This question originally appeared on Quora: What is the difference between analytics and reporting, if any?
Reporting and analytics - these types of questions come up a lot, either on Quora, through passing conversation, strategy meetings, etc. The short answer is yes, there is a difference between the two.
Even though many people use the two terms interchangeably, please note that “reporting” and “analytics” are not synonymous. While both “reporting” and “analytics” collect data and information from the same data sources, you can’t have analytics without reporting. And without analytics, reporting doesn’t glean the powerful insights that leads to better business decision-making.
Before we dive into the crucial differences between reporting and analytics, let’s first underline their commonalities. First, reporting and analytics both rely on data captured by the same sources. Meaning, if you’re looking for a single value for Annual Recurring Revenue (ARR) you’d pull a report from appropriate data sources. Similarly, if you want to gather further insights about ARR—you’d perform analyses based on data from the same data sources (more on this distinction later).
What is Reporting?
Reporting is the act of translating raw data into information. This raw data can come from a multitude of data sources such as a production database, an operational database like MySQL, Google Analytics and a CRM system like Salesforce. While the reporting that comes out of these databases are useful, they’re often standardized and summarized versions of raw data.
For example if a Content Marketer wants a report on the number of blog subscribers over the past month, a report would standardize the data from the Marketing Automation database and spit out a number. This report is straightforward and answers the initial question of “how many subscribers did we gain last month?” This might be enough information for your business, but to get the most out of your data—you need analytics.
What is Analytics?
Analytics means to translate information collected from raw data and translate it into insights. Where reporting is meant to be a summation of raw data, analytics is formulated to answer questions, address problems and examine needs. Often, analytics consists of questions, deeper examination of data, predicting and prescribing next steps for businesses.
Essentially, analytics puts data under an intense microscope. Through analytics, you’ll be able to ask not just surface level questions about your data, but truly understand your customer’s interactions with your product and the impact on your business.
Think of the relationship between data, reporting and analytics as the following workflow:
Data → Reporting → Analysis → Action → Value
Business Examples of Reporting and Analytics
Theorizing the differences between reporting and analytics is fundamental, now let’s see their differences in practice. When it comes to reporting and analytics, each part of the business has specific needs for each.
- Calculating the number of qualified leads (reporting) vs. ARR broken down by lead source (analytics)
If you want to understand the sum number of qualified leads over time—a report pulled from data will satisfy your needs. However, if you want to learn more about where those leads are coming from, specifically channel source, then you’re going to have to run analyses via a data exploration tool. For marketers, this distinction between reporting and analytics is important because it informs where your team should allocate time, focus and budget to attract a larger number of leads.
- Calculating the number of active users (reporting) vs. real-time customer insights to reduce churn (analytics)
For Customer Success teams, reducing churn is an obligatory Key Performance Indicator (KPI). So, knowing the exact number of active users is important—it tells you how many customers are using the product on a daily, weekly or monthly basis. But from there, you’ll need to hypothesize how to gain real-time insight to reduce churn—this is where analytics comes in. You can cross-reference the number of active users with in-product activities, etc. and formulate an equation for customer churn.
- Number of opportunities in the sales pipeline (reporting) vs. Forecasting for the next quarter (analytics)
Sales is a numbers game, so reporting on the number of opportunities in the sales pipeline is a go-to report for Sales teams everywhere. This report can be pulled based on what’s currently in your Salesforce (or CRM) database. However, forecasting requires analytics. For Sales leaders, forecasting allows them to hypothesize the likelihood of deals to close and how much revenue the team will accrue. By nature, forecasting is not a report—it’s analytics because it dives deeper into data and answers critical sales questions.
Because many of us don’t have a background in business (Marketing, Customer Success, Sales, etc.), it’s can be difficult for us to pinpoint the differences between reporting and analytics at the departmental level. As a primer, let’s remember that reporting is straightforward whereas analytics is more nuanced based on data and business questions.
The true value of data emerges when an entire organization works together to pair reporting with powerful analytics. With both, the organization is one step closer to taking the right actions for the business.