What's the Difference Between Reporting and Analytics?
In order to successfully operate a business, owners and managers need to stay on top of their company's business reporting and data analysis, such as- where the company's money is going, how much employees are currently producing, how much profit is being earned, what monthly expenses are being made, etc.
And in order to stay on top of all this, businesses need to understand the business reporting and analysis reporting differences, as well as how to properly report and analyze their raw data in real-time.
In today's business environment, information insight and data are more important than ever. And this isn't only because businesses are now data driven, but because they need to stay on top of their finances, but it's also because, by using information and raw data, companies are now able to provide consumers with better products, better advertising and marketing, and overall better customer success than ever before.
But, when it comes to reporting and analyzing raw data, business owners and managers aren't often aware that there are a few key differences between the two. And although both reporting and analytics go hand-in-hand, it's important to understand that the two terms shouldn't be used interchangeably.
Reporting Vs. Analytics - Definitions
Without reporting, a business owner simply wouldn't be able to analyze their data. And without analytics, reporting simply wouldn't provide any real insight to the business owner.
However, both reporting and analytics are two very different steps of the same much larger process of properly managing a business.
To begin with, reporting refers to creating information based on raw data pulled from a data source. So, for example, a report can be pulled from a company's operational database, their website's MySQL, or even Google Analytics.
In other words, reporting simply provides business owners and managers with a summarized version of a databank's raw information. Reporting basically provides the numbers that can be analyzed later on.
So, for example, let's say a company wanted to know how many new website visitors they've had in the previous month, they could pull up a report from Google Analytics.
However, if they, in turn, wanted to know more about their website visitors, such as location demographics or average age range, they would need to dig deeper using analytics.
On the other hand, the term analytics is used to refer to the act of analyzing a report to obtain valuable insight from the information. In other words, the process of analytics is used to answer deeper questions about the initial report.
To summarize the difference; reporting is used to translate raw data into information, while analytics is used to draw insight from that information, helping business owners and managers truly understand their customer relationships, as well as how they can provide better products and services in the future.
5 Key Differences Between Reporting and Analytics
Technically, both reporting and analytics are part of performing a larger analysis of raw data. However, analytics cannot be performed without a report, and a report will not provide any valuable insight if it is not analyzed.
So, to avoid any confusion, make sure to understand the following 5 differences between reporting and analytics.
1. Tasks Involved
Reporting involves tasks such as sifting, organizing, and formatting raw data into easy to understand information. So, for example, this might include creating graphs, charts, or informational tables.
On the other hand, analytics involves going one step further and questioning the information found in the initial report. Therefore, a few common analytics tasks might be comparing, interpreting, and understanding trends or forecasts pulled from the report.
2. Reason for Each
Essentially, reporting helps business owners and managers monitor their companies' data.
Therefore, reports are mostly used to get a thorough understanding of a company's current operational processes, which might include learning how much money is coming in versus total expenditures or how many people are visiting a web page.
However, the reason for using analytics is to interpret data at a significantly deeper level, which, in turn, provides invaluable insights and recommendations on what actions a business should make in the future.
Simply put, reporting is used to pull information from raw data, often in the form of easy-to-read dashboards or graphs. Reports are used to gain a basic understanding of a given dataset.
Whereas, analytics are used to understand this information in order to understand trends and make better, well-educated business decisions in the future. In other words, analytics are used to gain a deeper understanding of a given dataset.
Although both reporting and analytics are completely different from each other, they are both indispensable processes, which absolutely must be used appropriately in order to succeed in today's business world.
However, in the end, reporting simply provides business owners with the value of being able to understand their data, whereas, analytics provides them with the value of knowing what they can do in the future.
Although both humans and computers can perform reporting and analytics duties, humans are much better at analyzing, while computers are much better at reporting.
This is because computers or software programs can easily sift through tons of data with much greater accuracy and efficiency than any human. And then, it can easily aggregate this information into charts and graphs.
But when it comes to analyzing this information, humans are much more adept at the job.
That's because analyzing information requires logical reasoning and superior intellect to be able to draw insights from a report, allowing the analyst to better understand business trends and forecasts.
Basically, computers can process and report information. But it takes a human mind to truly analyze and understand what that information is trying to say.
Reporting and Analytics in Action - Example
When it comes to reporting and analytics, both are crucial steps in understanding data and learning how to better operate a business.
So, to help highlight how each step might look in the real world, imagine owning an eCommerce website that sells all types of gold and silver engagement rings.
As the owner of the business, it would be wise to understand how many unique users have visited your webpage in the past financial quarter versus the previous quarter. So, in this case, a simple report pulled from Google Analytics would be enough to answer the question.
However, to answer deeper questions, such as How many of those website visitors made a purchase? or How man men versus women visit my website? an analysis of the information would need to be done using some form of data exploration tool.
Then, by using the insights obtained through this analysis, the business owner would be able to answer these questions, gaining a better understanding of how to serve their website visitors. In turn, the owner would then be able to make better, more informed decisions in the future, potentially increasing his or her long-term ROI.
Getting the Most from Your Reporting Solutions
Both reporting and analytics are quintessential tools for surviving in today's modern business environment. However, because businesses are now able to gather more data and information than ever before, making sense of the numbers can sometimes be confusing.
Fortunately, there are plenty of software applications and online platforms that can help business owners, owner-operators, managers, and CEOs easily sift through large volumes of data, generating reports at the touch of a button. Many of these tools also provide invaluable insights, which are automatically pulled from these reports.
Finally, using reporting and analytics software doesn't only make business operations easier to manage, but it can also help companies increase their ROIs, and stay up to date in today's digital world.
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