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Data analyst vs. business analyst: Key differences

At a glance

  • A data analyst uses key pieces of information to help a business make better decisions.
  • A business analyst helps determine how to make a company’s processes more efficient, effective and profitable.
  • Both data and business analysts play important roles in organizations by deriving conclusions from data and using them to drive decision-making.
  • Explore online business and technology degree programs at University of Phoenix.

Data and business analysts have plenty of similarities, and many organizations benefit from both. The two roles are part of a data team where they deliver analytics reports to stakeholders within an organization and, most importantly, provide insights that help guide business decisions.

Although data analysts and business analysts are both critical to businesses, the two roles are also distinct. One key difference is the level of experience each role requires, which affects the types of tasks and deliverables each is responsible for. Let’s explore these roles and their differences and similarities in depth.

What is a data analyst?

A data analyst is a data scientist who uses select information to help an organization make better decisions. Data analysts gather information to answer questions, solve problems and provide insight into how a company can improve its operations.

As data scientists, data analysts have varied educational backgrounds. Often, however, they have a bachelor’s degree in mathematics, computer science statistics or a related field. It can also be helpful to have certifications in relevant data-oriented software programs.

Data analysts must also be able to share their findings with team members who may have different backgrounds, so communication skills are also important. 

How do you become a data analyst?

To become a data analyst, you should be able to:

  • Use software such as Microsoft Excel and Access to collect data from various sources (including webpages)
  • Use spreadsheets to perform calculations
  • Write queries that pull information from databases
  • Create charts and graphs
  • Analyze charts and graphs with statistical methods like linear regression
  • Present findings in written reports or presentations
  • Work well with others by being receptive to feedback and communicating confidently

You can learn data analytics skills through a Bachelor of Science in Business with a Business Analytics Certificate program. Depending on the company or job you want, the experience and education required for a data analytics role may vary.

What is a business analyst?

A business analyst works with business intelligence to help determine how to make an organization’s processes more efficient, effective and profitable. Business analysts are often responsible for helping create new business models or improving existing ones.

Business analytics and intelligence: What’s the difference?

Business analysts also identify gaps in a company’s processes or product offerings. For example, a business analyst working for an insurance company may notice that their competitors excel by selling a unique type of insurance policy. By showing the profit differences, the business analyst can then recommend new tactics or offerings to remain competitive.

Business analysts must also understand the needs of customers who might use the products or services offered by their employers and then create solutions based on those needs. Business analysts typically work closely with other team members — like project managers, designers and developers — to ensure that all aspects of a project are managed correctly.

How do you become a business analyst?

Those interested in becoming a business analyst typically need a bachelor’s degree in business or social science. Depending on the company and role, some positions may require an MBA or further certification.

Data analyst vs. business analyst: Key differences

Despite their similar titles, the roles of data analyst and business analyst have several important differences.

First, data analysts generally need more technical skills than business analysts. In addition, data analysts tend to focus on more specific, data-oriented analytical tasks than business analysts (think analyzing a database or creating statistical reports).

Here are some other key differences:

Data analysts

Data analysts are responsible for collecting, organizing and analyzing data to recommend what action should be taken next. They may also employ statistical and mathematical techniques to extract data and interpret useful information.

Data analysts often have an undergraduate degree in data science or a business-related field. They may also have an MBA or other business administration degree. They need strong analytical skills and an understanding of how businesses work.

Data analysts typically work closely with other team members — including IT professionals who help them with technical issues — to ensure that reports are accurate, consistent and easy to understand by all parties. They also frequently provide internal and client-facing reports to help management keep track of progress and spot potential problems early on.

Business analysts

Business analysts are responsible for taking care of the business intelligence side of things by providing insight into where a company is currently and how it can improve its performance. They identify potential opportunities and risks as well as plan strategies for growth.

They help make organizations more efficient and profitable by improving business intelligence processes, validating solutions and, in some companies and roles, making informed decisions for stakeholders.

Although business analysts are often required to have a degree in business or an MBA, gaining additional certifications or experiences can help build valuable skills. Business analysts are skilled at identifying problems and proposing solutions by gathering information from various sources. Solutions can tackle everything from changing an organization’s workflow to altering its entire operations system. Data analysts, on the other hand, may be more focused on technical, data-oriented problems.

Data analyst vs. business analyst: Similarities

Both data analytics and business analysis require you to think critically about your work and use quantifiable proof to make decisions. In addition, they require you to communicate with other people in the company, including upper management, other departments and clients.

Here are some other similarities:

  • They collect and analyze data: Data analysts take raw data and turn it into something that can be used to make decisions or support a business case through data visualization. Business analysts are responsible for defining what needs to be collected, how it should be collected, who will analyze it and how they will use it.
  • They use their findings to help businesses make better decisions: They work with data to find trends and make recommendations for improving the business. Data analysts focus on collecting and analyzing data, while business analysts focus on using that information to create new products or services that will be profitable for their company.
  • They need solid analytical skills: Both are responsible for analyzing data, which means they need to be able to look at a problem from all angles, identify its root causes and possible solutions and then propose those solutions to their supervisors. They must also be able to communicate effectively with their colleagues and supervisors.
  • They generally require a certain type of education: Data analysts and business analysts both generally require a bachelor’s degree or MBA. This is one of the most common similarities between the two positions.

Data analyst vs. business analyst: The salary and employment facts

The U.S. Bureau of Labor Statistics (BLS) offers valuable information on job outlook and average salary. While BLS does not provide information specifically on data analysts, it does have data on operations research analysts, which is a similar role.

Employment for operations research analysts is projected to grow 23% from 2021 to 2031, according to BLS. The annual wage across industries for an operations research analyst ranges between $48,690 and $160,850, according to May 2021 data.

Salary ranges are not specific to students or graduates of University of Phoenix. Actual outcomes vary based on multiple factors, including prior work experience, geographic location and other factors specific to the individual. University of Phoenix does not guarantee employment, salary level or career advancement. BLS data is geographically based. Information for a specific state/city can be researched on the BLS website.

Likewise, BLS does not include data specifically for business analysts but does provide information about the similar role of management analyst.

Employment of management analysts is projected to grow 11% from 2021 to 2031, according to BLS. The annual salary for management analysts was between $50,190 and $163,760, according to May 2021 data. 

Which is right for you?

Aside from degree requirements and industry research, there are a few questions you can ask yourself to help determine whether data or business analytics is the right fit for you:

  • Do you like working with numbers and data?
  •  Are you interested in finding trends and patterns?
  • Do you have strong analytical skills?
  • Are you good at problem-solving?
  • Do you like working with people and teams?
  • Do you want to help businesses improve their efficiency and bottom line?
  • What type of work environment would make you happiest?
  • Do you enjoy crunching numbers and analyzing data?
  • Do you prefer working with people and understanding business problems?
  • Is there an opportunity for advancement in either field?

With these questions and your answers in mind, you can create a list of pros and cons to decide which career path is right for you.

Pursue a business or technology degree at University of Phoenix

University of Phoenix offers several online business and technology degree programs aligned to many rewarding and in-demand occupational outcomes.

Bachelor of Science in Business with a Business Analytics Certificate — Develop skills you need to leverage data for making important business decisions.

Bachelor of Science in Data Science — Learn important analytical skills that are critical to modern business processes, including data programming languages, statistical analysis, machine learning, data visualization and more.