You might have heard of the terms business intelligence and business analytics which most people use interchangeably. Yet, business experts deliberate whether business intelligence falls under business analytics.
It is essential to understand the difference between business intelligence and business analytics. The knowledge will help leaders choose the right talent and tools to aid in the growth of businesses. Moreover, students can use the knowledge to assess the educational programs that can best prepare them for successful careers.
What Is Business Intelligence?
Before looking at the difference between business intelligence & analytics, you must understand what each means. Business intelligence is a technology-driven process to analyze data and deliver actionable information to assist managers, workers, and executives make informed decisions. Organizations can collect data from external sources and internal IT systems, prepare it for analysis, run queries, and create visualizations, reports, and BI dashboards. This makes the reports from the analytics available to business users for strategic planning and operational decision-making.
The main goal of business intelligence is to drive better decisions for the business. It allows the organization to improve operational efficiency, increase revenue, and gain a competitive advantage over other businesses. Business analytics combines data management, analytics, reporting tools, and other methods of managing and analyzing data to actualize these goals.
How Does the Business Intelligence Process Work?
An excellent business intelligence architecture incorporates more than business analytics software. Business intelligence data is kept in a data warehouse created for a whole organization or in small data marts. The marts keep subsets of business information for business units and individual departments, which often have ties with an enterprise data warehouse. Additionally, data lakes based on big data systems or Hadoop clusters are increasingly used as landing pads or repositories for analytics data and business analytics.
Business analytics can include real-time data and historical information from source systems as it is generated, allowing BI tools to support tactical and strategic decision-making processes. Raw data from different source systems are integrated and cleansed to ensure business users are analyzing accurate information. From there, you will take the steps below for the BI process:
- Data preparation – Here, data sets are organized and modeled for analysis
- Analytically querying the prepared data
- Distributing key performance indicators and other findings to business users
- Using the information to help drive and influence business decisions
What Is Business Analytics?
Business analytics is a field that is more statistical-oriented. It allows data experts to use quantitative tools to develop future strategies and make predictions. For instance, while BI can tell you what your customers look like, business analytics will tell you what future customers are doing. Some experts use business analytics to describe a set of predictive tools used within business intelligence.
Business analytics tools have various functions, including regression analysis, factor analysis, correlation analysis, text mining, forecasting analysis, image analytics, and others. The tools require companies to contract data scientists and have increased the demand for business analytics training.
How Does Business Analytics Work?
Business analytics starts with several foundational processes before any data analysis takes place. Below are the steps:
- Determine the goal of the analysis in line with the business
- Selecting an analysis methodology
- Getting business data to support the analysis often from different sources and systems
- Cleansing and integrating data into a single repository, such as a data mart and data warehouse
The initial analysis is done on small sets of data. Analytics tools range from spreadsheets to complex predictive modeling and data mining applications. Patterns and relationships in the raw data are established before new questions are asked, and the analytics process iterates until the goal of the business is achieved.
What Is the Difference Between Business Intelligence and Business Analytics?
Below are some of the differences between business intelligence and business analytics.
- BI uses current and past data, while BA uses past data to get insights and run the business’s operations that drive customers’ needs and enhance productivity.
- BI focuses on reporting analyzed data, while business analytics concentrates on various tools that perform different operational applications.
- BI analyzes existing data, while BA uses BI reports as inputs for the analytics to process the extracted information more complexly to visualize the analyzed data.
- BI uses predictive and statistical analysis to set current trends and determine the reasons for current outcomes. BA has no control over large amounts of data to retrieve, analyze, report, and publish.
- BI has more User Interface Dashboards to carry out the operations and analysis, while BA has tools that need software application knowledge to carry out the tasks.
- BI can be applied to structured data, while BA can be applied to structured and unstructured data.
Business intelligence focuses on past data to operate the business efficiently. On the other hand, business analytics looks into past data to analyze present scenarios and prepare for future businesses. BI and BA play different roles in operating the business based on requirements. You must understand each to know which tools best suit your scenario. Consequently, you will grow the business and attain its goals.