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6 Important Stages of Data Processing and Why They Matter

Most of the overall data management practice of a business is the process of extracting information from raw data. But in order to accomplish this end goal, the data must be mined from its raw form. Mined data must then be processed to extract only information that a business can use.

Data processing is different for all business since they will need different types of data. However, the basic stages are the same. It follows through a specific cycle where data is fed into a system and then a system produces information in the form of graphs, infographics, and other forms that can easily be used by a company.

The 6 Stages of the Data Processing Cycle

While the exact nature of a data processing system will be different with every business, it will always follow these 6 stages.

Stage 1: Collection

This is the first stage of the cycle and it might be the most important. How a business collects data is going to have a huge impact on the results. Quality is paramount and greatly affects the output. The data collection stage must ensure that the data being collected is accurate and well-defined. That way, all of the following stages of the cycle will be more efficient. Look at it like this, if you collect inaccurate data, then the information extracted from it will also be inaccurate. Some collection methods include:-

  • Online Surveys
  • Phone Surveys
  • Operational By-Product (from daily operations of business)
  • Census Data

Stage 2: Preparation

Preparation comes after collection and is basically just the manipulation of data in its raw form to create a format that’s suitable for the next stages. Raw data can’t be processed directly and must be double-checked for accuracy. Preparation involves taking that data and constructing data sets to prepare it for further processing. Analyzation of data that has not been properly screened can create costly inaccuracies.

Stage 3: Input

Input is the stage where verified data is then converted into a useful format so that it can be further processed. In most cases, this means getting the machine-ready so that it can be processed by a computer. This stage is where data entry takes place and it’s the most time-consuming part of the data processing cycle.

Stage 4: Processing

Data is then manipulated by an automated computer program that has been created by the company. This process can contain many different threads of execution. It’s all dependent on the overall data goals of the business. There is a large range of software that can process vast amounts of data in a very short amount of time.

Stage 5: Output/Interpretation

By this stage, useful information has been extracted from the raw data so now it must be transmitted to the people who require it. This is the output stage. Here is where reports are created using the information. Audio, video and printed reports are all possible. The output must be submitted to users in a way that’s easy to interpret because it’s used to guide most future decisions.

Stage 6: Storage

Finally, useful information that has been extracted is saved for future use. This is an important step that is often overlooked by small businesses. A great storage system will allow a business to quickly access records and processed information whenever they need it. Furthermore, this system should be backed up.

The data processing cycle must be followed in order, no matter the system being used. However, the process is actually cyclic. The storage stage can actually lead to the collection of more data, resulting in another cycle.

Also, read this useful article: Know the top 6 benefits of data processing services 

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