We live in a world of data: There’s more of it than ever before, in a ceaselessly expanding array of forms and locations. Dealing with Data is your window into the ways organizations and data teams tackle the challenges of this new world to help their companies and their customers thrive.
Almost every modern organization is now a data-generating machine. As soon as a company’s systems are computerized, the data-generation engine starts up. When these systems connect with external groups — customers, subscribers, shareholders, stakeholders — even more data is generated, collected, and exchanged. And, as industrial, business, domestic, and personal Internet of Things devices become increasingly intelligent, they communicate with each other and share data to help calibrate performance and maximize efficiency. The result, as Sisense CEO Amir Orad wrote, is that every company is now a data company.
Smart use of your data can be the key to optimizing processes, identifying new opportunities, and gaining or keeping a competitive edge. But are you paying attention to all of your data? Do you have the means to handle every kind of data? And can you take full advantage of the insights it can reveal? Your answers will depend on whether you can gather and analyze both quantitative and qualitative data. Let’s consider the differences between the two, and why they’re both important to the success of data-driven organizations.
Digging into quantitative data
Most commonly, we think of data as numbers that show information such as sales figures, marketing data, payroll totals, financial statistics, and other data that can be counted and measured objectively.
This is quantitative data. It’s “hard,” structured data that answers questions such as “how many?” or “how often?” It’s in an organized format, usually rows and columns, and is stored as a relational database, in which there are relationships among these rows and columns.
All descriptive statistics can be calculated using quantitative data. It’s analyzed through numerical comparisons and statistical inferences and is reported through statistical analyses.
As quantitative data is always numeric, it’s relatively straightforward to put it in order, manage it, analyze it, visualize it, and do calculations with it. Spreadsheet software like Excel, Google Sheets, or traditional database management systems all mainly deal with quantitative data. These programs and systems are great at generating basic visualizations like graphs and charts from static data. The challenge comes when the data becomes huge and fast-changing.
Why is quantitative data important?
Quantitative data is often viewed as the bedrock of your business intelligence and analytics program because it can reveal valuable insights for your organization. These numbers show performance, efficiency, reach, market share, revenue in, and expenses out. This is fundamental information when it comes to understanding how your organization is doing.
Additionally, quantitative data forms the basis on which you can confidently infer, estimate, and project future performance, using techniques such as regression analysis, hypothesis testing, and Monte Carlo simulations.
These techniques allow you to:
- See trends and relationships among factors so you can identify operational areas that can be optimized
- Compare your data against hypotheses and assumptions to show how decisions might affect your organization
- Anticipate risk and uncertainty via mathematically modeling
Consequently, using quantitative data, you can make strategic and tactical decisions that will benefit your organization and drive growth.
What are the problems with quantitative data?
Despite its many uses, quantitative data presents two main challenges for a data-driven organization.
First, data isn’t created in a uniform, consistent format. It’s generated by a host of sources in different ways. To access it effectively, you need to organize it and clean it to avoid mistakes, oversights, and repetitions that could compromise the integrity of your data and, by extension, the accuracy of your insights.
The solution to this problem is to ensure that your BI and analytics platform can handle as many sources and forms of data as possible, both on-premises and on the cloud, so that you don’t neglect or miss any of it.
Second, and more challenging, is the fact that not all the information you generate and collect is structured, quantitative data. As data is produced from a growing array of sources, quantitative data may be as little as 20% of all the data available to most organizations. If you focus your efforts entirely on quantitative data, you’ll overlook a huge amount of valuable information, and your insights and decision-making could become distorted as a result. You need a solution that can access and analyze the other 80%: qualitative data.
Exploring qualitative data
Qualitative data is unstructured, meaning it’s not in a predefined format. In its raw state, it comes in a variety of forms: text, social media comments, phone call transcripts, various logs files, images, audio, video, and more.
Often, the information in qualitative data is a categorical variable. This means it describes the characteristics or qualities of data units, such as “what type,” “which category,” “who” (or “which persona”). These create a picture of the context and environment in which the data can help build an understanding of feelings, opinions, and intentions. That’s because qualitative data is concerned with understanding the perspective of customers, users, or stakeholders. This type of data is often collected through less rigid, measurable means than quantitative data. Examples include comments, recordings, interviews, focus group reports, and more, typically received in the natural language of the informants.
Qualitative data is much more subjective, “soft” information than quantitative data. However, advanced analytics can now identify and classify this information and transform it into findings that lead to game-changing insights for organizations.
As the sources of data continue to proliferate, an increasing proportion of it is unstructured and qualitative. It’s more complex, and it requires more storage. Traditional methods of gathering and organizing data can’t organize, filter, and analyze this kind of data effectively. Advanced technology and new approaches are needed. What seem at first to be very random, disparate forms of qualitative data require the capacity of data warehouses, data lakes, and NoSQL databases to store and manage them.
Qualitative data benefits: Unlocking understanding
Qualitative data can go where quantitative data can’t. For example, it’s the gateway to sentiment analysis — understanding how users, customers, and stakeholders think and feel, as well as what they do. Techniques that focus on qualitative data, such as content analysis and narrative analysis, enable you to:
- Analyze text to find the most common themes in open-ended data such as user feedback, interview transcripts, and surveys, so you can pinpoint the most important focus areas
- Better interpret feelings or perceptions about your organization, product, services, processes, or brand, to help identify what changes or innovations would be most effective
Having access to this information gives you a new dimension of insights on which to base decisions and determine the tactical and strategic direction of your organization. With qualitative data, you can understand intention as well as behavior, thereby making predictive analytics more accurate and giving you fuller insights. You can analyze and learn from the large volume of unstructured data to ensure that your data-driven decisions are as solid as possible.
For example, Skullcandy, the manufacturer of headphones, earbuds, and other audio and wireless products, uses predictive and sentiment analysis to understand customers better. This enables the company’s product development team to explore opportunities for reducing returns and warranty requests for new products before they’re even released and get reactions from customers about current products. Skullcandy uses these insights to hone its new products based on what customers say they like and dislike, so that it can offer more attractive products to its target market.
Getting the most from qualitative data
Qualitative data eludes the rigid categorization and the storage limitations of traditional databases. It provides the raw material for information that is more varied and harder to organize than structured, qualitative data. Making sense of and deriving patterns from it calls for newer, more advanced technology.
Natural language processing (NLP), involving machine learning, is how your BI and analytics platform can understand the meaning of unstructured data such as emails, comments, feedback, and instant messages. It enables search-driven analytics that allow you to process complex NLP, because you can ask the system questions using natural, everyday language. Plus, you can receive visualizations and embed insights into external apps, even if what you’re asking for is relatively complex from an analytical point of view.
Furthermore, systems powered by AI and augmented analytics continuously learn what people choose to do with data. Algorithms identify patterns in the data, and these make search results faster, more accurate, and more complete. You can integrate AI analytics tools with other interfaces like Amazon Alexa and chatbots, drawing on these technologies’ impressive developments in NLP, too.
With all this potential to find new insights, it’s no surprise that 97% of business leaders say their businesses are investing in big data and AI initiatives.
Better together: Working with qualitative data and quantitative data
Quantitative data is the bedrock of your BI and analytics. It provides a solid foundation on which you can build data visualizations and insights that are fundamental to your organization.
With that foundation in place, qualitative data enables you to take your analytics further, get more understanding from a fast-growing array of sources, and power your decision-making with data from even more perspectives.
You have to be able to work with both kinds of data in order to unlock the most comprehensive insights. Together, they can help set the stage for game-changing pivots and innovations that can keep your organization at the head of the pack.
Adam Murray began his career in corporate communications and public relations in London and New York before moving to Tel Aviv. He’s spent the last ten years working with tech companies like Amdocs, Gilat Satellite Systems, and Allot Communications. He holds a Ph.D. in English literature. When he’s not spending time with his wife and son, he’s preoccupied with his beloved football team, Tottenham Hotspur.