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What is Data Processing and Why is it Important?

  • Vrinda Mathur
  • Jun 28, 2022
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Companies who do not handle data limit their access to the very data that might sharpen their competitive edge and provide important business insights. That is why it is critical for all businesses to grasp the importance of processing all of their data and how to do it.


Whether you use the internet to study about a certain topic, conduct financial transactions online, purchase meals, or anything else, data is created every second. The usage of social networking, internet commerce, and video streaming services has all contributed to the explosion in data. 


According to Domo's research, every individual on the earth will generate 1.7MB of data every second in 2020. And data processing is required to use and get insights from such vast amounts of data. Before we proceed, let us define data processing.


What is Data Processing?


Any company cannot benefit from raw data. Data processing is the process of taking raw data and converting it into usable information. A team of data scientists and data engineers at a company often does it in a step-by-step method. Raw data is gathered, filtered, sorted, processed, analyzed, and stored before being displayed in a usable way.


Data Processing is critical for firms to develop better business strategies and gain a competitive advantage. Employees throughout the business can comprehend and use the data if it is converted into a comprehensible format such as graphs, charts, and texts.


When data is processed, it is gathered and converted into usable information. Data processing, which is often undertaken by a data scientist or team of data scientists, must be done appropriately so that the end product, or data output, is not harmed.


Data processing begins with raw data and turns it into a more legible format (graphs, papers, etc.), providing it the shape and context required for computer interpretation and use by personnel throughout a company.


Also Read | What is Data Management? 



Why is Data Processing Important?


The type of data processing you use will impact  how quickly a query is answered and how trustworthy the outcome is. As a result, the approach must be carefully chosen. Transaction processing, for example, should be the preferred technique in situations where availability is critical, such as a stock exchange portal.


It is critical to distinguish between data processing and a data processing system. The rules that govern how data is turned into meaningful information are known as data processing rules. 


A data processing system is an application that is designed to handle a certain sort of data. A timesharing system, for example, is intended to optimize time sharing processes. It can also be used for batch processing. However, it will not scale well for the job.


In this sense, when we say "choose the proper data processing type for your purposes," we mean "choose the right system." 


What is a Data Processing Cycle?


The data processing cycle is made up of many phases in which raw data (input) is fed into a process (CPU) to generate actionable insights (output). Each stage is performed in a specified order, although the entire process is repeated cyclically. 


The output of the first data processing cycle can be saved and used as the input for the following cycle. In general, there are six major steps of data processing cycle:


  1. Gathering


The initial phase in the data processing cycle is the acquisition of raw data. The raw data obtained has a significant influence on the result produced. 


As a result, raw data should be collected from defined and accurate sources in order for the future conclusions to be legitimate and usable. Raw data might contain monetary information, website cookies, a company's profit/loss accounts, user activity, and so on.


  1. Preparation of Data


The data collection step is followed by the data preparation stage. Data preparation, often known as "pre-processing," is the stage in which raw data is cleaned up and structured in preparation for the next stage of data processing. 


Raw data is thoroughly verified for mistakes during preparation. This step's goal is to get rid of bad data (redundant, incomplete, or erroneous data) and start creating high-quality data for the greatest business intelligence.


  1. Data Entry


The clean data is then put into the destination (which may be a CRM like Salesforce or a data warehouse like Redshift) and translated into a language that it understands. Data entry is the initial stage in which raw data is transformed into usable information.


  1. Processing of Data


The raw data is processed by numerous data processing methods in this stage, including machine learning and AI algorithms, to produce a suitable result. This stage may differ slightly from one procedure to the next based on the data source being processed (data lakes, online databases, linked devices, etc.) and the intended application of the result.


  1. Output


Finally, the data is communicated and shown to the user in a readable format, such as graphs, tables, vector files, audio, video, documents, and so on. This output can be saved and processed further in the next data processing cycle.


  1. Storage


Storage is the final phase in the data processing cycle, when data and metadata are saved for later use. This enables for easy access and retrieval of information when needed, as well as immediate usage as input in the next data processing cycle.


Also Read | Guide to Data Profiling


Types of Data Processing


Depending on the purpose of the data, many data processing techniques exist. This article will go through the five major forms of data processing.

The image shows the Types of Data Processing which includes Business Data Processing, Processing of Scientific Data, Bulk Processing, Processing in Real Time and Online Processing

Types of Data Processing


  1. Business Data Processing


Commercial data processing is a way of using typical relational databases that involves batch processing. It entails feeding massive amounts of data into the system and producing massive amounts of output while employing fewer processing operations. 


It essentially integrates commerce and computers in order to be beneficial for business. The data handled by this system is typically standardized, therefore there is a significantly smaller likelihood of mistake.


Many manual tasks are mechanized using computers to make them easier and more error-proof. Computers are employed in business to turn raw data into information that is relevant to the business. Accounting applications are typical data processing examples.


  1. Processing of Scientific Data


Scientific data processing, as opposed to commercial data processing, makes extensive use of computing procedures but with lesser amounts of inputs and outputs. Arithmetic and comparison operations are among the computing operations. 


Any possibility of inaccuracy is unacceptable in this form of processing since it would lead to incorrect decision-making. As a result, the process of verifying, categorizing, and standardizing the data is done with great care, and a wide range of scientific procedures are employed to guarantee that no incorrect associations or conclusions are made.


This takes considerably longer than commercial data processing. Processing, managing, and disseminating science data products and aiding scientific analysis of algorithms, calibration data, and data products are prominent examples of scientific data processing, as is keeping all software, calibration data, and data products under rigorous configuration control.


  1. Bulk Processing


Batch processing is a sort of data processing in which several cases are processed at the same time. It is mainly employed when the data is homogeneous and in big amounts, and it is gathered and processed in batches. Batch processing is the execution of an activity concurrently, simultaneously, or sequentially. 


Simultaneous batch processing happens when all cases are performed by the same resource at the same time. Sequential batch processing happens when various cases are executed by the same resource either immediately or immediately after one another.


  1. Processing in Real Time


Real-time processing is similar to transaction processing in that it is employed when immediate output is required. However, they differ in how they handle data loss. Incoming data is computed as rapidly as possible with real-time processing. 


If it discovers a mistake in the incoming data, it ignores it and carries on to the next block of data. The most popular example of real-time data processing is GPS tracking programs.

In comparison, consider transaction processing. Transaction processing aborts ongoing processing and reinitializes in the event of an error, such as a system failure. In circumstances when approximate responses suffice, real-time processing is chosen over transaction processing.


  1. Online Processing


In today's database systems, "online" means "interactive" and "within the limitations of patience." The inverse of "batch" processing is "online" processing. Online processing, like traditional query processing engines, may be developed from a set of relatively basic operators. 


Analytical activities that are performed online frequently include significant portions of big datasets. As a result, it should come as no surprise that today's online analytical tools provide interactive performance. Precomputation is the key to their success. Most Online Analytical Processing systems compute the response to each point and click before the user ever launches the program. 


In truth, many Online processing systems conduct the calculation inefficiently, but because the processing is done in advance, the end-user is unaware of the performance issue. This sort of processing is employed when data must be processed continually and automatically supplied into the system. 


Data Processing is a technique for manipulating data. It refers to the transformation of raw data into meaningful, machine-readable material. It is essentially a method of transforming raw data into relevant information. 


Typically, this involves the utilization of very basic, repetitive actions to analyze massive amounts of comparable data. Raw data is the input that is processed in order to produce meaningful output.


It is the transformation of data into valuable information. Data processing is organized into six main steps: data gathering, data storage, data sorting, data processing, data analysis, data display, and conclusions.


The cloud is the future of data processing. Cloud computing expands on the ease of current electronic data processing systems by increasing their speed and efficacy. More data for each company to use and more important insights to extract means faster, higher-quality data.


Companies are reaping enormous benefits as big data migrates to the cloud. Big data cloud technologies enable businesses to consolidate all of their platforms into a single, readily customizable solution. Cloud technology effortlessly blends the new with the old when software changes and upgrades (as it frequently does in the era of big data).


The advantages of cloud data processing are not exclusive to huge enterprises. In reality, small businesses may enjoy significant rewards on their own

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