Statistical analysis is an aspect of business intelligence (BI) that involves the collection and scrutiny of business data and the reporting of trends. Statistical analysis examines every single data sample in a population (the set of items from which samples can be drawn), rather than a cross sectional representation of samples as less sophisticated methods do.
Statistical analysis can be broken down into five discrete steps, as follows.
- Describe the nature of the data to be analyzed.
- Explore the relation of the data to the underlying population.
- Create a model to summarize understanding of how the data relates to the underlying population.
- Prove (or disprove) the validity of the model.
- Employ predictive analytics to anticipate future trends.