Business Intelligence And Analytics: An Important Overview (2021)
Introduction
If someone asks you, “Difference between business intelligence and business analytics”? If you don’t know the answer, don’t worry. Even experts see eye to eye! There is a very thin line between business intelligence and analytics, but at the same time, they are extremely connected and interwoven in their approach towards resolving business-related issues. They provide insights on past and present data and help to make important future decisions.
- What is Business Intelligence
- What is Business Analytics
- Difference Between Business Intelligence And Analytics
- Importance of Business Intelligence
- Examples of Business intelligence and Analytics
1. What is Business Intelligence
Business intelligence meaning (BI) is to collect, store and analyze data from various business operations. BI provides all-inclusive business metrics to help superior decision-making. You can build performance benchmarks, market trends and improve nearly every aspect of your company with business intelligence. BI uses software and algorithms to extract actionable insights from its data and guide its strategic decisions. It only shows past and current state: it doesn’t say what to do, but what is or was. The responsibility to take action still lies in the hands of the executives.
2. What is Business Analytics
Business analytics (BA) is the amalgamation of skill, technology, and practices used to study an organization’s data and performance to understand market trends. With the help of those insights, you can make data-driven decisions for the future using statistical analysis. BA’s objective is to slim down which datasets are practical and increase sales, efficiency, and productivity. When used accurately, BA can be used to predict upcoming events that are correlated to the behaviour of customers.
To make wiser decisions and to generate sustainable profit, you need tools to turn your data into actionable insights. They are used to understand past and contemporary data and create opportunities.
“Business intelligence is needed to run the business, and business analytics is needed to change or expand the business.”
3. Difference Between Business Intelligence And Analytics
The main difference between business intelligence and business analytics is the answer they provide to different questions.
The focal point of Business intelligence is eloquent analytics
BI focuses on descriptive analytics, which provides a synopsis of present and historical data to illustrate what has occurred or what is presently happening. BI answer the question “what” and “how” so you can repeat what works and alter what doesn’t work.
The focal point of Business analytics is projecting analytics
BA, however, focuses on predictive analytics, which uses modelling, data mining, and machine learning to determine the probability of future outcomes. BA answers the question “why”, so it can make more educated predictions about what will happen. With BA, you can foresee developments and make the necessary changes to succeed.
4. Importance of Business Intelligence
The main purpose of BI is to help departments, managers, and top executives make informed decisions backed up with analyzed data. It will eventually help them identify new business opportunities, control costs, or identify inefficient segments that need reengineering.
BI users analyze and present data in the form of business intelligence dash and reports, imagine complex data in an easier, more amicable and lucid way. BI can also be referred to as “evocative analytics”, as it only shows current and past state: it doesn’t declare what to do, but what is or was. The accountability to take decisions still lies in the hands of the managers.
The benefits of BI and BA are profuse and varied, but importantly they bring to power. Whichever unit they touch, they can refurbish your organization and the way you do business. The benefits are many but, here are 5 main benefits:
1. Understand your customers more efficiently
2. Drive performance and income
3. Identify sales trends
4. Provide customized service more easily
5. Improve operational efficiency
There are many business intelligence tools like Micro-strategy, Yellowfin BI, Zoho Analytics, SAP Business Intelligence, IBM Cognos Analytics, Datapine, etc.
5. Examples of Business intelligence and Analytics
Let’s take an example to demonstrate the difference between business intelligence and business analytics.
If there is an advertising firm that uses both business intelligence and analytics to help big e-commerce companies launch new products. To analyze what new products would be most likely to succeed. We need to use BI to know what products had been successful in the past, seasonal trends that had influenced success. For example, let’s say that your imaginary e-commerce store sold high-class women’s fashion. You will need to understand what products will work.
First, you would examine what categories of clothing are driving the most profits. Then, you can examine what times in the year those successful products had been launched.
Now comes BA as to answer why customers bought the past successful products. Finally, you might do a couple of in-detail customer interviews to find out what was the reason for customers to like those categories or pieces more than the others.
If you do enough market research and have a big sample size, you should be able to forecast with a great deal of accuracy which novel products will probably succeed.
Conclusion
Ultimately, business intelligence and analytics are about much more than the technology used to gather and analyze data. They’re about having the attitude and mindset of an analyst and being keen to let data guide a company’s decision-making process.
If you are interested in making it big in the world of data and evolve as a Future Leader, you may consider our Business Analytics Course, a 10-month online program, in collaboration with IIM Indore!
