If you thought these words were interchangeable, then you’d be wrong. Yet, one comes across incorrect usage of these terms every day. As part of the Analytics community however, you are expected to know the fine difference. So let’s get going.
The etymology of ‘Analysis’
The word ‘analysis’ is derived from the Greek word ‘analusis’ meaning ‘breaking up’. In other words, analysis is the process of breaking up a complex problem for a better understanding.
You may be surprised to know that the technique of analysis was used as long ago as the 4th century B.C., in mathematics and logic. Today, it is used casually to ‘analyse’ relationship break-ups to the more serious market analysis prior to starting a venture.
Analysis is applied across all fields. In business, a problem is identified and broken down into components for better perceptions and problem resolution. In chemistry, you have qualitative analysis when you identify the elements of a chemical compound, and quantitative analysis to find the proportion of each element. The chemical processes are further broken down to examine / analyse chemical reactions and processes. In GIS (or geospatial), analysis assumes another dimension. Software tools are applied to data with a geographical aspect, for processing information and deriving spatial (spatial analysis) or behavioural (network analysis) meaning. Stock market analysis is on the other hand, market evaluation for prediction of future trends. While fundamental analysis looks at the company details to assess internal variables, technical analysis looks at external factors, market trends, historical patterns and so on, with the help of tools /technical aids.
Now moving over to Analytics….
The etymology of ‘Analytics’
‘Analytics’ has its origin in the Greek word ἀnalytiká, meaning the “science of analysis”. In other words, analytics refers to the standardised and emperically established principles governing the various forms of analysis.
What maybe the other differences?
Analysis vs. Analytics
- While analysis uses logical reasoning and the cognitive process, analytics is more data-centric, based on historical or real-time data, requiring extensive computation.
- Analysis applies theories of logic and research, while analytics applies the principles of statistics, mathematics, machine learning techniques and modeling.
- Analysis may not adhere to a rigid code of practice. Analytics however, follows certain established principles and methodologies.
- Analytics moves beyond simple analysis, to discover meaningful patterns in the data. It makes use of statistical theories, computer operations and tools to identify trends and patterns, make conclusions, derive insights or workable solutions (models).
Businesses apply analytics to improve sales, decide pricing, predict demand or suggest solutions, and much more. Manufacturers use historical and real-time date (descriptive analytics) to diagnose problems within a product or processes (diagnostic analytics). Predictions are made and better solutions prescribed (predictive / prescriptive analytics). Insurance companies use location analytics for risk assessment, territory analysis, and decisions based on spatial contexts.
Thus we see how analysis and analytics are two separate terms. Analysis is what most entrepreneurs, economists or sociologists do. Analytics is what Quants, actuaries, data scientists and analytics professionals do.
So the next time around, pause for a moment before you use the word analysis or analytics!