Business Analyst vs. Data Analyst: Which One is Right for You?

Business analyst and data analyst are two very trendy data professions. They have many things in common: both appeared on the labor market quite recently, both enjoy competitive salaries, both work with large amounts of data, both search for hidden insights and patterns in the data to make data-driven decisions.

So, what's the difference between these two data science professions, and which one should you choose?

Great question!

To answer that, let's look at the similarities and differences between business analysts and data analysts to better understand the scope of each role and determine which would be the right fit for you.

What They Do

Getting right to the point: a business analyst does business analysis and a data analyst does data analysis. We know: not very helpful. Let's see what our friends at Wikipedia have to say about business analysis and data analysis:

Business analysis is a professional discipline of identifying business needs and determining solutions to business problems. Solutions often include a software-systems development component, but may also consist of process improvements, organizational change or strategic planning and policy development.

Data analysis is a process of inspecting, cleansing, transforming, and modeling data with the goal of discovering useful information, informing conclusions, and supporting decision-making. Data analysis has multiple facets and approaches, encompassing diverse techniques under a variety of names, and is used in different business, science, and social science domains.

Comparing Responsibilities and Duties

Here are the duties of a business analyst:

• Using various digital and non-digital data to identify current business problems and opportunities
• Determining crucial industry trends
• Understanding and analyzing business requirements
• Evaluating the efficiency of major business functions, IT structures, and processes
• Building financial models
• Measuring key metrics of business performance
• Making recommendations on the best course of action
• Providing strategic, data-driven solutions to support business decisions

Conversely, the role of a data analyst implies that the primary focus is on the digital data itself.

Here are the duties of a data analyst:

• Gathering data from different sources
• Data cleaning
• Data manipulation
• Data visualization
• Statistical analysis
• Making and verifying hypotheses
• Database management
• Revealing patterns and trends in the data
• Finding answers to initial business questions
• Communicating actionable insights in a compelling form to the corresponding departments, managers, or shareholders.

Who They Work with

By now, you've probably got an idea of which of these data science jobs interests you more. However, let's continue our comparison — we still have many things to discuss. For example, what teams and professionals are you supposed to work with in each of these roles?

Business analysts mostly closely interact with sales, marketing, or product teams, and customer service. Data analysts, on the other hand, collaborate with data scientists, data engineers, and data management teams.

Both business analysts and data analysts communicate with the IT service department, managers, third-party shareholders, and (of course) with each other.

Generally, data analysts work more independently, while business analysts usually have more connections with other teams.

Backgrounds

Another thing that can help you decide on the best option for you is your education (if you're a career-changer).

While both business analysts and data analysts can come from various technical or business backgrounds, business analysts tend to have a degree in business-related majors, such as business administration, business management, finance, commerce, project management, etc.

Data analysts are usually more technical specialists who graduated with degrees in STEM (Science, Technology, Engineering, and Math) disciplines, like math, programming, computer science, IT, statistics, healthcare, natural sciences, engineering, etc.

However, it's also crucial for a data analyst to have domain knowledge in their organization's industry. For example, if you have a mathematical background and want to work as a data analyst in the healthcare sector, it's not enough to be an outstanding mathematician: you also need to develop sufficient knowledge in healthcare in order to understand and analyze medical data.

Skills and Tools

Now, let's go over the skills you need to succeed in a business analyst or a data analyst role. While some technical data science skills and tools overlap between these specialists, the focus of their activity differs.

For a business analyst, the key competencies are as follows:

• Strong domain expertise
• Data analysis
• Data visualization with Excel
• Data analysis and data modeling with Power BI and Tableau
• Working with databases in SQL
• Proficiency in the tools like SAP, SAS, or Microsoft Visio
• Solid understanding of project management processes

In addition, if you're considering a business analyst role, you'll also need basic knowledge of Python and its data analysis libraries.

As for the role of a data analyst, the most essential skills are the following:

• Data cleaning
• Data wrangling
• Data visualization
• Data modeling
• Database management
• Probability and statistics
• Hypotheses testing

The data science tools that data analysts use in their everyday work include Excel, Python or R (and their data analysis libraries), SQL, Azure, the command line, and more. If you want to learn more about the necessary skills for data analysis, check out this article.

Important soft skills for both roles are similar. Here is a handy checklist:

• Analytical and mathematical mindset
• Critical thinking
• Communication skills
• Accuracy
• Problem-solving
• Proactivity
• Curiosity about data
• Time management
• Ability to work efficiently, both independently and as a part of a team

How Much They Earn

Last but not least, the burning question about the salaries of business analysts and data analysts.

In general, business analyst salaries tend to be higher than data analyst salaries. For example, according to Indeed, the current (average) base salary of a business analyst in the USA is 82,327 USD per year (as of 06/25/2022), while for a data analyst, it is 65,520 USD per year. You can read more about the latest trends for business analyst salaries in this article.

However, there are many factors that determine the real values of salaries for these two jobs: the company profile, size, and geographical location, the exact requirements for the role, your seniority level, the type of contract, etc.

Summary

In this article, we analyzed the differences between a business analyst and a data analyst to help you select which one is the best fit for you.

If you opt for a business analyst position, then the Business Analyst career path at Dataquest can be a perfect starting point. To learn data analytics and become a data analyst, you can explore our Data Analyst in Python or Data Analyst in R career paths.

Whichever of these professions you choose, I wish you happy learning and a smooth transition into the new sphere.