In today’s world, data and technology increasingly pervades every industry and every aspect of how a business is run. This makes a career in data and technology a compelling prospect for many, with a variety of exciting career paths to choose from.
In this post, we’ll explore the differences between data analysts and business analysts. We’ll look at their responsibilities, how much they earn, and offer some tips for deciding which career path to take. We’ll cover:
- What are the different responsibilities for business analysts and data analysts?
- Should you become a data analyst or a business analyst?
- Key takeaways
1. Business analysts vs. data analysts: 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 value each role brings to the organization
- The stakeholders they work with
- The skills required to succeed in the role
Let’s explore further.
What do business analysts do?
Business analysts help identify problems, opportunities, and solutions for their organizations.
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!
They do this by:
- Evaluating a company’s current functions and IT structures
- Reviewing processes and interviewing team members to identify areas for improvement
- Presenting findings and recommendations to management and other key stakeholders
- Creating visuals and financial models to support business decisions
- Training and coaching staff in new systems
What do data analysts do?
Data analysts gather, clean, analyze, visualize, and present existing data to help inform business decisions. An effective data analyst uses data to answer a question and empower decision makers to plot the best course of action.
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.
Common tasks for a data analyst might include:
- Working with business leaders and stakeholders to define a problem or business need
- Identifying and sourcing data
- Cleaning and preparing data for analysis
- Analyzing data for patterns and trends
- Visualizing data to make it easier to understand
- Presenting data in such a way that it tells a compelling story
Business and data analysts can come from a wide variety of academic backgrounds, though most companies look for candidates with at least a bachelor’s degree. Generally speaking, business analysts might have a degree in a business-related field, while data analysts often have degrees in STEM fields like statistics, math, or computer science.
2. Skills: business analyst vs. data analyst
Data analysis and business analysis involve a different skillsets. While both occupations work with data, they do so in different ways and to varying degrees.
Business Analysts Skills and Work
- 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.
Data Analysts Skills and Work
- 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 like Tableau.
Both our experiential programs – Business Analyst Work Experience program and the Data Analyst Work Experience Program teach you Tableau!
- Domain expertise: Data analysts often specialize in a very specific area of business operations, such as sales or finance (as opposed to the more organizationally global 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.
Here’s a look at a common comparison of skills for each.
|Data analyst||Business analyst|
|Data analysis||Needs / requirements analysis|
|Knowledge of data structures||Knowledge of business structures|
|SQL and statistical programming||Microsoft Visio and software design tools, and at times, SQL|
The two roles share several skills as well. Whichever path you choose, you can set yourself up for success by being a good:
- Strong oral and written communication
- Problem solving
- Critical thinking
3. Who earns more, business analysts or data analysts?
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, to around $85K for senior roles.
Meanwhile, business analysts also earn a median of $61K. Salaries range from $45K to $82K, depending on skill level.
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. 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.
4. Should you become a data analyst or a business analyst?
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.
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 driving new product 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.
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.
Frequently Asked Questions about the difference between business analysts and data analysts
- Is data analyst same as business analyst? What is the difference?
Business analysts use data to help organizations achieve strategic goals with tactical outcomes. In contrast, data analysts gather and analyze data for the business to evaluate and to make better decisions.
- Which is better data analyst or business analyst?
Data analysts tend to work more closely with the data itself, while business analysts tend to be more involved in addressing business needs and recommending solutions. Both are highly sought-after roles that are typically well-compensated.
- Do business analysts use SQL?
SQL is not required for most business analyst positions. Based on Glassdoor data, only 27% of business analyst job listings have SQL as a requirement and 73% do not. However, this need for SQL is dependent on company, career experience, and a technology stack used at the company. Hence, it is a wise decision to master this skill and gain competitive advantage.
- Who can become business analyst?
Most Business Analysts possess a bachelor's degree – often in business administration, finance, accounting, statistics, or computer science or programming – and for many people, this degree may be the most logical first step in getting some exposure to business analysis theory. IT professionals working on projects regularly graduate to becoming business analysts.
- Can you become a business analyst without experience?
In short, yes. While many organizations seek candidates who have at least some experience in a business analyst role, there are ways to work around this requirement by developing and demonstrating the skills needed to do the job of BA. Explore the Business Analyst Work Experience program.
- What is the difference between business analytics and business analyst?
Business analytics refers to the field of work around driving decision making through (usually big) data analysis and visualization. Business analysts work as a function of project management, helping determine organizational requirements and chart a course towards improvement.