What is meant by "data transformation" in the context of Power BI?

Data transformation in Power BI refers to the process of converting data from one format or structure to another to make it suitable for analysis. This involves various activities such as cleaning the data, aggregating it, normalizing structures, and enriching the dataset with additional information. The goal is to prepare the data in a way that it can be effectively analyzed and visualized.

In Power BI, data transformation is often done using Power Query, where users can apply numerous operations to shape their data according to their analytical needs. This aspect is crucial as the raw data collected may not be in a format that is optimal for analysis; therefore, transforming it enhances the quality and relevance of insights derived from it.

Understanding data transformation allows users to better manipulate and prepare their datasets, ultimately leading to more meaningful visualizations and reports that can foster data-driven decision-making.