In today’s world, data increasingly pervades every industry and every aspect of how a business is run. This makes a career in data analytics a compelling prospect for many, with a variety of exciting career paths to choose from.
To maintain a competitive edge, organizations rely ever more on data insights. This is either to solve existing problems or to identify new ones. Two common data roles you may come across are business analysts and data analysts. However, the many similarities between these roles can cause confusion when trying to distinguish between them.
In this post, we’ll explore the differences between data analytics and business analytics. We’ll look at their responsibilities, how much they earn, and offer some tips for deciding which career path to take. We’ll cover:
- Business analytics vs. data analytics: What’s the difference?
- What are the different responsibilities for business analysts and data analysts?
- Who earns more, a business analyst or a data analyst?
- Should you become a data analyst or a business analyst?
- Key takeaways
OK, let’s dive in!
1. Business analytics vs. data analytics: What is the difference?
Before digging into the differences between business analytics and data analytics, it’s important to understand that they share many skills. For this reason, the terms are often used interchangeably and the responsibilities between them can be quite fluid. However, the core differences between data analysts and business analysts are threefold:
- What each role focuses on
- Who they work with
- The particular skills required
Let’s explore further.
What is a business analyst?
A business analyst is someone who focuses on an organization’s business operations. While they work with data, their main aim is to help find solutions to known business issues. For instance, how to improve products, services, internal processes, or financial reporting. While business analysts need to understand and apply aspects of the data analytics process, this is a means to an end, rather than an end in itself. In short: data guides them, but profit drives them.
Business analysts are practical problem-solvers. They take a high-level view of what’s needed to make a business run more effectively. They’re strategic-minded and commercially focused. Business analysts need technical expertise, but their most invaluable traits are communication and leadership skills. In many ways, business analysts are not just problem-solvers, but salespeople. They must work with executive directors, board members, and other key decision-makers to get buy-in for their ideas. Having excellent powers of persuasion is vital for a business analyst. They must frame solutions in a way that convinces senior management that their chosen path is the right one for the business.
It can help to think of a business as a cruise ship. A business analyst would be the ship’s navigator. While they don’t make the final decision about the ship’s route (that’s up to the captain and other senior staff) they do have a better understanding than most of the ship’s quirks and nearby ocean topography (or the business landscape). As the most knowledgeable person on these matters, their job is to recommend the most scenic route—preferably one that also avoids unexpected icebergs!
What is a data analyst?
Unlike a business analyst, a data analyst focuses more closely on data. While their insights are used to inform business decisions, a data analyst’s role is usually less strategic. Of course, an outstanding data analyst will exhibit great communication and persuasion skills. But this is less of a vital skill than it is for a business analyst.
Instead, a data analyst’s value lies more in their technical abilities. Excellent programming skills, math and statistics, knowledge of a wide range of analytical processes, domain expertise, and creating custom dashboards and visualizations are a data analyst’s most indispensable skills.
To follow our cruise ship analogy, a data analyst can be seen as the ship’s engineer. While the navigator (or business analyst) sits on the bridge, the engineer (or data analyst’s) work usually takes place below deck. They have a much more in-depth understanding of all the ship’s systems. From the engine room to the propellers, the generators, and electrical systems, their job is to keep tabs on every aspect of the ship’s performance. While their insights are invaluable to the captain and for keeping the ship in tip-top shape, they don’t necessarily play a direct role in directing where it goes.
You can learn more about what it’s like to work as a data analyst in this day-in-the-life account.
2. Business analyst vs data analyst: What are the different responsibilities of each?
We’ve touched on the differences between what data analysts and business analysts do. Now let’s distinguish each role further.
Key skills and responsibilities of a business analyst
Business analysts require particular abilities in the following areas:
- Business development: Identifying and creating plans for the pursuit of new business opportunities.
- Building business cases: Backing up strategy with financial analyses, and reports on risks and returns.
- Producing roadmaps: Creating actionable step-by-step plans outlining the future direction of the organization.
- Business model analysis: Using data to evaluate an organization’s policies/structure, suggesting changes or improvements.
- Process design: Producing consistent workflows that are fit-for-purpose.
- Systems analysis: Defining the goals of an IT system, and building (or commissioning) it.
- Quality control: Evaluating/improving business output, e.g. products, services, IT systems, and procedures.
- Liaison: Acting as a go-between for management and technical personnel.
- Training materials: Creating project management methodologies, diagrams, and data flowcharts that can be used to upskill members of the organization.
Naturally, all these responsibilities benefit from an in-depth knowledge of the data analytics process. But what we’ve listed above are a business analyst’s core distinguishing traits.
Key skills and responsibilities of a data analyst
Knowledge of the areas described above is also beneficial for data analysts. However, they’re not usually core skills. With a heavier focus on pure data, a data analyst’s main skills follow the data analytics process itself:
- Data collection: Scraping data from various sources, including the web, primary and third-party systems.
- Data modeling and processing: Devising new ways of collecting, storing, and manipulating data, often using tools like Python or Excel.
- Data cleaning: Tidying datasets and removing duplicate data points or inconsistencies in preparation for analysis.
- Data analysis: Knowledge of a broad range of analyses, including exploratory data analysis, descriptive, diagnostic, and predictive analytics (amongst others).
- Data visualization and reporting: Creating complex reports and eye-catching visualizations, using a variety of software and tools.
- Domain expertise: Data analysts often specialize in a very specific area of business operations, such as sales or finance (as opposed to the more holistic skills of a business analyst)
- Communication: Presenting findings in a variety of ways, e.g. multimedia reports, written reports, visualizations, or face-to-face presentations.
These are by no means exhaustive lists, but they do highlight how business analysts and data analysts tend to differ. In short, a business analyst seeks solutions to practical, known business problems. They use data as a tool to achieve this. Meanwhile, a data analyst is more focused on what the pure data is telling them. However, senior management or decision-makers usually decide how those insights are subsequently used.
3. Who earns more, a business analyst or a data analyst?
Despite different responsibilities, business analysts and data analysts earn approximately the same amount. To offer an idea of the salaries for each role, we’ve pulled data from the salary comparison site Payscale.
According to Payscale, data analysts in the United States earn a median salary of $61K. This ranges from $43K for entry-level positions, toaround $85K for senior roles.
While the difference here is minimal, data analysts often earn slightly more. This is because they usually need more technical expertise. From a practical standpoint, there are also many more graduates with business degrees than those with degrees in technical subjects such as math or statistics (more common requirements for data analysts). This reduces the pool of candidates for data analytics roles, contributing to the higher salary.
Importantly, what you’ll actually earn is more reliant on job-specific factors. For instance: the responsibilities and seniority of the role, the industry you’re working in, and an organization’s size. You can see which industries pay the highest data analyst salaries here.
However, when choosing between the two career paths, salary shouldn’t be a key deciding factor. It’s far better to follow the one that most interests you.
Which leads us to our final point…
4. How do you decide between a career in business analytics and data analytics?
How can you decide which career path to choose? Hopefully, the first three sections of this post should give you a rough of idea which role might suit you best. If you’re still unsure, though, here are a few questions to ask yourself:
Should you become a data analyst?
Do you have a technical degree in a field like data science, math, statistics, or computing? Perhaps you have a technical background, with a career in software development or information systems management? Do you have a natural flair for making sense of abstract data? Are you happier working with spreadsheets and programming languages than interacting with people in high-stakes negotiations? If the answer to all these questions is yes, then a future in data analytics might be your best bet. Alternatively…
Should you become a business analyst?
Do you have a degree in a field like business administration, finance, or accounting? Perhaps you’ve spent much of your career working in senior management roles, dealing with commercial negotiations or strategic planning? Are you a big-picture person who enjoys getting hands-on with practical business problems? Do you love the challenge of dealing with different people, figuring out how to communicate data in ways that will push an agenda forward? If the answer to all these questions is a resounding yes, then business analytics might be your preferred path. But of course…
No decision is carved in stone!
While we’ve focused on the differences between data analysts and business analysts, both are essentially data analytics roles. With this in mind, it’s very common for people to transition from one to the other. In short, there’s no single trait or characteristic to indicate if you’re better suited to one role or the other. Instead, a variety of factors will come into play: the stage you’re at in your career; where your interests lie; what your practical skills are; and how individual organizations interpret the role.
In essence, the roles are varied and usually job-specific. You can be a business-oriented data analyst or a very technical business analyst. There’s not always a clear-cut divide! Whichever role you pursue, you’ll have many opportunities to change direction. This is one of the great benefits of this new and evolving field of science.
5. Key takeaways
In this post, we’ve explored the differences between business analysts and data analysts. We’ve learned that:
- Business analysts use data to create specific business solutions, such as how to improve products, services, processes, or increase profit.
- Data analysts take a slightly less strategic role, focusing on a deeper analysis of more complex datasets, often deriving broader insights from that data.
- Business analysts usually focus on strategic activities like business development and winning stakeholder buy-in for new ideas.
- Data analysts (though requiring business know-how) tend to focus on the technical aspects of data analytics, e.g. data collection, analysis, and reporting.
- Data analysts and business analysts both earn about the same amount.
- People regularly transition between the two roles.
The demand for business analysts and data analysts is growing. As the digital economy adapts with the times, you can be certain that both roles will become even more in-demand, evolving in unexpected but fascinating directions.
This is a great time to start a career in data analytics. If you’re new to the field, explore some basic concepts with our free, five-day data analytics short course. Otherwise, read the following to learn more: