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What Does a Business Analyst Do?

You might not immediately associate business analysis with the tech world, but Business Analysts actually play key roles in the Information Technology (IT) industry. Because they use data to help guide businesses in improving their processes, products, and services, Business Analysts can be crucial to companies and their growth.

Unlike Data Analysts, who work more closely with the data itself, Business Analysts use data to help address business needs and make strategic decisions. If you’re good at problem-solving, analytical thinking, and communication, this job might be a great fit for you.

Ahead, we’ll take a closer look at what a Business Analyst does, and how you can get started in this career path.

What is the role of a Business Analyst?

A Business Analyst helps companies define their needs and make better decisions based on past and current business data. Let’s break down what that actually means in practice.

How Business Analysts help define business needs

When we say “business needs,” we’re referring to how the company can meet its financial, strategic, and product goals, both short-term and long-term. Typically, it’s the company’s senior leadership, board of directors, investors, and shareholders who have the final say in the company’s direction and strategy. Examples might include goals such as:

  • Having a commercially viable product that does x, y, and z by a certain date
  • Achieving a certain amount of market share by a certain date
  • Improving sales volume, revenue, or profit within a certain timeframe
  • Ensuring that products and business practices stick with a certain mission or set of values such as sustainability or fair trade

Business Analysts take the company’s strategy and goals into account and use data to help the company figure out what it needs to do to meet those goals.

How Business Analysts work with business data

The term “business data” refers to data generated by the business itself (internal data), as well as relevant data from customers and competitors (external data).

Examples of internal data include:

  • Customer relationship management (CRM) records
  • Direct feedback from customer surveys
  • Point-of-sale (POS) and other transactional data
  • Internal documents
  • Device sensors

Examples of external data include:

  • Indirect feedback from people who refer to the company in blogs or on social media
  • Competitor data
  • Stock indices and other economic indicators
  • Third-party data from business intelligence companies

Companies have more access to internal and external data than ever before. But while it may seem like a good idea to work with as much data as possible, remember that it takes time to filter and prepare data before it’s usable. And a lot of external data isn’t free. It’s up to Business Analysts to consider which data sources are the most relevant and cost-effective.

How Business Analysts help make better decisions

By “better decisions,” we mean that business analysts bring value by working with complex datasets to reach conclusions that wouldn’t be obvious just by skimming through the data. At the same time, good Business Analysts know how to interpret the data into a clear action plan. Essentially, they act as a liaison between advanced tech and an organization’s stakeholders. A couple of examples of a Business Analyst’s conclusions might be:

  • By implementing the new back-end database structure, your website’s page load times will be 50% faster than your biggest competitor’s, which will help you reach website traffic goals.
  • If your next software release includes these new features and is priced 10% lower, we predict that the company will meet its market share goals while still staying above its profit goals.

Business Analysts are skilled communicators

Business Analysts, similar to Data Scientists, occupy a bit of a bridge role. On the one hand, the bulk of a Business Analyst’s role is technical — they need to understand how to process and analyze large datasets and the costs and benefits of different technologies and solutions. Business Analysts also work closely with technical and IT teams to understand the resource and technology limitations of the company.

But on the other hand, Business Analysts must also understand how their recommendations will impact the business as a whole, especially the bottom line. They need to effectively communicate with the company’s stakeholders and senior management by presenting how changes will impact the company’s goals.

In other words, Business Analysts help close the gap between business management and the company’s technical systems.

Business Analyst tools

In addition to typical data analysis tools like Microsoft Excel and Google Analytics, Business Analysts also use a variety of programming languages to make their lives easier. Here are the three most important ones:

SQL

Business Analysts work extensively with databases, which means that Structured Query Language (SQL) is a must-know programming language. While some datasets can still be stored and analyzed within spreadsheet programs, the rise of big data and data protection have made relational databases a far better solution. While most Business Analysts don’t need to be experts in SQL to design and create new database systems, it certainly helps to understand the basics of searching for and extracting data.

VBA

The most successful Business Analysts know how to program in Visual Basics for Applications (VBA). Unlike Visual Basic, which programmers use to create stand-alone applications, VBA is used exclusively within Microsoft Office applications like Excel and PowerPoint. Business Analysts use VBA to quickly generate customized summary tables, stunning graphs and visualizations, and detailed slide presentations in seconds. In other words, VBA saves Business Analysts a lot of time, so they can focus less on creating and formatting documents and more on working with the data.

Python

There’s a lot of debate on whether Business Analysts should learn Python, but it makes sense to have at least a basic understanding of Python. Why? Because business analytics involves a lot of repetitive, complex tasks with large datasets. And when datasets are too big for a spreadsheet program to handle, Python can save a lot of time and frustration. Not only can Python work with large datasets, but Business Analysts can also use Python to perform and even automate key tasks such as web scraping and data merging.

Secondly, more and more companies expect Business Analysts to cover multiple roles, including data analysis. By learning Python, you’ll open up more doors to Business Analyst job positions.

Start your career as a Business Analyst

Now that you know what a Business Analyst does, you might be wondering how to get started. We recommend beginning with an online course in programming, especially in SQL or Python, which are both skills a Business Analyst should have. Once you know the fundamentals, consider learning more advanced skills, such as analyzing business data with SQL or financial data with Python. And if you’re not sure where to go next, our developer career paths will help you decide which skills to learn as you start your next chapter.

Get more practice, more projects, and more guidance.

Michael Klein

Michael Klein is a freelancer with a love for statistics, data visualization, and his cat. When he’s not writing for Codecademy, he enjoys geostatistics with R and playing with agent-based models.

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What Does a Business Analyst Do?
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