Let’s be clear from the start – business intelligence (BI) is NOT business analytics and vice-versa. While these two terms are often used interchangeably they are undeniably different. It is easy to confuse them, given the fact that both are data management technologies under the broad umbrella of the BI field. But the fact is, business intelligence is the information required to run a business while business analytics explores historical and current data to provide insights on future business performance. Here’s a quick table to explain the differences:
Business Intelligence vs Business Analytics: The key differences
Business Intelligence and Analytics – Past, Present and Future
Traditionally Business Intelligence referred to tools or platform with the ability to access, map and manage data which included development tools to create reports and dashboards. Analytics on the other hand is all about ‘analyzing’ information – whether descriptive (past), prescriptive (current) or predictive (future) including the tools to do so.
Today, most BI platforms offer extensive and sophisticated analytical capabilities including data mining, predictive modeling and visual analytics, more commonly known as Data Visualization. So, while users still get the value of in-depth reports and dashboards, it is often complemented by beautiful and easy-to-understand charts, graphs and visual analysis of business-critical data.
Another differentiating factor has been the rise of cloud services and SaaS providers. Back in the day, Oracle, SAP, Microsoft or IBM held complete monopoly over BI tools – you would have to buy it from them at choice prices. Today even SMBs can access the tools required to perform their own analysis without investing in a full-scale BI infrastructure and rather than complicated analysis tools, knowledge of Microsoft Excel is enough to start off with to create comprehensive data visuals and statistical analysis.
Business Intelligence vs Business Analytics: Which is better?
This brings us to the question – which one is better? Honestly, both are two different technologies and their use depends on an organization’s need and business focus. Companies that rely on humongous amounts of data – data warehouse – might get more value out of Business Intelligence as it will help improve operational efficiency and productivity, while enterprises that are still in the process of scaling up or start-ups might do better to invest in Business Analytics to understand the market and gain a competitive advantage. Then there are those companies that can combine the two to optimize their business performance and achieve greater success. Ultimately the point is to choose the one that is best for your business.