Data reconciliation is a technique that provides an optimal estimate of true process values by reconciling measured data with known constraints of the system. It accounts for inaccuracies in measurements due to factors like instrumentation errors, fouling, or process fluctuations. Using data reconciliation results in measured data that is ready for meaningful insights, agrees with all constraints, can predict unmeasured variables, and identify sources of inaccuracy. While it has advantages, setting up data reconciliation for a specific process can take time due to requirements of working with process engineers and customizing it to the unique process flow diagram and data structure.