Why data analytics will never replace business reporting

Data analytics is a common term these days, yet most organisations still rely most heavily on standard business reporting. 

Even before currency was commonplace, business owners kept ledgers. The first recorded balance sheet was one created by an Italian Monk, Luca Pacioli, sometime during the late 1400s, and around the same time, an inspirational character called Benedetto Cotrugli wrote a text outlining the benefits of having a double-entry system for book-keeping. (Click here for a history lesson)

While the methods with which we produce reports has changed dramatically, the principle and focus remains. Quills and parchment may have been replaced by pixels and PDFs, but balance sheets still balance.

So what exactly is reporting?

Reporting is a method of organising and summarising data in a structured and accepted way; a way that provides the reader with information through which they can infer knowledge.

Let’s consider a balance sheet. It presents the data held in a company ledger in a standard and accepted format. It’s a common report in any business, a standard report in all accounting packages, and usually follows the same structure – regardless of how many zeros appear after the dollar signs. 

Reading and understanding a balance sheet requires knowledge and familiarity with the report. Once you possess these skills, the balance sheet can give you the majority of information that you need to know about the financial health of a business.

The same principle applies to all reporting. Reports are designed to provide information on a very specific topic, or to answer specific questions. They essentially convert data into information, which allows the user to convert that information into knowledge.

How does reporting differ from analytics?

Analytics, by contrast, allows the user to dig into a reporting layer and see the available information from a non-standard perspective.

Again, let’s consider the balance sheet.

If this information is presented as an interactive report – one which allows the user to filter, sort and drill into – then the value of this report increases exponentially.

An analytics dashboard presents data in a standard structured way, and also allows the user to question it. This means they can dig into a specific cost category, region or period of time, and examine the underlying data. They can look at aggregate trends as well as the micro trends, and can dig as deep as they need to in order to answer any questions they may already have.

With analytics, users aren’t shackled by a standard reporting structure, which can be immensely valuable.  Instead, the user receives data with a specific context which casts the information as knowledge and offers a far wider view.

Another advantage of analytics is the ability to blend together different data sources to create much richer insights, which can lead to far more informed decision making.

So should we all be embracing analytics?

Essentially, yes. 

On the data transformation spectrum, reporting gets us only so far:

By enabling deeper, more interpretative findings, analytics can lead to much richer and more valuable insight. Reporting can give you the answers – providing you have the right questions. However, analytics gives you the tools to ask the right questions in the first place.


While reporting has formally been around for 600 years, Data Analytics is relatively new.  It will take off very soon and the question is, are you ready?

Both business reporting and Data Analytics are essential in business but both are very different.

You need business reporting.  You can’t live without analytics! 

Trust me, I’m a Data Scientist


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