CHALLENGES AND LIMITATIONS OF DESCRIPTIVE ANALYSIS

Descriptive Analysis Defined and Usage

Definition
Descriptive analytics is the process of summarizing and visualizing historical data to
understand what has happened in the past. It is often the first step in data analysis, as it
helps to identify patterns, trends, outliers, and correlations. Descriptive analytics can
provide valuable insights for business decision making, but it also has some limitations
that need to be considered. In this article, we will explore the benefits and limitations of
descriptive analytics for business decision making, and how to use it effectively.

Usage
The historical data collection for descriptive analytics is done using two main techniques
– data aggregation and data mining. A company collects and organizes data into
manageable data sets with data aggregation. The data collected is analyzed with
various tools and methods like summary statistics or pattern tracking. Analysts use
these to study data and uncover patterns and, in turn, performance.

Examples of how companies might use descriptive analytics:

● Some outcomes of descriptive analytics include creating a wide range of reports

related to sales, revenue, and workflow, including inventory reports
● Insights into the use of social media and engagement within it from various
platforms and based on multiple metrics
● Summary of events that have concluded like marketing campaigns, operational
data, sales-related measurables
● Collation of survey results
● Reportage on general trends
● This form of analysis is precious in assessing data from learners to create better
outcomes from training programs.

Types of Descriptive Analytics

Descriptive analysis can be categorized into four types which are measures of
frequency, central tendency, dispersion or variation, and position. These methods are
optimal for a single variable at a time.
1. Measures of Frequency

In descriptive analysis, it’s essential to know how frequently a certain event or

response is likely to occur. This is the prime purpose of measures of frequency to
make like a count or percent.

For example, consider a survey where 500 participants are asked about their
favorite IPL team. A list of 500 responses would be difficult to consume and
accommodate, but the data can be made much more accessible by measuring
how many times a certain IPL team was selected.

2. Measures of Central Tendency

In descriptive analysis, it’s also important to find out the Central (or average)
Tendency or response. Central tendency is measured with the use of three
averages — mean, median, and mode. As an example, consider a survey in which
the weight of 1,000 people is measured. In this case, the mean average would be
an excellent descriptive metric to measure mid-values.

3. Measures of Dispersion
 Sometimes, it is important to know how data is divided across a range. To
elaborate this, consider the average weight in a sample of two people. If both
individuals are 60 kilos, the average weight will be 60 kg. However, if one
individual is 50 kg and the other is 70 kg, the average weight is still 60 kg.
Measures of dispersion like range or standard deviation can be employed to
measure this kind of distribution.

4. Measures of Position

Descriptive analysis also involves identifying the position of a single value or its
response in relation to others. Measures like percentiles and quartiles become
very useful in this area of expertise.

Advantages and Disadvantages of Descriptive Analytics

Advantages of Descriptive Analytics

Although relatively simplistic as analytical approaches go, descriptive analytics

nevertheless has many advantages. Descriptive analytics:

● Presents otherwise complex data in an easily digestible format.

● Provides a direct measure of the incidence of key data points.
● Is inexpensive and only requires basic mathematical skills to carry out.
● Is faster to carry out, especially with help from tools like Python or MS Excel.
● Relies on data that organizations already have access to, meaning there’s no
need to source additional data.
● Looks at a complete population (rather than data sampling), making it
considerably more accurate than inferential statistics.

Disadvantages of Descriptive Analytics

Now that we’ve looked at the strengths of descriptive analytics—but where does it fall
short? Some disadvantages of descriptive analytics include:

● You can summarize data sets you have access to, but these may not tell a
complete story.
● You cannot use descriptive analytics to test a hypothesis or understand why data
present the way they do.
 ● You cannot use descriptive analytics to predict what may happen in the future.
● You cannot generalize your findings to a broader population.
● Descriptive analytics tells you nothing about the data collection methodology,
meaning the data set may include errors.

As you may suspect, although descriptive analytics are useful, it’s important not to
overstretch their capabilities. Fortunately, we have diagnostic and predictive analytics to
help fill in the gaps where descriptive analytics falls short.

Limitations of using Descriptive Analytics

Training teams depend too heavily on descriptive analytics, limiting their capacity to
explain why something occurred (or did not occur). With merely descriptive analytics,
answering what occurs next is nearly impossible.

Limitations of descriptive analytics include:

● No context within your data. The nuance and layers that explain why a
particular course is effective, or why one event exceeded expectations and
another did not are not possible. Descriptive analytics provide the basis for
answering why but the heavy lifting is on your team. Descriptive analytics are tied
to activity metrics, not the KPIs that measure training’s performance.
● Weak relationships with other data. Descriptive data often lacks a solid
relationship with other data points. Training teams have to infer these
relationships, which can lead to incorrect conclusions and difficult decision
making. For example, you know a particular cohort of learners has performed
poorly across a specific course, but you only have test scores to consult, not
other data points leading to the poor performance. The poor results may be due
to scheduling inefficiencies or technical issues.
● Data is frozen in time. Descriptive data alone can only ever show you what
happened in the past. Training teams have been stuck in this backwards view for
so long, it is a shock to realize how sophisticated predictive analysis has become
for other teams, especially sales and marketing. This is the limitation that teams
hit hardest, most often.

The Bottom Line

Descriptive analytics can be a great way for companies to begin analyzing their
performance metrics. That's because it's one of the easiest forms of data analysis. It's a
straightforward approach to provide management, investors, and analysts with a direct
comparison to similar metrics, such as quarter-over-quarter revenue. Using past
performance can help key stakeholders better understand what happened so they make
better, more informed decisions for the future.
References:
● https://www.linkedin.com/advice/1/what-benefits-limitations-descriptive-
analytics#:~:text=Descriptive%20analytics%20helps%20businesses
%20identify,always%20lead%20to%20actionable%20recommendations.
● https://careerfoundry.com/en/blog/data-analytics/descriptive-analytics/
#:~:text=The%20main%20disadvantage%20of%20descriptive,content
%20curation%2C%20and%20learner%20outcomes.
● https://www.softwebsolutions.com/resources/benefits-of-descriptive-
analytics.html#:~:text=In%20essence%2C%20descriptive%20analytics
%20paints,invaluable%20insights%20into%20past%20events.
● https://www.jaspersoft.com/articles/what-is-descriptive-
analytics#:~:text=Descriptive%20analytics%20can%20be%20applied,historical
%20overview%20of%20its%20operations.
● https://www.getadministrate.com/blog/understanding-the-limitations-of-
descriptive-analytics/
● https://www.analyticssteps.com/blogs/overview-descriptive-analysis
● https://www.investopedia.com/terms/d/descriptive-
analytics.asp#:~:text=Descriptive%20analytics%20can%20help%20to,the
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