When talking about data, two terms are frequently mentioned – data reporting and data analytics. Even though many people use these terms as if they are interchangeable, they are actually quite different. In general, both reporting and analytics draw upon the same data. However, what makes the two distinct is their purpose, tasks, outputs, delivery, and value.
Reporting is the process of organizing data into informational summaries in order to monitor how different areas of a business are performing. On the other hand, analytics (or analysis) is the process of exploring data and reports to extract meaningful insights, which can be used to better understand and improve business performance.
Let’s explore the key differences between data reporting vs. data analytics.
Information vs. Insights
The main purpose of reporting is to translate raw data into information. Thanks to reporting, companies are able to monitor their business performance and be alerted when data falls outside of expected ranges.
Analytics, on the other hand, transforms data and information into insights. The goal of analytics is to answer questions by interpreting the data at a deeper level and providing actionable recommendations.
In other words, data reporting shows what is happening, while data analytics explains why something is happening and what can be done about it.
As mentioned in the beginning, different tasks are carried out for data reporting and data analytics. The three most common tasks for reporting are organizing, formatting, and summarizing the data. Analysts extract data from various sources, format and compare it, and make the information easy to understand by summarizing and visualizing the data in tables, charts, and dashboards.
On the other hand, the common tasks for data analytics are: questioning, interpreting, and exploring. Analytics helps businesses make decisions by questioning and interpreting the data with a distinct purpose in mind. As we said earlier, analytics goes beyond “what happened” and seek to answer “why it happened” and “what can be done about it.”
Both reporting and analytics results look very similar on the surface with the charts, graphs, tables, and stats. However, the significant difference between reporting and analytics is the overall approach.
To translate data into information, reporting utilizes the push approach. All reports are “pushed” to the users who have to extract meaningful insights and decide on the best course of action.
Data analytics offers recommendations to drive action and utilizes a pull approach. Data is “pulled” by an analyst who then carries out an assessment of the report and tries to find the suitable answer for specific business questions.
Even though both reporting and analytics leverage similar forms of data visualization, there is still a significant difference in the presented data. Analytics emphasizes data points that are significant, unique, or special – and explains why they are important to the business. Reporting may highlight key changes in the data, but it’s not going to provide an explanation of why the changes are important.
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