The Difference Between Reporting and Analytics and Why They Both Are Important
Should you be involved in marketing, sales, or both, you’ve likely seen plenty of discussions on both “reporting” and “analytics”. Sometimes, the two may be used interchangeably, with authors freely switching between the two throughout articles. On other occasions, the two may be conjoined; “reporting and analytics”, as one, with no clear distinction between the two. However, the two terms are indeed different, and the differences between them are indeed valuable to note in many contexts. Nonetheless, both are valuable in just as many contexts, regardless of their differences. Thus, in this article, we will outline the difference between reporting and analytics and why they are both important.
First and foremost, let us define the two terms to outline their most fundamental difference.
An adequate definition for the practice of reporting should be “the process of compiling and visualizing data into readable formats”. To expand it, we may add its purpose; “for the purposes of highlighting useful, actionable information for relevant teams”.
Thus, at its core, reporting has a specific set of characteristics:
Conversely, analytics might best be defined at their core as “the process of analyzing data”. Cambridge defines data analysis as “the process of examining information”. Therefore, to elaborate, we might add, “for the purposes of interpreting it and extracting valuable insights”.
So, while still examining their fundamentals, analytics
Thus, while the two may synergize, they fundamentally differ in purpose.
Now, the differences between the two run deeper than this basic differentiation. Specifically, the two differ in concept and in practice as regards purpose, outputs, and value, among other areas.
Perhaps most fundamentally, as highlighted above, the two differ in purpose. Reporting intends to provide readable data to different teams, while analytics intends to let said teams extract insights from it. Thus, reporting will relay raw Key Performance Indicators (KPIs) to appropriate teams, including:
Instead, analytics will pose deeper questions for these teams, based on the same KPIs:
From this dichotomy alone, we may deduce that the difference between reporting and analytics is indeed crucial. When evaluating the features of such solutions as Customer Relationship Management (CRM), for example, focusing on the exact purpose each will serve will allow for choices that best align with your needs.
On that subject, the two differ substantially as regards acquisition and analysis of CRM data. As CRM remains an integral part of many businesses’ workflows, this is an equally vital distinction to note. Both can reveal clever ways to use data provided by CRM, but different ways nonetheless.
Reporting functions will help break down data silos, ensuring different departments remain coordinated. They will provide key data to appropriate sales reps, marketers, managers, and others, ensuring efficiency. Such data will typically include:
Analytics functions will instead strive to fuel such features and functions as:
In doing so, however, they will require data interpretations. Attributing changes to any one metric will require critical analysis and evaluation, as analytics-first strategies will often dictate.
Finally, reporting and analytics also differ as regards outputs. In brief, the former entails a “push” approach, as the latter does a “pull” approach. That is, reporting pushes outputs onto users and does not require additional input on their part. Once an appropriate user has received a report, no further interactions with the reporting medium are necessary. In contrast, analytics entails a pull approach, whereby recipients are required to take further action. Put differently, analytics provides interpretations of data that may be discussed, debated, and contested. They require further interaction through scrutiny and deeper, critical analysis.
In turn, the two offer different relative value to any given business endeavor. That is not to say that one is more valuable than the other in isolation, but only that different established workflows may value one more than the other. A business that encounters data silos may require better reporting, while one that needs actionable insights may value analytics tools.
To elaborate on this final point, we may note that both are essential assets for decision-making. As Infinit-o puts it, “[d]ata alone is useless, and action without data is baseless”. In this context, they rightfully identify data as the starting point, reporting as the distribution step, and analytics as processing. Thus, not only do they both serve autonomously distinct, useful purposes, but they also synergize toward the same overall goal.
Initially, both reporting and analytics feed off your data collection assets and practices. They may indeed require different tools to fully utilize, but they do not introduce a need for drastic workflow changes. Both hinge on your acquired data, and both synergize toward enabling it to inform your decisions.
Then, reporting offers immense value simply on account of it fulfilling its purpose. It consolidates data, organizes it into a readable form, and distributes it to relevant teams. Thus, it allows for data dissemination as the crucial first step toward extracting valuable insights.
Finally, analytics dig deeper into said data to extract as much value as possible. They serve to bridge the gap between readable but raw data, and data-driven action. Whether it is proactive measures or reactive readjustments that may best provide value, it is analytics that will reveal them. Analytics will connect cause and effect, and help forge the path to continued success.
Thus, we may conclude that the difference between reporting and analytics is notable and substantive. The two terms see some overlap, in that they both delve into data, but they are distinctly different nonetheless. Reporting organizes data into readable forms and disseminates it to relevant teams. In turn, analytics analyze said data, interpreting it and extracting insights to inform decisions. Thus, one may only hold more value than the other contextually; data requires reporting, and reported data involves analysis. Both are essential components of the same process, synergizing harmoniously toward augmenting decision-making and ensuring success.
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