A report by Data Never Sleeps 5.0 showed that every day, internet users generate close to 2.5 quintillion bytes of data. The number is high, which shows that there’s been a huge upsurge in the amount of data being generated, over the past few years. More and more information is produced every day and there is an urgent need to analyze this data and leverage it for profits.
Businesses these days are relying on data analytics for making business decisions, based on past data as well as future predictions. At a glance, business intelligence and business analytics may seem like the same thing and these terms are used interchangeably oftentimes. Let’s take a look at what each subset is.
Using data for managing day-to-day operations in a business is called business intelligence. Using BI tools, leaders collect data to maximize workflow as well as achieve business goals. These tools include data mining software, spreadsheets, reporting, and analytical processing software. The biggest application of business intelligence is data visualization. With BI tools, data can be presented in the form of charts and graphs, which makes it easier for professionals to monitor the efficiency, productivity, and logistics of different departments in an organization.
Business analytics is a statistical-based subset of data analytics wherein using tools and technologies, future predictions or strategies are designed for a business. Business analytics is implemented in various domains such as finance, manufacturing, and marketing. Due to the upsurge in data, the opportunities for BA as well as BI professionals are tremendous. These are some of the most sought-after positions in the market currently, due to the huge demand and short supply of trained professionals. You can pursue online certification courses such as Business Analytics with Excel, to acquire these skills and kickstart your BI or BA career.
These are the differences between business intelligence and business analytics –
- Business intelligence is more focused on past events in terms of data, that led to the current scenarios whereas business analytics is concerned with what is going to happen in the future. The data used in both practices is the same, but there is a difference in the timeline. To sum it up, business intelligence is all about what is currently happening whereas business analytics is all about what is going to happen next. Using BI, strategies are formed for current events. As compared to this, BA is used to design strategies for future events.
- How data is used in both BI and BA is a major difference. BI is focused on descriptive analytics – it shows what has happened until this point, what is currently happening, and why. BA is focused on predictive analytics – it identifies patterns and trends in data, based on which it predicts future results. For example, if you have an online business where you sell accessories. BI will tell you that the sales of a particular pair of sunglasses have spiked in one location, in the past few weeks. So, you’ll get more of those sunglasses. BA will analyze the reason behind the spike in sales of the sunglasses. It will mine your website data to pinpoint the action that led to this.
- BI can be handled by any professional if they use the correct tools. However, for BA, a professional would need to possess data analysis skills and training. Data presented using BI is done in a manner that managers, accountants, or marketers who don’t possess technical expertise can also understand it to make business decisions. Data professionals aren’t required because BI tools can perform visualization of data points. Comparatively, BA requires more work since it is difficult for professionals without technical knowledge to get useful insights and interpret them.
- The purpose of BI is mainly to provide information in the form of charts, reports, or dashboards that are easy to understand. In the case of BA, it isn’t just reporting. The information is analyzed and processed further to understand the “why” behind it.
- In BI, data is consumed in the same format to gain insights whereas, in BA, existing data is broken down or transformed into different elements, which are studied as a whole to derive meaningful insights.
- There are certain limitations in BI such as dealing with semi-structured or unstructured data. If data has huge irrelevant information and doesn’t fit into a pre-planned model, it is called unstructured data. A standardized tool cannot be used to access or translate unstructured data, making it difficult. In BA, this isn’t a problem because analysts can create or convert data into useful insights.
- As compared to BI, BA is more important for the decision-making process of an organization. Analysts are responsible for predicting market fluctuations and incoming challenges. Using predictive analytics, meaningful insights can be derived, which can help a company make a decision that best suits them.
- The set of tools used in BI include technologies like MicroStrategy, online analytical tools whereas in BA, the tools used need to be flexible and technological and are also more mathematically advanced, due to processes like statistical analysis and machine learning being involved. Sometimes, tools like Microsoft Power BI, Tableau, and Qlik are used for both BI and BA.
- BI is about helping organizations stay afloat currently, whereas BA is to bring changes in a business model for a company to be successful.
- BI is more suitable for almost any enterprise, especially if they are looking to manage and enhance their operations whereas BA is more suitable for organizations that want to change their business model.
It depends on various factors, whether an organization needs business intelligence or business analytics. If they want real-time reporting, business intelligence is the best option. If they’re looking to make major changes in their system, business analytics is more suitable.
Depending on your training and position, a career in business analytics or business intelligence can have a great outcome. You will require education and training in tools and technologies to begin your career. If you are looking to start your career as a business analyst or a business intelligence professional, you need to acquire different skills such as data preparation, mining, statistical analysis, data visualization, and reporting.