Data analysts and business analysts both work with data, but the analytics part is where they differ. So how does analytics fit into each of these careers? Simply put, the difference between a data analyst vs a business analyst is that a data analyst uncovers trends in data and a business analyst makes decisions based on those trends.
When you dig deeper into the difference between data analysts and business analysts, you find more subtle distinctions in educational background, day-to-day job responsibilities, and median salary. In this article, we’ll discuss everything you need to know about the differences between data analysts and business analysts.
What Is a Data Analyst?
Data analysis is the process of investigating data sets to discover useful information. A data analyst typically mines and sifts through data to provide essential analysis and reports for a company to use. They look for patterns and trends and then draw conclusions.
Data analysts use strategies such as data mining, predictive analytics, machine learning, big data analytics, and text mining. Data analytics is closely related to data science, and data modeling uses some of the tools of data analysis. Many data analysts work with big data, which requires some knowledge of data frames, programming languages, and algorithms.
What Is a Business Analyst?
Business analysts use data to make necessary business decisions. They use the insights of data analytics to increase overall business performance. Business analytics combines skills in management, business, and computer science.
There are three different types of business analytics. Descriptive analytics evaluates the past to plan for the future. Predictive analytics uses machine learning to predict future events. Prescriptive analytics combines both descriptive and predictive analytics to make informed decisions about the best courses of action.
Business analysts may apply any combination of these techniques to every department in a company, including sales, customer service, and product development. A technical background in business administration is useful to help business analysts propose strategic business decisions.
Data Analyst vs Business Analyst: Important Differences and Similarities
You might think that there aren’t any differences between data analysts and business analysts because both roles analyze data. They even have similar names. While there are similarities in the overall goal and function of these roles, there are key differences in specific job responsibilities, skillsets, and education for business analysts vs data analysts.
A significant difference between the two roles is the day-to-day responsibilities. A data analyst extracts, cleans, and organizes data before moving on to analysis, while a business analyst often receives processed datasets to specifically look for ways to improve a company’s bottom line.
The earning potential for both jobs is very similar, but business analysts make a slightly higher salary on average than data analysts. The average salary for a business analyst is $63,886. On the other hand, a data analyst earns an average salary of $63,442 per year.
There isn’t a big difference in business analyst vs data analyst salary, and both professions are great steps toward a higher-paying career as a data scientist. Data scientists make an average annual salary of $97,680.
Data analysts and business analysts have overlapping skillsets when it comes to analyzing data and managing projects. In addition to foundational data skills, business analysts also need strong communication skills and negotiation skills, while data analysts need additional technical skills in statistical programming and data management.
Entry-level roles for both data analysts and business analysts require a bachelor’s degree. Data analysts usually have degrees in computer science, statistics, or math, while business analysts usually earn degrees in business administration or economics.
Similarity: Data Analysis
The most obvious similarity between a data analyst and a business analyst is that they both work with data. What they do with the data and the types of questions they try to answer with data are different, but both roles use statistical analysis on datasets every day.
Data analysts and business analysts both work with database tools like SQL and visualization tools like Tableau, Looker, and Google Data Studio. Business analysts might use more user-friendly software for data analysis, such as Excel, while data analysts might need to learn Python or R for data analysis.
Similarity: Data-driven Decisions
Both business analysts and data analysts work toward similar goals, using insights from data analysis to solve problems and make data-driven decisions. Business analysts work on these goals for different business organizations, while data analysts might work for businesses, government agencies, academic institutions, or non-profit organizations.
Data Analyst vs Business Analyst: Pros and Cons
Becoming a data analyst or business analyst comes with its own pros and cons. The decision to pursue one or the other depends on your personal strengths and weaknesses, so the importance of different business vs data analyst pros and cons will depend on your unique situation. Here are some general pros and cons to consider for both positions:
Data Analyst Pros
- Easy to start. Starting a career as a data analyst is easier than you might think. There are many online data analyst courses that can help you land a career in data analysis.
- Excellent job outlook. Data analysts are in high demand. In September 2022, there were over 36,000 US job postings for data analysts on Indeed.
- Opportunities across many different industries. No matter which industry you are interested in, you will most likely be able to land a job in data analytics. Healthcare, manufacturing, education, media, retail, and real estate are just a few examples of industries that hire data analysts.
Data Analyst Cons
- Must love math. This is not so much a con as a warning. If you want to pursue a career in data analytics, you have to love working with numbers. You will have to look at data like a mystery that needs to be solved.
- Mastering everything is impossible. Since data analytics involves so many different fields, including statistics, computer science, and mathematics, it is impossible to master each one. You’ll have to be comfortable researching new topics and filling in your own knowledge gaps.
- Hidden job responsibilities. There will be job requirements that might not be listed on your job offer. A common unlisted responsibility is cleaning and organizing data. Data analysts must clean the data before they can analyze it, which can be tedious and time-consuming.
Business Analyst Pros
- Great job outlook. There is an excellent job outlook for a career as a business analyst. Job openings will increase by 14 percent through 2030, compared with the average eight percent job growth through 2030 for all occupations on average.
- Big picture problem-solving. Business analysts get to see a company’s inner workings. They work on big-picture problems, and they are usually involved in every aspect of a project.
- Good variety of tasks. Business analysts juggle a number of different projects during the business day. At any given moment, a business analyst might be brainstorming, analyzing, researching, or even managing others. This keeps the job exciting.
Business Analyst Cons
- Long hours. A business analyst position can be stressful. Many different job responsibilities fall to a business analyst. You can expect to work long hours in this career.
- Lots of deadlines. Business analysts have tight deadlines because they work on projects with quick turnaround times. Deadlines can be imposed by your manager, by market compliance rules, or by the demands of a concurrent project. Managing tight deadlines and stress can be a challenge.
- High level of responsibility. A business analyst works at the core of business operations. You will have to suggest data-driven decisions for critical business issues in the company and be prepared to take responsibility for them. Additionally, you’ll have to work in collaboration with many different departments within a company.
Should You Become a Data Analyst or Business Analyst?
The job descriptions of data analysts and business analysts overlap in many ways, but they have their differences too. It’s important to understand the advantages and disadvantages before deciding on your next career move.
The answer to the question “should I become a data analyst or a business analyst?” is very personal. You should consider how your personal strengths and weaknesses apply to the pros and cons of each role, as well as your personal interests and career goals.
Things to Consider Before You Become a Data Analyst or Business Analyst
Before you decide whether you should become a data analyst or business analyst, think about your overall career path. Consider how each position fits with your background, interests, and career goals. If you are planning to go back to school to make a career change to a data or business analyst, it’s important to think about the education requirements for each role.
Background and Experience
Business analysts need some background in business, whether it’s a Bachelor’s Degree in Business Administration or work experience as a project manager. Entry-level data analysts can break into the field with coding and statistics skills alone, though more senior-level positions will likely require a graduate degree too.
Analyzing data can be boring if you aren’t interested in the subject. To make sure you can stay motivated in your job, be honest with yourself about what kinds of data interest you. If reading a business plan is your idea of fun, then you should consider becoming a business analyst. However, if the thought of profit margins puts you to sleep, a career as a data analyst is a better path.
Career Path and Goals
Data analysts have more flexibility in their future career paths than business analysts because business analytics is a specialization in the larger field of data analysis. Once you start taking business analytics roles, you’ll likely continue working as a business analyst. On the other hand, data analysts can apply their skills to a wide range of fields and have more career paths open to them.
Business Analyst vs Data Analysts FAQ
Both data analyst and business analyst are great job roles, and neither is inherently better than the other. If you prefer to focus on business processes and maximizing profits, a business analyst position is better for you. If you want the flexibility to investigate a wide range of data as part of a data science team, then a data analyst position is a better fit.
Which position earns more: data analyst or business analyst?
Business analysts earn slightly more on average than data analysts, but your salary will vary according to your specific position. The average salary of a data analyst is $63,442 and the average salary of a business analyst is $63,886, according to PayScale.
Can a data analyst become a business analyst?
A data analyst can become a business analyst pretty easily. In fact, these job titles are used interchangeably at some companies. A data analyst who has worked with business data before will have an easier time becoming a business analyst, while a data analyst who has worked in academia might need to take a business course to get hired as a business analyst.
What is data analytics in business?
Data analytics in business is the process of analyzing business data to find areas where the business could improve to make a higher profit. Business analysts might look at product sales data to increase overall sales, or they could investigate customer service initiatives for places to reduce operating costs.
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