It’s easy to confuse business analytics and business intelligence. However, it should be clear to you that these two processes are different. To make it simple, business analytics is involved in advanced statistics and predictive modeling. On the other hand, business intelligence will help you decide what to do depending on the data that is available.
When you run a custom software development company, you know how both business intelligence and business analytics can address different issues in your organization.
Business analytics and business intelligence: What are they?
Business analytics and business intelligence are data management systems that you use with your mobility solutions. These systems are used to gather existing and historical data. You then analyze it using software or statistics.
This analysis will give you better insights into your company’s overall situation as well as help you make sound business decisions.
There are no hard definitions for each system, which makes it difficult to concretely differentiate the two.
Two main factors can help you know which is which: what type of information are you looking for and what kind of analysis are you trying to do.
With these two factors, business intelligence involves historical data and how events take place. You are looking for trends and conditions.
With business analytics, you are more concerned with why trends develop or why something happens. Because you are looking for the cause of why events occur, you can also make predictions about your company and its operations.
For instance, business intelligence will tell that you that one of your stores sell twice as much during the summer. So, if you want to maximize sales during summer, then you better stock up.
Business analytics, on the other hand, will tell you that not only does your business pick up during summer, but also it’s because there are a lot of tourists coming in and your products are massively sellable to these people.
What other differences are there?
In short, business intelligence will give you the situation without trying to explain how that event happened. Once you start asking “why?”, then business analytics come in.
However, these are not all that separates business intelligence and business analytics. Here are some differences that you will sometimes encounter.
- Business intelligence usually uses present and historical data to give you the information you need. Meanwhile, analytics focuses on previous data to provide you with an insight into your company’s position to increase productivity.
- Business intelligence only deals with analyzed data. Analytics use multiple tools that work with a variety of applications.
- Business intelligence and business analytics are not mutually exclusive. They are, in fact, correlated. You can do business intelligence while doing business analytics, and vice versa. For some tasks, these two processes work together in managing information, data warehousing, risks, business applications, governance, and security.
- Business intelligence analyzes and reports on existing data. Analytics goes beyond that and visualizes the data to help you understand it better.
- Business intelligence uses predictive statistics, predictive analysis, and predictive modeling to lay down the foundation or benchmarks of performance. Business analytics, on the other hand, doesn’t have control over the data you retrieve, analyze, report, and publish.
- Business intelligence gives you information and only that. You get no insights, nor can you manipulate the data. On the other hand, business analytics uses technologies to provide you with ideas, address issues, and solve problems. This happens when business analytics transforms raw data into solutions and insights.
- With business intelligence, you can use a user interface dashboard to analyze the information you have on your operations. Business analytics allows you to work with structured, semi-structured, and even unstructured data. That means you are not limited to just the data that your company actively collects but also information coming from a variety of sources.
- Business analytics gathers and analyzes the data. It will then break it down and look for insights to give you. Business intelligence only processes the data that you have and get information from it.
- Business intelligence helps you run your business more effectively. It can tell you to stock up your inventory during certain times of the year, for instance. Business analytics, meanwhile, helps you grow your business. This means that the data does not only tell you which months have more sales, but also what other products you can sell to increase your revenue.
Which one should you choose?
When you are figuring out which of these two to address a particular issue, then you should be very well versed with each one. You should have a full appreciation of what factors are causing problems in your operations or business.
This is where business intelligence comes in.
Once you know what the problems are and all the factors that are causing it, then you can predict what can happen in the future. Anticipating the most likely things to happen will help you plan. It is also essential to know what you did to succeed in the past and how you can use or repeat that to guarantee the future.
This is where business analytics win.
Now, which one of these should you be using? Both! The two are correlated, so there is no sense in choosing to do one and not the other. Both processes can be complicated, but the truth is that you cannot do business analytics without business intelligence.
Business analytics, on the other hand, make the information you get from business intelligence richer, more detailed, and more useful.
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While business intelligence and business analytics benefit your business in different ways, you should be doing both. If you are looking for what’s best for your company, then you must consider the aims and the targets set by your company.
Let’s say you want to solve day-to-day problems or you want to make sure that your operations are sufficient, then you can do business intelligence.
But if you want to be successful, then you must do business analytics.
Photo courtesy of NEC Corporation of America.