Data analysts and business analysts both work with data. The analytics part is where they differ. Considered on its own, analytics is the study of data-driven insights that allow an organization to make informed decisions.
So how does analytics fit into each of these careers? Simply put, data analysts uncover trends in data, and business analysts make decisions based on those trends. But the longer answer is a bit more complicated.
In this article, we 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 analyzing 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 then use. They look for patterns and trends, and then draw conclusions.
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Data analyst positions use strategies such as data mining, predictive analytics, machine learning, big data analytics, and text mining. Data analytics is related to data science, and data modeling uses some of the tools of data analysis.
Working with big data is more efficient in the cloud. Once a company transitions to the cloud, data analysts can access and analyze the data stored there more quickly.
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 management, business, and computer science.
There are three different types of business analytics, including descriptive, predictive analytics, and prescriptive. 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 and decides the best courses of action.
Companies can use some of these techniques, none, or all of them. The techniques apply to every department in a company, including sales, customer service, product development, and more.
Data Analyst vs Business Analyst: The Most Important Differences and Similarities
You would think that these two positions would be very similar. After all, they even have similar names. However, they actually have more differences than similarities. It’s necessary to explore both sides if you wish to make an educated decision on which one is right for you.
Difference: Responsibilities
A significant difference between the two roles is the overall responsibilities that each of them faces every day. A data analyst works with and extracts data, while a business analyst uses data to improve a company’s bottom line.
Difference: Pay
The earning potential for both jobs is similar, but there is definitely a difference, which is most apparent to industry insiders.
Business analysts make a slightly higher salary than data analysts. The average salary for a business analyst is $79,133. A data analyst, on the other hand, earns an average of $60,208 per year. Both professions can put themselves on a data scientist career path, in which case they can set themselves up for a salary of $100,560.
Difference: Skill Sets
Data analysts and business analysts can have overlapping skill sets, of course. There are, however, a few skills unique to each position. A business analyst must have excellent communication, analytical skills, negotiation skills, and project management skills, while data analyst skills consist of those plus additional technical skills.
Similarity: Working with Data
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 is different, but they both use it as part of their daily tasks.
Similarity: Tools
Data analysts and business analysts use similar tools in their work. They can both work with SQL and visualization tools like Tableau, Looker, and Google Data Studio, to name a few.
Similarity: Business Goals
Another similarity between the two is that they both work toward similar company goals, including using the insights from data to improve practices and solve problems.
Data Analyst vs Business Analyst: Pros and Cons
Of course, the decision to become a data analyst or business analyst comes with its pros and cons. Pursing one or the other can depend on what your strengths and weaknesses are. It’s important to understand both the good and the bad of each position.
Data Analyst Pros
- Easy to start. Starting a career as a data analyst is easier than you might think. There are many data analyst courses available online that can help you get certified, become more knowledgeable, and land a career in big data.
- Excellent job outlook. A data analyst is a career in high demand. If you decide to specialize in a particular type of data analysis, then there are even more opportunities available.
- 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 wish to pursue a career in data analytics, you must love working with numbers. You will have to look at data like a mystery that needs to be solved. A background in programming or algorithms is helpful, but can always learn those skills as you go. You will have to stay up-to-date on AI as well. If you don’t have a tech background, you will have to work twice as hard to break into the field.
- Mastering everything is impossible. Since data analytics involves so many different fields, including statistics, computer science, and mathematics, it may be hard to perfect each and every one.
- Some of your responsibilities won’t be in the job description. There will be job requirements that might not be on your job offer. One of those is cleaning the data. Data analysts must clean the data before they can analyze it, which can be extremely time-consuming.
Business Analyst Pros
- Great job outlook. There is an excellent job outlook for a career as a business analyst. The job is estimated to increase by fourteen percent by 2024.
- Access to the bigger picture. Business analysts have a unique view of a company’s inner workings. They can see the bigger picture more clearly than most, as they are usually involved in every aspect of a project.
- Every day is different. 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. It can be common for business analysts to have tight deadlines as they work on projects with quick turnarounds. Deadlines can be imposed by your manager, by market compliance rules, or by the demands or a concurrent project. Managing tight deadlines and stress can be challenging for some.
- Responsibility. A business analyst works at the core of business operations. You will have to make critical business decisions for the company and be prepared to take responsibility for them. Additionally, they have to work in concert 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. It would help if you also considered your personal strengths and weaknesses and how they could apply to the role.
Advantages of Choosing to Become a Data Analyst
With advances in technology, data analytics is currently one of the most in-demand and sought-after jobs globally. Due to this reality, salaries for data analytics roles are increasing as well.
Data science is essential for any business and many different industries, so you can make it your own. If you decide to pursue a career as a data analyst, you can always work your way up to becoming a data scientist. If you can think critically and analytically, then a career as a data analyst might be your next move.
Advantages of Choosing to Become a Business Analyst
Like data analytics, business analytics is having a moment as well. More businesses are going online, which means a greater need for flexible business analysts who are comfortable transitioning between remote and in-person settings.
The increased online presence has also enhanced the job outlook for business analysts. A stimulating job and a competitive salary isn’t a bad deal. If you can think analytically and strategically, then a career in business analytics might be right for you.
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