Analytics is big business these days. Data comes flooding in from endless sources: clients and customers, transactions, surveys, vendor documents, official reports, financial statements, shareholder meetings, employee statistics and records, product and service production, operations and management, marketing and social media, and so much more. It’s enough to make anyone’s head spin.
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More to the point, it’s enough to make the application of data toward useful decision-making all but impossible. Until the analysts arrive, that is. By carefully sorting through data, pulling out the relevant information, and assessing it from a detached and critical standpoint, analysts can help businesses make much better decisions and remain competitive in an increasingly crowded market.
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In this video Jenn looks at how business analysts and data analysts compare in terms of their focus, who they interact with, and the main skills needed. This video covers a variety of topics listen now.
It is easy to assume, therefore, that the correct role for the job is that of “business analyst,” but in fact, that’s not necessarily true. There is a significant difference between business analytics and data analytics, which you should understand before applying to a degree program or a job.
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Let’s take a look at some of the main similarities and differences today.
Similarity: Both Help Companies Make Decisions
As the word “analytics” indicates, the roles of both data analyst and business analyst are deeply concerned with assessing situations, drawing meaning from what they see, and making the best recommendations based on the knowledge they have.
Both focus heavily on increasing the efficiency of the companies they help. That might mean increasing profits or improving operational processes to cut waste. It might mean streamlining the hiring and firing process or providing insight about product manufacturing. Or it could mean identifying unnecessary positions, products, marketing campaigns – or pretty much anything else.
Bottom line: Analysts are there to make a company run better, and to do so, they need data.
Similarity: Both Use Data in Their Pursuit of Knowledge
Long gone are the days of basing big business decisions on hunches and intuition. This is almost never as viable a strategy as using cold, hard facts to inform next steps, from the biggest merger to the smallest marketing pivot. Without data, a company is much likelier to make a mistake, put themselves in a vulnerable position or see a dramatic decrease in profit.
Business analysts are there to help ensure that doesn’t happen. They collate the available data and present it, so that businesses can make better decisions based on real and actionable information. They do this in different ways, however, which we will discuss below.
Similarity: Both Can Work for Companies, Consulting Firms or Themselves
Both data analysts and business analysts are in a unique role, in that their knowledge is widely transferrable across a range of industries and fields. They therefore have a number of options when it comes to how to work and whom to work for. The three basic options include:
- Working for a company: Analysts who enjoy the thought of helping a specific company succeed over time can seek a job at a specific business organization. If they prefer to help an educational institution, nonprofit or government agency, they can use their skills there as well.
- Working for a consulting firm: Sometimes businesses don’t need full-time analysis, but rather want to bring on analysts when they’re making a big move. Because of this need, both business and data analysts will find opportunity working for consulting firms that specialize in this. If you want to work for a firm, it’s smart to specialize in a specific type of analysis, so that you can help your firm serve those types of clients.
- Starting your own business: If you’re a lone wolf type, you might enjoy using an analytics degree to start your own business. Some people do this right out of school, while others work for employers while they learn the ropes, then go out on their own.
Whatever approach you choose, though, you first have to decide whether you will get your degree in business or data analytics. And there are some major differences between the two.
EXPERT VOICE: Is getting a master’s in Data Analytics worth it, or can you learn the same things on the job? Absolutely worth! Experts are saying that Data is now the world’s most valuable commodity. Most of the businesses believe that data is a golden bullet for decision making. There is no doubt that data, collected and used in a strategic way, can aid decision making and automate processes. –David Mike, Research & Analysis Specialist in Education2010–present
Difference: Data Analytics Focuses on the Data, Business Analytics Focuses on USING the Data
The primary difference between a data analyst and a business analyst is what stage in the process they use data.
Data analysts are there to put raw data into a usable format. They extract it from all the data sources listed above and turn it into digestible insight. That means cleaning the data to remove background noise and interfering factors that might skew the numbers. It also means transforming all data into standardized metrics (such as putting all sales figures into a single currency), and identifying only the most useful information to pass on to the decision-makers.
Business analysts, on the other hand, are more concerned with how that data impacts business decisions. They examine overall operational procedures to identify where and how they can make them more efficient. Often this has the outcome that business analysts pick up where data analysts leave off, using the information that the data types prepare.
Difference: Business Analytics Requires a Stronger Business Sense, While Data Analytics Requires a Deeper Knowledge of Data Science and Machine Learning
Because of the difference in their specialty, business and data analysts need different educational backgrounds.
Business analytics requires a strong business sense, including global markets, operations and management. They often have IT or computer science backgrounds as well, to enable them to use the information that data analysts provide well. Without such a background, they might not know what they were looking at, so both are important.
Data analysts, on the other hand, tend to stick close to subjects like computer science, programming, mathematics, statistics and software engineering. These subjects help them create and nurture algorithms and programs that help them extract meaningful insight from the cacophony of raw data.
Difference: Data Analytics Roles Are More Likely to Require a Master’s Degree
While it’s not necessarily true that a business analytics role requires only a bachelor’s and a data analytics role demands a master’s, this is often the case. Data analytics is a deeper field of expertise, making it important that applicants have very strong backgrounds in the manipulation of data, machine learning and computer science. Before deciding which degree to get, it can be helpful to speak to department chairs at universities whose programs you’re considering, or do informational interviews with the types of companies with whom you’d like to work.
Now that you understand the main differences between the two fields, hopefully you feel prepared to make a better decision about which role works best for you. If you still have questions, we invite you to get in touch today. We’re happy to answer questions and offer guidance about the right path forward in your academic and work career, so don’t wait!