Different fields of science, economics, engineering, and marketing accumulate and store data primarily in electronic databases. Appropriate and well-established decisions should be made using the data collected. It is practically impossible to make sense of datasets containing more than a handful of data points without the help of computer programs. To be certain of the insights that the collected data provides and to make further decisions, data mining is performed where we go through distinctive analysis processes. Exploratory data analysis is key, and usually the first exercise in data mining. It allows us to visualize data to understand it as well as to create hypotheses for further analysis. The exploratory analysis centers around creating a synopsis of data or insights for the next steps in a data mining project.

EDA actually reveals ground truth about the content without making any underlying assumptions. This is the fact that data scientists use this process to actually understand what type of modeling and hypotheses can be created. Key components of exploratory data analysis include summarizing data, statistical analysis, and visualization of data. Python provides expert tools for exploratory analysis, with pandas for summarizing; scipy, along with others, for statistical analysis; and matplotlib and plotly for visualizations.

That makes sense, right? Of course it does. That is one of the reasons why you are going through this book. After understanding the significance of EDA, let's discover what are the most generic steps involved in EDA in the next section.

Having understood what EDA is, and its significance, let's understand the various steps involved in data analysis. Basically, it involves four different steps. Let's go through each of them to get a brief understanding of each step:

• Problem definition: Before trying to extract useful insight from the data, it is essential to define the business problem to be solved. The problem definition works as the driving force for a data analysis plan execution. The main tasks involved in problem definition are defining the main objective of the analysis, defining the main deliverables, outlining the main roles and responsibilities, obtaining the current status of the data, defining the timetable, and performing cost/benefit analysis. Based on such a problem definition, an execution plan can be created.
• Data preparation: This step involves methods for preparing the dataset before actual analysis. In this step, we define the sources of data, define data schemas and tables, understand the main characteristics of the data, clean the dataset, delete non-relevant datasets, transform the data, and divide the data into required chunks for analysis.
• Data analysis: This is one of the most crucial steps that deals with descriptive statistics and analysis of the data. The main tasks involve summarizing the data, finding the hidden correlation and relationships among the data, developing predictive models, evaluating the models, and calculating the accuracies. Some of the techniques used for data summarization are summary tables, graphs, descriptive statistics, inferential statistics, correlation statistics, searching, grouping, and mathematical models.
• Development and representation of the results: This step involves presenting the dataset to the target audience in the form of graphs, summary tables, maps, and diagrams. This is also an essential step as the result analyzed from the dataset should be interpretable by the business stakeholders, which is one of the major goals of EDA. Most of the graphical analysis techniques include scattering plots, character plots, histograms, box plots, residual plots, mean plots, and others. We will explore several types of graphical representation in Chapter 2, Visual Aids for EDA.