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Business Intelligence vs Business Analytics

Business Intelligence (BI) and Business Analytics (BA) are both used to interpret business information and create data-based action plans. The two terms are frequently used interchangeably, and many people consider one to be a subset of the other (there's some disagreement about whether BI is a subset of BA, or BA is a subset of BI). However,  it might be more accurate to describe them as two arms of successful business planning: BI tells you the current state of operations, while BA focuses on future trends.

Deciphering Trends

Business Intelligence uncovers past and present patterns and trends, using that information to make better decisions for day-to-day business operations. On the other hand, Business Analytics (which Harvard Business School calls "...a newer, trendier term than business intelligence") uses data mining, statistical analysis, and predictive modeling to predict future patterns.

Types of Questions Answered

Business Intelligence answers questions like:

  • "What has happened in the past?"
  • "What is happening right now?"
  • "How can we stay focused on our current target?"
  • "What do our current customers look like?"

It can tell you what is working, and what isn't working. BI is the person at the meeting table, informing you of the current state of operations. They are the person armed with a collection of facts and figures in the guise of descriptive statistics: bar graphs, pie charts and the like.

Use business intelligence if:

  • Your goal is to make fast, data-driven decisions about the present situation,
  • You want to produce informative reports about your current status.
  • You are a small company, lacking staff with a data science background.
  • You want insight into employee performance or organizational performance.
  • You want to improve workflow or reduce operating costs.


Business Analytics answers very different questions:

  • "What is the probability that this will happen in the future?"
  • "What are our future customers doing?"

Your BA doesn't care much about the current state of operations; they are more concerned with what's going to happen in the future. Your BA guy might have a chart or two showing where your bottom line is likely headed, but they are more concerned with predictive analytics: the outcomes from data mining, machine learning and similar tools.

Use business analytics if:

  • You have access to big data, and want a competitive edge.
  • You want to predict where your company is headed.
  •  You're looking to change or improve current operations with a view to the future.

Technical Know How

Your business intelligence specialist has in depth knowledge about current business operations. Their technical know-how includes business activity monitoring software, reporting software, and spreadsheets.  Positions include project managers, consultants, and business intelligence analysts. Where an overlap with BA typically happens is that a BI sometimes uses tools more often associated with BA, including predictive and statistical tools.

The more scientific arm is the business analyst. Business analysts use a variety of tools, including correlational analysis, regression analysis, and text mining. The area includes a wide range of technical positions, including database administrator, database developer, data scientist, and data engineer.

References

What’s the Difference Between Business Intelligence and Business An...

Business Intelligence vs. Business Analytics

Business Intelligence or Business Analytics

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Comment by Alex Blyakhman on January 19, 2020 at 10:36am

Hello Vincent, there seems to be no conflict here - was it Albert Einstein who said that "The greatest scientists are artists as well."? Based on this premise alone, you must be a very exceptional scientist... Your work on DSC is surely a great testament to this finding.

Comment by Alex Blyakhman on January 19, 2020 at 10:27am

Thanks, Stephanie, this is a great analogy!

Mathematics is controversial; while it is a subset of science in a broader  sense of being "systematized knowledge", some titans like Richard Feynman reportedly argued that "... [mathematics] is not a nature science The test of validity is not experiment."

Perhaps it's safer to use examples of physics, chemistry and biology being branches of science. While NASA employs astrophysicists, chemists, and biologists, (in addition to other scientists); yet to your point some of their projects employ specialists on as needed basis, and they don't always work on the project together.

My thought is that similarly, a business entity embarking on a business analytics project might tap into professionals from various areas of this broad field, and some of such projects might (or might not) include business intelligence practitioners.

In other words, I wasn't trying to break the rules of inference: "Yes, all business intelligence professionals are considered to be business analytics professionals, but not all business analytics professionals can in fact perform business intelligence tasks, as they could possess other skills, outside of the scope of business intelligence."

Comment by Vincent Granville on January 18, 2020 at 7:46am

Part of me is mathematician. But I think of me as an artist more so than a scientist. But it's just me, I guess. 

Comment by Stephanie Glen on January 18, 2020 at 5:58am

Alex,

Well, yes...and no. You could argue that BI is a subset of BA, but...Mathematics is also a subset of science.

If you were looking to hire a mathematician, you wouldn't hire someone with a general science degree and hope for the best. While it's true all scientists have a good grasp of math, they aren't mathematicians. The reverse is also true: mathematicians are not scientists (even though, technically, you could argue that they are).

I think it's important to differentiate the two to help businesses hire the right person and for prospective job seekers get the right degree.

Comment by Alex Blyakhman on January 13, 2020 at 12:25pm

Thank you for sharing your thoughts, Stephanie!

I fall into the BI being a subset of BA camp. Some of the definitions of Business Analytics include: Descriptive, Diagnostic, Predictive, and Prescriptive. Traditional Business Intelligence usually summarize historical performance [Descriptive Analytics] and sometimes help find business drivers for the performance observed [Diagnostic Analytics.] More importantly BI helps democratize data access by making it available via data warehouse builds and possibly using data visualization software.Some of the BI packages, such as Tableau, also delve into Predictive Analytics by using statistical modeling to forecast future results. Finally, BA attempts to answer the most important question when it comes to using data - the "So What" question, helping prescribe next steps for the business.

What are your thoughts on this?

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