We have great potential in the massive amounts of data collected by our businesses, and it’s the source of every company’s revitalization and refueling for the next leg of their journey. It’s where we all stop for a moment to re-evaluate our course of action to date, and where we plot our coordinates going forward.
Business Intelligence vs. Analytics – What Makes Them Different?
The way to improve on our decision-making process is to tap into this data in two ways. Business intelligence (BI) uses data to look at the efficacy of past actions while Business Analytics (BA) uses data to predict future outcomes.
Different Diving Boards, Same Pool
Both use the same data to gather their insights, but they approach the data pool in a different way. Each approach is vital for an organization. BI draws conclusions from historical data, while BA is forward-looking with planning and forecasting. Both require different statistical techniques, datasets, skills and tools for their findings. They are complimentary forces coming together to create a whole picture – it’s Lois and Clark, mac and cheese, rubber and the road. They are not fulfilling all requirements on their own, but represent a powerful team for a company to make good decisions.
Business Intelligence: Retrospective Results
Business Intelligence clearly shows what aspects of an organization’s products or services are weakest and which are strongest. It will highlight if given goals were met and exceeded or not achieved. It will reveal if the targeted audience was reached with the chosen campaign, and if it resulted in conversions.
BI constantly focuses on the metrics that measure past performance, answering questions like –
• “What happened?”
• “How many?”
• “How often?”
• and “Who?”
Business Analytics: Time Travel
Business Analytics uses these insights to predict future customer behavior and proposes campaign changes, or attempts to model a specific change. Analytics is involved with continuous iterative exploration – repeating what works and getting rid of the chaff. Its investigation of data reveals insights that can be used to create the strategy going forward. Smart businesses know that BA is what drives the planning process.
BA is more concerned with the questions like –
• “What will happen next?” (forecasting/prediction)
• “What could be the best outcome?” (optimization)
• And “How can we make it happen?” (strategic planning)
Business Analytics interrogates what trends are occurring, and what will happen if they continue. It helps to inform the next step to take that will have the best outcome. These predictive analytics can reliably indicate what is going to happen in your business in the future, including a few alternative scenarios. BA is constantly extracting insights from the data sets to both forecast opportunities and identify potential risks.
What are the Similarities Between the Two?
The Bigger Data Set, the Better
If you want to talk similarities, both BI and BA rely heavily on quality and quantity of data. You are not going to be able to make use of the data if the sample size is too small, because the conclusions drawn will not have any major impact. There will not be enough evidence to support actionable insights. BI and BA can only be effective if they are working with large amounts of clean data. And Big Data is only getting bigger as we all gain access to the cloud.
Overlap in Production and Discussions
In some companies, there can be entirely separate teams of employees who work on each data approach. They could be using different software systems to extract the relevant information from the data. This depends on their IT culture and size of business. There can be overlap here of BI and BA, depending on how each business chooses to collect and process their data resources.
Another overlap between Business Intelligence and Business Analytics is that we are seeing the rise of the two terms being used interchangeably across the web – a linguistic transformation. As each new company attempts to distinguish their particular BI and BA software products, they play with the terminology. We see the use of the term Business Analytics being used to encompass both approaches. You will see this trend clearly if you utilize the Google Trends tool where you see that the word usage of “Business Analytics” has been on the increase over the last few years. Whichever term used, it always describes how you use your own data to solve problems.
There seems to be a blurred line where the one job finishes and the other one begins, but they are most certainly two different processes, often deployed right next to each other. At the moment, you need both to get the work done. This boundary may continue to merge with the increased accessibility to data and analysis due to cloud computing and inexpensive storage options.
What Does the Future Look Like for Each?
The Road Ahead
The BI and BA landscape continues to evolve with new trends emerging. In 2017, we will see how businesses begin to customize their internal data collection. Businesses understand that it’s no longer a question of “if” they need access to BI and BA analytics, but what the best product or solution will match their organizations specific needs.
You would think that businesses are leveraging both approaches to maximize their efforts, but sadly, most are leaving their data in storage – unattended and untouched. According to a Business Intelligence Data Analysis Survey in 2016, only 13% made use of their data’s predictive capabilities. This is set to dramatically change in 2017. If companies are using the full force of their BI and BA solutions, they are going to take a quantum leap ahead of all competition.
Big Benefits and Trends
The latest BI and BA data services are powerful tools that can take on massive sizes and scales of datasets. This means you can free up your staff’s time, and they will need less training because of the easy user functionality. You no longer need a data scientist to make full use of your stored data. You no longer need your own data architecture, in-house administration and data storage because – thanks to cloud solutions – it’s all cheaper, safer and easy to remotely access.
Ultimately, brands and organizations should be engaged in the conversation around what data can do using BI and BA to grow their businesses. Especially since it is so easy to access these days! BI-Survey’s top Business Intelligence trends for 2017 speak of self-service BI, collaborative BI, BI Center of Excellence (CoE’s) and artificial intelligence. But we’ll unpack those trends in the upcoming posts.