Advantages of Data Analytics | Disadvantages of Data Analytics
This page covers advantages and disadvantages of Data Analytics. It mentions Data Analytics advantages and Data Analytics disadvantages.
Definition: The process of analyzing data sets to derive useful conclusions and/or informations is known as data analytics. The data analytics involve various operations on the data sets or tables available in databases. The operations include data extraction, data profiling, data cleansing and data deduping etc. The figure-1 depicts the data analytics processes to derive useful graphs/textual informations.
Data analytics tools and solutions are used in various industries such as banking, finance, insurance,
telecom, healthcare, aerospace, retailers, social media companies etc.
Refer definition and basic block diagram of data analytics >> before going through advantages and disadvantages of data analytics.
Advantages of Data Analytics
Following are the advantages of data Analytics:
➨It detects and correct the errors from data sets with the help of data cleansing. This helps in improving quality of data and consecutively benefits both customers and institutions such as banks, insurance and finance companies.
➨It removes duplicate informations from data sets and hence saves large amount of memory space. This decreases cost to the company.
➨It helps in displaying relevant advertisements on the online shopping websites based on historic data and purchase behaviour of the users. Machine learning algorithms are applied for the same. This helps in increasing revenue and productivity of the companies.
➨It reduces banking risks by identifying probable fraudulent customers based on historic data analysis. This helps institutes in deciding whether to issue loan or credit cards to the applicants or not.
➨It is used by security agencies for surveillane and monitoring purpose based on informations collected by huge number of sensors. This helps in preventing any wrongdoings and/or calamities.
Disadvantages Data Analytics
Following are the disadvantages of data Analytics:
➨This may breach privacy of the customers as their information such as purchases, online transactions, subscriptions are visible to their parent companies. The companies may exchange these useful customer databases for their mutual benefits.
➨The cost of data analytics tools vary based on applications and features supported. Moreover some of the data analytics tools are complex to use and require training. This increases cost to the company willing to adopt data analytics tools or softwares.
➨The information obtained using data analytics can also be misused against group of people of certain country or community or caste.
➨It is very difficult to select the right data analytics tools. This is due to the fact that it requires knowledge of the tools and their accuracy in analysing the relevant data as per applications. This increases time and cost to the company.