Operational vs Analytical Data: Key Differences

February 23, 2024
15 min read

Data is the cornerstone of all operations you conduct in your organization. Since data comes from various sources, you are constantly trying to organize and analyze large datasets to make the right decisions. However, it is crucial to understand what type of data you are dealing with. This comprehension helps in using the required data at the right place and time. 

In this article, you will learn about two important data types: operational and analytical data. You will also learn about three key differences between them so that you can segregate and use both datasets properly. Read on to find out more about the comparison of operational data vs. analytical data.

What is Operational Data?

Operational data, as the name implies, refers to the data generated by your organization’s daily operations. It can encompass customer information, purchase orders, sales records, inventory lists, and HR databases. Operational data should typically be stored in a consistent format, as it is a reliable source for obtaining the most current information on various business departments.

How to Classify Operational Data?

Operational data can be classified into different categories depending on your organization’s departments and style. You can create a business operational data segment that has relevant datasets for your business processes, customers, sales, or purchase data. There can be separate operational data for the IT department, which describes the datasets linked to technological servers, digital services, and SaaS applications.

What is Analytical Data?

Analytical data refers to the datasets that are ready for analysis after being consolidated, standardized, and transformed. Once you have brought together all your operational data from different sources, you must verify, categorize, and standardize each section. Your datasets can be further divided into different specialized categories like customer segmentation, sales data, and more. 

Analytical data is often intricate and utilized for making strategic business decisions. Your organization’s analytical data will be different from others, depending on your unique requirements and objectives. You can perform various analyses on it to determine demand patterns, the latest trends, consumer behavior shifts, and more.

Different Data Analyses that You Can Conduct

A segment of your operational data can be considered as analytical data, or data that is ready to be thoroughly examined. There are four popular methods that you can adopt to extract meaningful insights from your dataset:

  • Descriptive Analytics: Descriptive analytics is done to extract trends and patterns from raw data to provide a clear understanding of past and current events. You can use this analysis to ask the question, “What happened?”. The data will simply describe what has taken place so you can get a quick bird’s eye view of the whole situation. There are two methods that you can use to conduct descriptive analytics: data aggregation and data mining. The former process is used to collate data from multiple sources, while the latter is used to explore the dataset to find patterns or trends.
  • Diagnostic Analytics: Diagnostic analytics delves deeper to uncover the reasons behind a particular event, phenomenon, or anomaly. You can answer the question, “Why did it happen?” and understand causality and correlations within your dataset. Diagnostic analytics can help you fix problem areas by finding out the root cause, as well as identifying the grounds behind a positive outcome. To conduct diagnostic analytics, you can use several techniques, such as filtering, regression analysis, time series forecasting, and more.
  • Predictive Analytics: With predictive analytics, you can leverage historical data and industry trends to forecast future outcomes. You can use past patterns and projections to answer the question, “What might happen in the future?”. For this type of analysis, you need to study the relationship between two variables to make predictions or avoid an event in the future. You may also use predictive analytics for classification through logistic regression to predict whether or not an outcome will take place. Thus, it is helpful when you are aligning sales strategies or purchase orders for the future. 
  • Prescriptive Analytics: Prescriptive analytics goes beyond predictions to recommend actionable strategies. It helps you answer the question, “What should we do next?” by considering various factors to suggest an optimal course of action. You can make use of machine learning algorithms to analyze large datasets and understand what steps you must take based on mathematical models. Through these algorithms and statistical methods, you are able to automate the decision-making process to an extent and simplify the extraction of meaningful insights from complex data.

Operational Data vs. Analytical Data: Storage and Processing Systems

To manage your operational data better, you must make use of systems designed to handle large volumes of data with low latency. These systems often use Online Transactional Processing (OLTP) tables, which support operations where individual data pieces need to be read, updated, or deleted. The processing can be done in real time or in batches at frequent intervals. The quick processing abilities are crucial for efficiently managing day-to-day operations and keeping datasets updated.

However, since your organization has several different departments, the first step is to extract all operational data in one centralized location. It is an important step because bringing your data to a single repository allows you to view the dataset in its entirety and understand areas that need to be transformed or improved. The repository you choose must be a specialized system designed for storing and processing large data volumes for heavy aggregation, data mining, and query processing. 

Your operational datasets may be stored in cloud-based human resource management systems, customer relationship management systems, local spreadsheets, Excel files, and more. To migrate this data together, you can go with Online Analytical Processing (OLAP) systems or cloud data warehouses. Since it is a time-consuming process to collate and load data directly into a database storage solution, you can set up a data pipeline with Airbyte.

Airbyte is one of the leading data integration and replication platforms. Using this tool, you can gather data from multiple sources and load them directly into your desired destination without writing a single line of code. The platform has a 350+ pre-built connectors library, which you can leverage to source all your datasets. Even if you do not find a connector for a particular source or destination, you can simply build a custom one with their Connector Development Kit (CDK). Airbyte has a large open-source community that is dedicated to building and maintaining connectors, helping you overcome challenges if you encounter any. Additionally, when you deploy Airbyte for your entire organization, there is a dedicated team of experts who will readily provide you with solutions and assistance.

Airbyte also offers Change Data Capture (CDC) abilities through which you can capture and sync changes made to your data at source with the destination. All you have to do is set up an incremental sync frequency that ensures your datasets stay updated in the cloud data warehouse. This is quite useful when you need to perform analysis and forecasts for the future. It ensures your data stays updated, giving you accurate results and suggesting a better course of action.

Analytical Data vs. Operational Data: Use Cases

Although operational and analytical data usage may overlap, it is good to know how both can be utilized well in different scenarios.

You can leverage operational data to track inventory levels, sales, and customer transactions across various touchpoints. Since you have a 360-degree view of your customer database, you can personalize market efforts to improve customer engagement and satisfaction. Additionally, you can use operational data store to manage logistics, supply chain activities, product availability, billing and shipping functions, and track the status of orders. On an internal level, you can optimize business procedures and employee morale. It will increase performance efficiency and bring satisfaction to your team members, reducing employee attrition.

Once you further process operational data and make it ready for analysis, you can diagnose problems, comprehend market dynamics, and explore new avenues. By accessing intricate trends in vast datasets, you can conduct better market research, devise innovative strategies to assess product viability, and improve production efficiency. Through proper analysis, you can understand opportunities and threats for your organization, allowing you to gain a competitive advantage. Moreover, well-analyzed data aids in minimizing financial losses as you get concrete evidence from historical data. This makes way for informed decision-making and better return on investment (ROI). 

The Final Word

In the analytical data vs. operational data comparison, you have learned how the two can differ from one another. It is a good practice to keep all the data that is generated and processed in dedicated cloud-based systems. These applications are equipped to handle large data volumes and store, process, or transform your data into formats that suit your organization. 

You can migrate your data into these systems or from these applications to other cloud-based database storage solutions through Airbyte. Here, you can set up a data pipeline in two simple steps. Register today and start for free!

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