What is business intelligence?
Business intelligence, also known as BI, is a combination of strategies that use data software and company information to provide business owners with an overview of business operations at past and present levels. From this data, business owners can make changes to current operations by streamlining workflow through better communication, technologies and procedures.
What is business analytics?
Business analytics, also called BA, is the process by which company’s use their historical data combined with software technologies to make predictions about the future health of a business and other areas of interest. Businesses use this historical data to create business plans that drive decision-making toward a future-focused goal.
How do business intelligence and business analytics compare to one another?
There are a variety of comparisons that can be made between business intelligence and business analytics. Review the differences and similarities between the two to determine how to distinguish the two and how they can be used in conjunction with one another:
Differences between business intelligence and business analytics
Business intelligence and business analytics have a few subtle differences:
- Business intelligence focuses on the “what” and the “how” of past events while business analytics focuses on the “why” of past events.
- Business intelligence focuses on how to improve operations at the present, while business analytics focuses on what will happen in the future based on past and present company data.
Similarities between business intelligence and business analytics
There are some areas where business intelligence and business analytics overlap with one another:
- Both aim to collect and analyze data
- Both aim to provide a visual representation of data via graphs and charts
- Both provide insights into potential problems and solutions to business operations
Why do businesses need both business intelligence and analytics?
Businesses need both business intelligence and business analytics because together they allow them to make smart business decisions. Here are a few more reasons why they are important:
Helps improve operations
Business owners can review the previous and current efficiency of their company operations to discover new areas for increased productivity or areas that seem to prevent efficiency within daily operations. For instance, a business owner reviews data to discover that certain border regulations slow the transportation process and in doing so contributed to late deliveries to customers. To combat this, they may opt for air or rail transportation rather than roadway transportation.
Creates opportunities to lower operation costs
By reviewing operations data, businesses can potentially identify procedures that could become either fully or partially automated. Further, by being able to review operations data business owners can review costly areas of their business that don’t necessarily contribute to operations. For example, a business owner reviewing operations data may identify a storage location that rarely gets used that could be sold to save costly bills and property taxes.
Makes data more comprehensible for review
Data mining software used in business intelligence and analytics help sort and organize data before creating a visual representation of that data. For example, a company looking to determine whether or not their website is easy to use might use a collection of survey data and site visits to create a visual depiction of user experience.
Tracks customer satisfaction
By storing and categorizing customer feedback through surveys and other methods like testimonials, businesses can monitor the level of customer satisfaction over time or in response to a particular product or service offered. One example of this would be if a business used customer survey data to determine whether or not they should order more of the same product to sell or discontinue it.
Tracks employee performance and motivators
Another benefit of using business intelligence and analytics is that businesses can monitor employee productivity and learn more about what types of incentives and initiatives motivate them to contribute good work to the company. For example, a business determines that a longer onboarding process contributes to better employee productivity and lower employee turnover levels.
Displays patterns in customer behavior and sales trends
It allows businesses to time certain marketing campaigns and product launches around peak sales times in their industry. For instance, a business releases a marketing campaign towards the middle of November to receive maximum engagement from customers ahead of the holiday season. Similarly, a business may wait to make sales calls until midday as data shows that this is the time when customers are most susceptible to buying from the business.
Promotes forward-thinking business initiatives
By using a business analytics approach, businesses can use their company data to make predictions about the future of the business and its direction. One example of this would be if a company determined they could grow their operations by 10% in the next two years by reviewing the average growth rate of their company from previous years.
What roles use business intelligence and analytics?
There are a variety of business roles that can help your company obtain a better understanding of its procedures. According to Rutgers University and Best Value Schools, here is a list of 10 roles that use business intelligence and business analytics in their daily job duties:
- Business Intelligence Analyst
- Project Manager
- Operations Manager
- Marketing Specialist
- Business Consultant
- Business Intelligence Director
- Data Analyst
- Data Scientist
- Data Engineer
- Software Developer
