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Data Analyst vs. Business Analyst: What’s the Difference?

Industry Advice Analytics Business

Are you better suited to become a business analyst or a data analyst?

In smaller organizations, these job titles may be used interchangeably to describe roles that involve data or system analysis. Larger organizations, however, often employ both data analysts and business analysts, making the differences between the two careers important to understand.

While data analysts and business analysts both work with data, the main difference lies in what they do with it. Business analysts use data to help organizations make more effective business decisions, while data analysts are more interested in gathering and analyzing data for the business to evaluate and use to make decisions on their own.

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“In the simplest terms, data is a means to the end for business analysts, while data is the end for data analysts,” says Martin Schedlbauer, associate clinical professor and director of Northeastern University’s information and data sciences programs, including the Master of Science in Computer Science and Master of Science in Data Science.

How to Choose Between a Career as a Data Analyst and Business Analyst

So which career path is the right one for you: Data analyst or business analyst? To determine that, you will need to consider three factors:

  • Your educational and professional background
  • Your interests
  • Your desired career path

1. Consider Your Background

Business analysts and data analysts tend to come from different educational and professional backgrounds, says Blake Angove, director of technology services at IT recruiting firm LaSalle Network.

Business analysts (also sometimes known as systems analysts), for example, usually have earned an undergraduate degree in a business-focused major. They mostly use data to make business operations more efficient, and they have knowledge, but aren’t necessarily experts, in the various programming languages.

“Business analysts might take requirements from the business and work between the business and the technical team to develop a software package or implement a new CRM,” Angove says.

Data analysts, on the other hand, work with large data sets all day to identify trends, make charts, and create visual presentations for the business to use to make decisions. These professionals usually come from STEM majors and often have an advanced degree and a more extensive background in math, science, programming, databases, modeling, and predictive analytics.

2. Consider Your Interests

Do you obsess over numbers and statistics, or are you more of a problem-solving businessperson?

Business analysts enjoy working in the corporate world and are more interested in finding ways to solve problems, Schedlbauer says. They might be tasked with researching, organizing, and overseeing the implementation of a new workflow, for example. These people are often naturally born communicators—both written and oral skills are essential since they must explain technical messages to stakeholders in layman terms.

Data analysts are numbers-driven people who excel in subjects such as statistics and programming. As the gatekeepers for the business’s data, they’re entrenched in databases and interested in extracting data points from complex and often disparate sources. It’s also important for data analysts to have a deep interest in and extensive knowledge of the industry they work in, Schedlbauer says.

3. Consider Your Career Path

Though business analysts and data analysts share some similarities, they differ in salary and their potential career paths.

Because business analysts are not required to have as deep a background in programming as data analysts, entry-level positions pay a slightly lower salary than data analysts, Angove explains. The salary for a business analyst working in IT averages $67,194, according to PayScale.

“Business analysts, however, have a bit more of a ceiling in terms of advancement and salary,” Angove says. “Senior business analysts will eventually cap out around $100,000.”

Advanced degrees and certifications are often necessary to move from the business analyst role into a more analytics-driven career.

Data analysts, on the other hand, have a higher earning potential—well into six figures, according to Robert Half Technology—and more options for career paths, Angove says. Because these professionals work primarily in databases, there’s room for advancement with the acquisition of additional programming skills like R and Python. In addition, data analysts can easily move into developer careers and data science roles with advanced degrees.

The Bottom Line

Despite the differences between data analysts and business analysts, individuals in both careers have promising futures.

“They’re both in strong demand right now,” Angove says. “Data science is a hot-button issue for many companies, and a lot of them are hiring and building out large data teams.”

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