Over the last several years, companies have turned to intelligent software solutions to help them drive profitability, maintain a competitive edge, and support increasing workloads.
Business intelligence and business analytics tools are used to implement some of the most widely used data management strategies in the modern corporate world. Together, these technologies are used to improve efficiency, productivity and profitability by providing insights and predictions from business data.
The relationship between business analytics and business intelligence is typically symbiotic. However, there are differences between the two, and they are not necessarily dependent upon one another. Here’s a summary of their respective features for CEOs and other decision-makers:
What is Business Intelligence?
Here’s a breakdown of a few of the main traits of business intelligence (BI) software:
- Business intelligence allows companies to retrieve, analyze, and visualize data. Data, which can be be in a variety of formats, is extracted from a variety of sources (databases, transaction logs, documents, measurement collections, etc.). Analysis transforms, reduces or combines data elements to find useful associations or patterns. Visualization presents the analysis results, often in graphical format, for easy interpretation.
- It provides a variety of reporting functions. Users select from a variety of ways to present the data. Reports, dashboards and data visualizations can be tailored for consumption by corporate decision-makers.
- It supports descriptive analytics. Descriptive analytics is the interpretation of historical data in order to understand the changes that have happened in a business. Historical trends can be summarized and visualized.
- It also supports diagnostic analytics. Historical data is analyzed to determine why certain events happened. Often this is used to determine the source of problems.
What is Business Analytics?
Business analytics is the investigation of past business performance in order drive business planning. It focuses on developing new insights from a deep understanding of the business, and leans heavily on statistical analysis. It has a number of similarities to business intelligence, and can rely upon a similar set of tools. One can view BI as a tool to understand the current and historical state of a business, while BA is used for explanatory and predictive modeling, what-if analysis, and predicting the results of trend following.
The Right Tool for Your Business
Today, data and content cannot exist as islands within an organization. Instead, they must be integrated together into a single management approach. To this end, many companies are looking for solutions that allow them to present data in a single dashboard in order to facilitate decision-making.
Although BI and BA may seem similar, they serve different purposes, and those differences are important. While BI uses past and current information to understand the present, BA uses past and current data to optimize for the future.
Deciding when to use each solution requires you to think carefully about your company’s needs and intentions. Both tools have their place within the corporate environment, and selecting the right one is an excellent way to optimize your business.