In this data age, most forward-thinking companies are not content with simply generating and hoarding huge volumes of data in their database. These companies know that in order to deliver on the data promise, they have to stage it for analysis which will enable them to deliver strategic information across the enterprise. For this, the enterprise today is heavily depending on Business Intelligence and Business Analytics to not only manage their daily business issues but also to improve processes, manage workloads, stay competitive and identify new revenue streams and opportunities. Given the rise importance of data, a number of vendors are selling Business Intelligence products under the analytics umbrella. But are Business Intelligence and Business Analytics the same thing? Can they be used as interchangeable terms? Is it fine to assume that Business Analytics automatically comes with Business Intelligence or the other way round?
To be fair, both Business Intelligence and Business Analytics can be confusing terms since they both deal with processing data. However, it should be mentioned that this is where the similarities come to a stop. In this blog, we take a look at these two terminologies and try to understand the difference between the two.
What is Business Intelligence?
The main aim of Business Intelligence (BI) systems is to primarily maintain, streamline and optimize business operations to increase organizational efficiency and productivity.
- BI systems analyze corporate data present actionable information to the stakeholders such as business managers to help them make informed and data-driven business decisions.
- Business Intelligence leverages a number of methodologies, tools, and applications to collect data from both relevant internal and external sources, analyze it, run queries against it and create data visualizations, dashboards and reports to present the analysis to business users to aid both strategic and tactical decision making.
- Simply put, BI takes crude data, refines it and transforms it into valuable business information that helps in improving decision making, improving operations, assessing and managing performance metrics and staying ahead of the curve from the competition.
While previously mainly data analysts or IT professionals had the capability to use BI tools, today with the rise of the data-driven enterprise, self-service BI, and data discovery tools an increased number of business users are using this software themselves.
What is Business Analytics?
Since data is now considered a strategic corporate asset, data-driven companies are now using deeper statistical and predictive analytics by applying statistical algorithms to historical and current business data and gain intelligent insights to improve business outcomes. The process of applying data mining techniques with statistical and quantitative analysis to anticipate business trends and future needs is called Business Analytics (BA).
- BA explores historical data from different source systems and analyses the present utilizing statistical and quantitative analysis, predictive modeling, etc. to drive business decisions and implement meaningful business practices.
- BA tracks key performance indicators, analyzes trend data to assess future outcomes using predictive analytics and assesses past performance to develop future strategies using prescriptive analytics to enable more agility within the organization by helping them adapt and respond to market demands.
BI V/S BA – The Difference
- One of the main differences between BI and BA lies in the roles that they play in an organization. BI looks back in time and provides insights needed to improve performance. BA, on the other hand, is more about anticipating future trends and business needs.
- Business Intelligence deals with the data that an organization has while business analytics deals with what organizations do with the data.
- Business Intelligence leverages data to conduct diagnostic analysis to understand ‘what’ is happening to the business while Business Analytics is more investigative, predictive and prescriptive and works towards understanding ‘why’ something is happening and what is likely to happen in the future.
- Business Intelligence focuses on monitoring and tracking performance metrics and KPI’s and presents the findings in the form of dashboards or reports. BA takes these metrics based on historical data and combines them with current data while correlating them other business influencers to predict future outcomes.
- BI focuses on the application of analytics to raw business data to support the decision-making process while BA uses quantitative data to answer specific questions and is more exploratory in nature.
- BI users are mostly business users who may or may not have IT or technology background. BA users are mostly business analysts, data scientists, IT personnel along with some mainstream business users as well.
- The focus of BI is more on querying and reporting while BA focuses heavily on correlating, predicting and optimizing action items.
The aim of both Business Intelligence and Business Analytics is to help organizations create greater business value by leveraging their data assets optimally. Business Analytics, however, is a far wider and more comprehensive concept than Business Intelligence as it involves the analysis of all kinds of data using sophisticated algorithms and provides deep insights that traditional Business Intelligence is unlikely to identify. It wouldn’t be off the mark to say that, where the realm of BI ends the realm of BA begins.