Read the blurb from any business or consultant promising to make sense of raw data and you’ll be sure to see the words “insight” and “analysis”. Though often used interchangeably, the two terms have distinct meanings, with the distinction even stronger when it comes to making use of data.
Analysis is a process. The Greek word from which it is derived is translated as ‘to loosen up’, though the meaning is closer to breaking up into parts. It refers to the process of looking at something in close detail and in terms of its individual components as a way of learning something new about the whole.
Insight is simply derived from inner sight. In literal terms, it means a mental vision or understanding. In more practical terms, it’s about discovering something that isn’t immediately clear at first glance.
The two terms are closely linked because in many contexts, analysis is what you conduct to gain insight. For example, a simple glance at Willy Wonka’s chocolate factory shows that it makes successful chocolate. Analysis would show that nobody ever goes in or comes out (which is at odds with the usual operation of a labour force) and that the production is in fact carried out by Oompah Loompahs. That analysis could give the insight that Oompah Loompahs are highly productive workers and willing to work long shifts.
There’s a significant difference between the two terms, however, particularly when dealing with data. Analysis is something you control, while insight is the unknown that you seek. Because insight is unknown, you need a stage in between that’s controllable and determines your analysis: namely an objective. For example, we might use the objective of wanting to learn how Willy Wonka makes so much chocolate to determine that we should analyse the movements of his labour force. That in turn could give insight into the Oompah Loompahs – something we didn’t have before carrying out the analysis.
There’s also a stricter definition of insight: not only is it a previously unknown fact, cause or relationship that we only learn through analysis but also a discovery that we can use to boost business or increase profits.