Often times, you’ll hear the phrases “business analytics” and “business intelligence” used interchangeably. While they are certainly related in many aspects, they actually serve different functions. Business analytics (or BA for short) often uses business intelligence (BI) as the foundation when complicated questions need to be answered or complex forecasting needs to be made.

Both BA and BI fall under an all-encompassing “data analytics” umbrella. Although they come from the same idea, they offer businesses different elements; understanding how each of these tools works can impact your analytics strategy. If you want to make the most of your data, it’s important to understand how BA and BI perform differently. Once you have an understanding of how they work separately, you can strategize to make sure they’re operating in tandem, as well.

Current Events vs. Future Forecasting

The main difference between BI and BA is the focus on where the events are occurring. If you want to look at data that’s been captured from past events, you’ll need to use business intelligence. BI also looks at current data and trends. BA, on the other hand, generally focuses on what’s most likely to happen in the future. In the end, the two options are usually using the same data, but that information is being used in different ways with varying timelines.

This can be summed up quite simply:

  • Business intelligence answers the question, “What is happening now and why?”
  • Business analytics answers the question, “What’s likely to happen next?”

With BI, you’re using data that can be actionable in the present moment. BA helps you form strategies that will impact your future operations.

Descriptive vs. Predictive

When we’re talking about BI, we’re referencing information that’s designed to tell you:

  • What has happened in the past
  • What is happening now
  • Reasons why these events have or are occurring

In other words, business intelligence is descriptive.

BA, conversely, is predictive. It finds patterns and trends in your business analytics data that suggest how current activity could potentially impact future operations. The end goal is to forecast what’s going to happen based on data already gathered from past and current events.

Managers vs. Analysts

There’s generally a pretty big difference between end users of this type of data, too.

Business intelligence data is usually useful for marketers, accountants, and managers who don’t have technical expertise because it produces visually appealing results that are generated automatically within the BI tool. A few basic math calculations are performed by the software to query results. Machine learning and artificial intelligence come into the picture when it’s time to make projections.

Business analytics tend to require a higher data-mining skillset, as there’s more work needed to parse out the information that’s useful and interpret what it means. Often, it requires a person who’s had data analysis training.

Reporting vs. Applying

Business intelligence offers a simplified approach to reviewing data and information. All the necessary output is configured into easy-to-read reports, dashboards, and charts so the end user can see exactly what’s happening within the firm.

Business analytics is much more than just reporting. It uses data applications and statistical analysis to examine trends and determine why events are occurring.

New Analytics Strategies vs. Existing Analytics Strategies

The implementation of a solid business intelligence strategy is a great first step into the world of data and analytics. It’ll help you understand how to gather, store, and structure your information.

Once you have a handle on what BI is telling you, you can dive deeper into predictive business analytics. To put it another way, it’s a good idea to have a firm handle on BI before you explore BA.

BI is often used as the basis for BA. The data that’s stored and collected for your BI analysis can then be transferred to your BA system later on for predictive, more in-depth and future-focused strategizing.

In the End

Both BI and BA have their places in the business world. Each function gives leaders and employees the ability to examine data so they can make more informed decisions that impact their companies. Before you invest in a product, you should figure out if you’re trying to look at current or future strategies, and you need to know if you have a team of people on hand who can handle the deeper dives into data that BA requires.

The best strategy? Start with business intelligence so you can lay the groundwork for a solid data foundation. From there, you can work towards improving efficiency and revenue generation with future projections offered by BA.

Implementation, integration, training, and more, we provide you with the tools, technology, and know-how to leverage business intelligence software like Power BI now and in the future.

Need help getting started? Reach out to our team at MIBAR today!

Additional Business Intelligence Resources

How Not Using BI May Be Costing Your Business

Why Your Organization Needs Business Intelligence This Year

Collaboration in Business Intelligence: A Team Approach to Growth