Understanding the Difference Between Business Intelligence and Analytics

Understanding the differences between business intelligence and analytics helps companies perform better during the decision-making process, and its solutions help unpack assumptions and get more accurate and useful data.

FREMONT, CA:Business intelligence and analytics are data management solutions implemented in companies to collect historical and present data, analyse it using statistics and software, and deliver insights for making better business decisions. Both terms provide insights into business operations and future decisions, but there are differences in how they do it and what information they provide.

There is not one standard definition of the difference between the two terms. However, they can be differentiated by understanding the direction in time, like past or future, and what companies are concerned with, such as what happened, how it happened, or why it happened.

Business intelligence deals with what happened in the past and how it occurred leading up to the present moment. It identifies larger trends and patterns without digging too much into the whys or predicting what will happen in the future, whereas business analytics deals with the whys of what happened in the past. It breaks down contributing factors and casualties. Furthermore, it uses these whys to make predictions of what will happen in the future.

This indicated that BI and BA have different applications. BI tools help organisations identify relevant trends and provide explanations for various past scenarios. On the other hand, BA is concerned with more advanced applications like predictive analytics and statistical modelling. This allows the two terms to complement each other to offer a complete data picture. Companies can extract the full potential out of their analytical efforts and make improved decisions based on facts by using business intelligence.

The primary difference between the two concepts is their actual definition. Although both of them serve a purpose in the analytical process, they do not serve a similar one. A fundamental differentiation factor is in the method they use as a base. BI is descriptive analytics dealing with what has happened in the past and what is happening now, and BA is predictive analytics concerning what will happen in the future.

Usage is another factor differentiating BI and BA, where the end user and the purpose of use change. BI tools are used to report on the current and past performance of organisations and BA tools allow companies to take it a step further by helping companies decide on their next steps.

Understanding the difference between the two helps businesses establish and perform better during the decision-making process and what can be expected from both terms. BI and BA provide the tools to see reality as clearly as possible. The significance of BI and BA will impact the business operations of a company. Moreover, the need to combine both will become an operational must-have for a successful market presence.