics Journey.

Data Cleansing

The first step in processing data is to clean it. This involves identifying and correcting errors, removing duplicates, and filling in missing values. Data cleaning is essential because it ensures that the data is accurate and reliable. Without proper cleaning, any analysis or conclusions drawn from the data may be incorrect.

Data cleaning includes techniques such as:

• Removing outliers: Outliers are data points that are significantly different from the rest of the data. They can skew the results of an analysis and should be removed before further processing.

• Managing missing values: Missing values can be managed in several ways, including deleting the entire record, imputing the missing value with a mean or median, or using more advanced techniques such as regression or neural networks to fill in the missing values.

• Removing duplicates: Duplicate records can skew the results of an analysis and should be removed before further processing.

• Standardizing data: Data that is measured on different scales or units should be standardized to ensure that they are comparable. This can involve scaling or normalizing the data.

• Data validation: This involves checking the data for errors or inconsistencies. For example, you may want to check that dates are in the correct format or that phone numbers are in the correct format.

Data Integration

The second step in processing data is to integrate it. Data integration is an essential step that involves combining data from multiple sources into a single dataset. It ensures that all relevant data is included in the analysis, which is critical for ensuring the accuracy and completeness of any conclusions drawn from the data. Data integration can be challenging because different datasets may have different formats, structures, and levels of detail. To successfully integrate data, it is important to standardize the format and structure of the data.

Data integration includes techniques such as:

• Data mapping: This involves identifying the common fields between different datasets and mapping them to a standard format. For example, if you have customer data from multiple sources that includes different field names for the same information (e.g., "customer_id" vs. "customer_number"), you will need to map these fields to a standard format before combining the data.

• Data transformation: This involves converting the data into a format that can be easily analyzed. For example, if one dataset includes data in metric units and another dataset includes data in imperial units, you may need to convert one or both datasets to a common unit of measurement before combining them.

• Data merging: This involves combining two or more datasets based on a common field. For example, if you have customer data from multiple sources that includes information about their orders, you can merge the customer data with the order data based on the customer ID.

• Data joining: This involves combining two or more datasets based on a relationship between the datasets. For example, if you have customer data and product data, you can join the two datasets based on the product ID to get information about which products each customer has purchased.

• Data aggregation: This involves combining data from multiple sources into a single record by aggregating the data at a higher level of granularity. For example, if you have sales data for multiple products across different regions, you can aggregate the data by product and region to get a summary of sales by product category and geographic location.

Application Integration

An optional step depending on the organization is application integration, which is the process of creating connections between software applications so that data from one application can automatically flow to other applications or databases based on an operational workflow.

Application integration can be used to improve efficiency, reduce costs, and enhance the functionality of an organization's IT systems. By integrating different applications, organizations can automate processes, streamline workflows, and share data across different systems.

There are various techniques for application integration, including:

• Middleware: Middleware is software that acts as an intermediary between different applications, allowing them to communicate with each other. It provides a standardized interface for integrating different systems and can be used to translate data between different formats.

• API (Application Programming Interfaces) integration: API integration involves integrating different applications by using their APIs. APIs provide a standardized way for applications to communicate with each other, allowing them to share data and functionality.

• ESB (Enterprise Service Bus): An ESB is a middleware platform that provides a centralized location for integrating different systems. It acts as an intermediary between different applications, allowing them to communicate with each other and providing a standardized interface for integrating different systems.

Application integration is an important aspect of modern IT systems, as it allows organizations to leverage the functionality of multiple applications to improve their operations and decision-making processes. With proper application integration, organizations can gain valuable insights from their data and make informed decisions based on those insights.

Data Transformation

The third step in processing data is to transform it. Data transformation involves converting the data into a format that can be easily analyzed. Data transformation may involve scaling or normalizing the data, encoding categorical variables, or aggregating data at different levels. The goal of data transformation is to make the data more usable and understandable.

Data transformation can involve techniques, such as:

• Scaling or normalizing data: This involves converting the data into a standard range to ensure that all variables are on the same scale.

• Encoding categorical variables: This involves converting categorical variables into numerical values so that they can be analyzed using statistical techniques.

• Aggregating data: This involves combining data from multiple sources into a single record by aggregating the data at a higher level of granularity. For example, if you have sales data for multiple products across different regions, you can aggregate the data by product and region to get a summary of sales by product category and geographic location.

• Feature engineering: This involves creating new features from existing data that can be used in analysis or modeling. For example, if you have customer data that includes their age and income, you can create a new feature called "age/income ratio" that may be more predictive of certain outcomes.

Conclusion

Data processing is an essential step in any data-driven decision-making process. It involves multiple steps, including data cleansing, data integration, data transformation and application integration to get the data ready for analysis. By following these steps, you can ensure that your data is accurate, reliable, and usable. With proper processing, you can gain valuable insights from your data and make informed decisions based on those insights. Now it is time to centralize your data, which is the key to fast convenient analytic insights. 

Ready to get started? Contact us at Scalesology and let’s together ensure your business scales with the right data insights and technology.