Business Intelligence Vs Business Analytics | 5 mins read

Business Intelligence vs Business Analytics- How Do They Stack Up?

business intelligence vs business analytics how do they stack up
Mary Kate Morrow

By Mary Kate Morrow

Business Intelligence vs Business Analytics

Business intelligence and business analytics are two terms that are often used interchangeably and incorrectly. However, a failure to define business analytics and business intelligence properly can lead to incorrect utilization. As a result, companies can majorly miss out on the unique benefits that business analytics and business intelligence offer. Unfortunately, business analytics and business intelligence may have different definitions depending on who you ask. Additionally, there is an ongoing debate about whether business analytics is a subset of business intelligence or vice versa. Thankfully, there are widely agreed upon definitions of business analytics and business intelligence in addition to analysis of their relationship.

Business intelligence, regularly abbreviated as BI, is commonly defined as data usage for day to day operational management. Data science technology advancements such as machine learning have impacted how some business analytics professionals defined business intelligence. As such, some business intelligence definitions incorporate business analytics and various data analytics processes. Business analytics, regularly abbreviated as BA, is defined as the use of statistical methods and technologies for historical data analysis. The objective of business analytics is to both improve data driven decision making and obtain new insights. Both business analytics and data analytics are considered subsets of business intelligence.

A reason for the conflation of business analytics and business intelligence is often attributed to other data analytics linguistical misunderstandings. One such example is between reporting and analytics. Reporting is the process of data organization that produces informal summaries used to monitor various areas of business performance. Analytics is a process that explores data and reports in order to extract valuable insights. The insights analytics supplies assist with understanding and optimizing business performance. Essentially, while reporting presents data, analytics interprets data.

The same conflation is also applicable for data science and data analytics. Data science is a multidisciplinary umbrella that mines big datasets utilizing tools like machine learning and predictive modeling. Alternatively, data analytics is much more concentrated and specific than data science. There are helpful metaphors that illustrate the difference between data science and data analytics. For example, if data science is a house, data analytics is a small room within the house.

The overlapping relationship between data analytics and data science is comparable to the relationship between BI and BA. Understanding similarities and differences between BI and BA can assist with proper big data processing and optimal management software selection. Business analytics and business intelligence tools are typically considered the most popular data management solutions. As such, it is absolutely crucial to understand both BA and BI as much as possible.

Differences Between BI and BA

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There are differences between business analytics and business intelligence worth noting. Many business analyst professions consider the most significant difference between BA and BI as the questions they answer. BI focuses on descriptive analytics while BA focuses on predictive analytics. Descriptive analytics supply a summary of both present and historical data in order to understand business performance. As such, BI focuses on answering how and what can be replicated or changed for optimal business performance.

Prescriptive analytics determines the likelihood of future outcomes utilizing data analytics tools like machine learning and data mining. Business analytics answers why questions in order to make data driven predictions. Business analytics does not use diagnostic analytics while business intelligence does. Diagnostic analytics determine the source of any issues identified during the descriptive analytics process. Using prescriptive analytics, business analytics offers solutions for any issues found during descriptive analytics and big data discovery.

Many business analyst professionals find real world examples beneficial for comparing BI and BA. If an online makeup company sells more blush one month, business intelligence will indicate that outlier. Using BI, the company would likely order more blush in order to keep up with customer demand. Business analytics would investigate why blush sales went up. Through data mining, BA may discover that the increase in blush sold resulted from a social media influencer post.

That BA insight motivates the cosmetics company to send complimentary blush to other influencers. BA also anticipates how many units of blush to purchase if the influencer posts are similarly successful. In this scenario, both BA and BI are helpful though BA supplies much more specific information.

Similarities between BI and BA

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Both business analytics and business intelligence leverage big data to improve business operations. Despite big data being a component of both, the most prominent similarity between BA and BI is arguably their overlap. Remember, many business analyst professionals consider BA as a subset of BI.

Both business analytics and business intelligence collect, analyze, and visualize data. Throughout these processes machine learning and various data analytics tools are commonplace. BA and BI both identify pain points with big data and produce suggestions for optimization. Reporting is also part of both BA and BI through the organization and presentation of big data for visualization. Although BA is more future focused than BI, both are essential for business performance improvements. Both BA and BI are useful for companies to better understand and optimize business performance.

BA and BI are also both majorly simplified and streamlined with the correct implemented management software program. Business intelligence management software and business analytics management software have many similarities. The similarities between business intelligence management software and business analytics management software are unsurprising when considering their overlap.

Key Takeaways of Business Intelligence Vs Business Analytics

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  • Although both are useful for companies, business intelligence and business analytics have notable similarities and differences.
  • A significant difference between business intelligence and business analytics are the questions that each answer in regards to business performance.

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