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How are data analytics and business analytics different? The terms are often used interchangeably, but there are important distinctions that can help you decide which field would fit your career goals.
Both business analytics and data analytics involve the collection and analysis of data, and both use their analysis to help improve an organization’s effectiveness and decision-making.
Data analytics uses outside information and environmental comparisons to drive an organization’s next move. On the other side of the spectrum, business analytics uses internal information to improve performance and support the health of the company.
Data analysts collect and process large sets of data that can then provide a company with valuable insights.
The first task of a data analyst is to build up their data set. They define the kinds of data to be collected, then discover the best methods to obtain that data. After this, they break down the data that’s been collected and convert the raw, sometimes messy information into clean and usable knowledge.
After the data set has been cleaned and made ready for use, the data analyst will identify patterns that illustrate meaningful information for the company.
The analyst then gives a report, possibly also presentation, of the results so that company leaders can make informed decisions about how to improve their enterprise.
Essentially, a data analyst’s role is to take the messy facts available in the real world and sift them for actionable information that company leaders can use to decide on the best next moves for their business.
What kinds of skills do data analysts use?
Data analysts need to have a mastery of a wide range of skills, tools and methods for collecting, interpreting and presenting data.
Some of these include:
In addition, having a strategic vision – such as recognizing how the data illustrate new ideas or directions for the company – can be a great asset for someone who wants to pursue a career in data analysis.
Typical work for a data analyst will include working closely with management, translating data, interpreting results and testing hypotheses.
Where a data analyst focuses primarily on external data to find a way forward for a company, a business analyst spends their time analyzing from within. They look at the functions, processes, operations and overall architecture of their own business enterprise: the business itself is the subject of their evaluation and analysis.
Business analysts work across all levels of their organization, exploring how the business runs, what processes are involved in daily operations and planning long-term strategy, and what challenges and pain points the employees and management report in their day-to-day work.
A business analyst will focus on strategic planning, translating project requirements and developing policy – all with the goal of supporting an organization’s current and future processes and technological infrastructure.
What kinds of skills do business analysts use?
In many ways a business analyst will share similar skills and background with a data analyst: a fundamental knowledge of technology, programming and statistics, along with special attention to evaluating and communicating data in a way that non-experts can understand.
Additionally, a business analyst should have a strong sense of how business, and particularly how their clients define their business philosophy and outlook.
Comparing the two roles
A data analyst compares an organization with its competitors, identifying trends and patterns that could impede or encourage success, while a business analyst might attempt to predict future business performance using past business performance.
Have an idea about which path might be right for you? Learn more about Capella University’s programs in data analytics and business analytics.