Business Analyst vs. Data Analyst: How Are They Different?

The volume of data the world uses is exploding—and businesses are taking advantage of that growth to drive their decisions.

Global data creation is projected to exceed 180 zettabytes by 2025, reported Statista. To illustrate how much data a zettabyte represents, the World Economic Forum uses an example involving a coin that’s a tenth of an inch thick. One zettabyte would be the equivalent of a stack of those coins that stretches over 2,500 lightyears.

By 2025, Statista predicts, the world will create, copy, download, and read 181 zettabytes of data.

Based on a 2020 survey from MicroStrategy, a provider of business intelligence services, 94% of companies reported that data and analytics were critical to their business and digital growth.

Business analysts and data analysts are professionals who perform important roles in analyzing data to drive organizational decision-making. While these careers have a shared focus on data and what it means for a company, there are differences in the roles—from their goals in analyzing data to the technical expertise they require.

If you’re considering a career helping companies make sense of data, what do you need to know about the responsibilities of each of these roles in analytics? How can a data analytics bootcamp help you prepare? And how do these two jobs, business analyst vs. data analyst, differ?

What Does a Business Analyst Do?

Business analysts examine data to help organizations’ departments operate more smoothly. Using data analysis and business expertise as a guide, they develop recommendations about actions a company should take.

They evaluate data related to performance metrics, such as costs and efficiency, to uncover trends and provide insight about how a company should grow and change. Business analysts’ work helps organizations take a disciplined, data-driven approach to improving performance.

Business analysts working to guide IT efforts, for example, coordinate the work of IT staff and other business areas to ensure their processes are as efficient and effective as possible. They help a company’s leaders understand how data can inform their technology initiatives, balancing desired outcomes with the feasibility of incorporating processes and tools. Their responsibilities can include:

• Budgeting and forecasting

• Comparing business plans with outcomes

• Reporting to business and project leaders about problems, opportunities, and solutions

• Defining project goals and standards for success

By evaluating user data, business analysts who assist with software development can help pinpoint trends in the use of products, the success of functions, and the potential for issues with applications. The recommendations they offer based on this analysis help to shape a project’s scope and specifications.

Business analysts often rely on the use of Structured Query Language (SQL), a programming language that helps in accessing and manipulating data.

What Does a Data Analyst Do?

Another step in exploring the roles of business analysts and data analysts is to learn about what data analysts do. Like business analysts, data analysts inform corporate decision-making.

With the help of business intelligence (BI) and analytics tools, data analysts review data to uncover patterns, developing reports about those findings to share with corporate leaders. Their work helps businesses make predictions that allow them to optimize their performance, profits, and decision-making. Data analysts assist organizations with:

• Determining how to measure product and project outcomes

• Establishing the questions to ask about products and services

• Scaling analytics methods to support the company’s teams

Sometimes confused with data scientists, who focus on collecting data and preparing it for others to use, data analysts provide visualization and statistical analysis to help others understand the information and identify trends. Data scientists and data analysts often work together, alongside IT staff and business management, transforming information into easy-to-understand materials for the organization's stakeholders.

Using software and programming languages like Microsoft Excel, SQL, Python, and R, data analysts perform tasks including:

• Developing and using databases and data collection systems

• Structuring large datasets to uncover relevant information

• Gathering and reviewing data

• Reporting on data by using dashboards, graphs, and other visualization tools

Data Analysis Process

Data analysts typically follow a four-step process to ensure proper review and interpretation. The data analysis process includes:

1. Determining data requirements or how to group data, such as by age, gender, or income

2. Collecting data online or through sources like computers, employees, or cameras

3. Organizing data for analysis, using a spreadsheet or software for statistical data

4. Reviewing data to ensure that it has no duplications or errors before analysis

Then data analysts review the data to uncover trends and make predictions. They might use data mining, for example, sorting through large datasets to uncover patterns, or machine learning, relying on statistical probabilities to teach computers how to quickly process data. They might evaluate how a change in one area could affect another or examine a smaller dataset to uncover a hidden trend.

Data Analysis Approaches

Depending on the questions data analysts want to answer as they review information, they can use one of four different approaches:

• Descriptive analysis describes what has happened over a specific period of time, such as examining how sales have changed.

• Diagnostic analysis explains why something happened, like reviewing a variety of data to measure the impact of an advertising campaign on product sales.

• Predictive analysis anticipates what will happen in the near future, predicting outcomes based on circumstances and resulting behaviors from the past.

• Prescriptive analysis suggests an action to accommodate a predicted outcome, such as stocking additional inventory to accommodate the demand that data models predict.

Business Analyst vs. Data Analyst: Key Differences

Despite their shared focus on working with data to maximize business performance, the roles of business analyst and data analyst do have some key differences. From their approach to data analysis, to their required education and skills, to their median salaries, following is a closer look at those differences.

Business Purpose

For business analysts, the focus is on broad implications for an organization, such as what data suggests a company should include in a new product or which project should be the top priority. These professionals typically take a more retrospective look at data. Then they combine business expertise with data analysis to form opinions about how to ensure efficient processes and effective products.

Data analysts, on the other hand, focus more closely on the data that supports business decisions, using a variety of approaches to examine data and uncover patterns and trends. In fact, business analysts may turn to data analysts to share the data that informs business insights.

The trends that data analysts reveal can help predict future outcomes. Data analysis helps businesses answer questions about why something has occurred and how to best prepare for likely outcomes.

Required Skills

Business analysts typically are familiar with business processes and data analysis. While they may use programming languages to interpret data, the emphasis of their work is on drawing conclusions and making recommendations. They often hold a college degree in business administration, accounting, or finance.

For data analysts, there is a heavier focus on the technical functions of analysis. Their role’s main purpose is to gather and interpret data, so they are more likely than business analysts to rely on the tools and programming languages that aid in data analysis.

Data analysts’ combination of education and training is likely rooted in computer science or math. A data analytics bootcamp, for example, can teach skills that data analysts use, with some offering certifications in those areas.

Median Salary

Comparing salaries for business analysts vs. data analysts also reflects slight differences.

Business analysts with less than a year of experience had a median annual salary of about $61,300 in October 2022, according to compensation data provider Payscale. Professionals in this role with between one and four years of experience had an annual salary of about $67,200.

For data analysts with two years of experience or less in September 2022, labor market data firm Lightcast™ reports the median annual salary was $61,100. For data analysts with three to five years of experience, the median annual salary was $78,200.

Pursue a Career in Analytics

The growing use of data—and companies’ reliance on it—has led to career opportunities for those interested in helping organizations with data-driven decision-making. If a career that allows you to delve into data to uncover patterns and make business predictions seems like a good fit, explore Fullstack Academy’s online Data Analytics Bootcamp.

The bootcamp offers full-time and part-time options you can complete in months, learning about the tools, formulas, and programming languages that can get you started in a data analyst career. Discover how the Fullstack Academy online Data Analytics Bootcamp can help you chart your professional course.

Recommended Readings

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Sources:

Business News Daily, “What Is SQL?”

CIO, “What Is a Business Analyst? A Key Role for Business-IT Efficiency”

Indeed Career Guide, “Business Analyst vs. Data Analyst Differences (With FAQs)”

Indeed, Data Analyst Job Description: Top Duties and Qualifications

Investopedia, “Data Analytics: What It Is, How It’s Used, and 4 Basic Techniques”

MicroStrategy, “2020 Global State of Enterprise Analytics”

Payscale, Average Business Analyst, IT Salary

Payscale, Average Business Analyst (Unspecified Type) Salary

Statista, Volume of Data/Information Created, Captured, Copied, and Consumed Worldwide From 2010 to 2020, With Forecasts From 2021 to 2025

Talend, “Business Analytics vs. Data Analytics: Which Is Better for Your Business?”

Upwork, “Data Analyst vs. Data Scientist: Key Differences Explained”

World Economic Forum, “The World’s Data Explained: How Much We’re Producing and Where It’s All Stored”