“Business analysis” and “business analytics” sound almost identical. No wonder these terms get confused. Let’s do some analysis on both terms to make the distinction clear. Read on or check out my video on the same topic.
Definitions
Business analysis is a practice of analyzing business problems and opportunities and enabling enterprise change.
Business analytics enables generation of analytical insights from data to help business stakeholders make better decisions.
There is an overlap — both of these disciplines enable solving business problems and rely on data & technology. However, their scope, methods, and outcomes have several key distinctions.
Outcomes
The main outcomes of business analysis are captured business requirements and a shared understanding of requirements by all stakeholders.
Business analysis tackles a wide variety of business problems. Solutions to these problems may include:
- A new computer application.
- Changes to existing systems.
- Changes to business process.
- Changes to roles and organizational structure.
- Design of new products.
- A decision to stop a certain business practice no longer providing a return on investment.
Most of the time, solutions to business problems that business analysis deals with will be a combination of changes to multiple components of the enterprise: changes to software, organization, business processes and even the physical environment.
Business analytics focuses on finding solutions to business problems through using data: discovering important data insights that can help choose a better course of action and therefore, make better business decisions.
Overlaps in purpose and outcomes
Are the overlaps between business analysis and business analytics? Of course.
Business analytics methods can be used during business analysis to:
- Better understand the business problem.
- Identify the root cause of the problem.
- Analyze business scenarios.
- Measure the impacts of the problems and gaps.
For example, a business analyst may use data analysis to determine:
- Process bottlenecks: where does the process slow down or require frequent manual intervention?
- Customer needs: what customer groups experience the issue, what they like and don’t like.
- Frequency of business scenarios: what changes will have a higher impact?
In summary, a business analyst may use analytics, especially descriptive and diagnostic analytics, to help diagnose and better understand business problems. This is the foundation of discovery and current state analysis.
If we now consider the next stage of the business analysis process — synthesis of solution requirements, business analytics may be part of the solution. For example, a new predictive model, a modified report or a new performance dashboard may be part of stakeholder requirements along with other changes.
On the other hand, we use business analysis to define business analytics requirements. Analytic solutions will only be successful if the business need is well understood, and the requirements are clear. Business requirements come from business analysis.
Activities
Business analysis activities include (and are not limited to):
To better understand the overlaps and differences, let’s consider business analysis activities and types of analytics next.
- Process analysis, such as putting together a process inventory, capturing business process flows, and identifying gaps.
- Research and artifact analysis, performed for a better understanding of the enterprise business model, organizational structure, governance and business rules.
- Scenario analysis, to list and track different business scenarios that must be supported by the future solution.
- Root cause analysis, including discovering causes routed in process, product, data, technology, or people issues.
- Business modelling to capture both current and future state through context models, use case and state transition diagrams, feature trees and user journey maps.
To empower decision-makers with insights, we use the following types of business analytics:
- Descriptive analytics to summarize and visualize data from various sources to observe and summarize what is happening.
- Diagnostic analytics, delving into factors and causes of the trends observed.
- Predictive analytics, to extrapolate observed trends and utilize the discovered significant factors to make predictions.
- Prescriptive analytics, to recommend the best course of action based on the ability to predict future outcomes.
People and roles
Professionals in a variety of roles may perform business analysis in organizations, from BA job family that includes business, systems, and process analysts, to leaders, managers, and functional experts. You will find employees with business analysis responsibilities in a Project Management Office (PMO), business groups, a Business Analysis Centre of Excellence, IT departments, and agile cross-functional teams.
To become a business analyst, one will typically study general business disciplines complemented by BA training. This training will include business analysis competencies, tools and techniques, project management methodologies, and sometimes even software development, data management and quality assurance concepts.
On another hand, you will find business analytics professionals in analytics, business intelligence or reporting groups. Their titles will range from data analyst to BI or dashboard developer, analytics designer, or data scientist.
They may come from business, math, statistics, or computer science backgrounds. They will study data analysis, math, statistics, SQL query language, programming languages, scripting, database management, data warehousing, and analytics tools.
Tools
Tools that are typically used to create business analysis deliverables are:
- Diagramming software to create visuals and models.
- Office productivity and document management tools.
- Spreadsheets.
- Specialized requirements management software.
- Collaboration and web conferencing tools.
The tools for generating business analytics require more specialized technical skills:
- Database access, management and querying tools.
- BI and analytics platforms that support scripting and design of reports, dashboards and visualizations.
- Advanced spreadsheet features including the integration of spreadsheets with data marts and OLAP.
- Data profiling and exploration tools.
- Tools for processing unstructured data and data mining.
Outputs
Finally, let’s consider the outputs of business analysis and business analytics.
Business analysis deliverables are:
- Documented business requirements in the form of a Business Requirements Document (BRD), a backlog, or entries in a requirements management tool.
- Artifacts that support requirements, including user story maps, models, matrices, mock-ups and wireframes.
- An intangible but critical deliverable — a shared understanding or requirements by all stakeholders.
Business analysts support the full solution development lifecycle from analysis through design, development, testing, implementation and rollout.
The deliverables of business analytics are:
- Designed and deployed reports, dashboards and scorecards.
- Machine learning and predictive models.
- Analytics embedded in the business process.
- Ad-hoc data analysis, results of data profiling and exploration.
Business analytics specialists may also analyze requirements (or delegate this task to a business analyst). They are fully engaged in data preparation, design and development of analytics solutions and may get support from other team members for testing, implementation, and rollout.
If you would like to learn more about each area, explore these courses from Why Change Academy:
If you prefer to learn from videos, here is my video on the same topic:
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