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Business Intelligence vs. Business Analytics: What’s the Difference?

November 20, 2018

Technology

Both business intelligence (BI) and business analytics (BA) are commonly used as a catch-all terms to describe the exploration and use of data, but what distinguishes them?

If you imagine a continuum from descriptive, looking at the past, to predictive, anticipating the future, business intelligence would be on the descriptive side, as it describes the analysis of historical data to find trends and visualize change. Business analytics would be closer to the predictive side, using historical results to project future expectations, while artificial intelligence can go a step further to actually developing recommended actions based on your historical data.

Business Intelligence Describes the Past

But it’s business intelligence that lays the basis for more advanced (and automated) data analysis functionality – the first step toward transforming inert data silos into actionable intelligence. Effective BI pulls your data to build dynamic visualizations of behaviors, patterns, and preferences. This serves the purpose of identifying the key performance indicators (KPIs) that organizations use as metrics of performance over time. With these KPIs, you get descriptive analytics, or results that illustrate historical changes in sales, engagement, or other activities. This sort of data insight provides a diagnostic assessment, guiding direction to strategies and informing decision-makers. However, the most effective BI must be accessible by the staff who need it so data-driven insights can empower and inform decision-makers throughout an organization.

Business Analytics Predicts the Future

You might consider BI the gateway to BA, since BA builds upon the established patterns and trends – or the answers – that BI identifies. BA aims to be predictive of the future by reporting BI findings, visualizing data, utilizing statistical analysis, and providing predictive modeling and analytics. By reporting BI insights in a digestible manner, BA makes data even more accessible to staff. It also serves as a roadmap by including predictive analytics derived from BI reports.

As with BI solutions, one of the best ways to leverage BA is to have self-service options available so individual staff members are able to access data insights. The key difference between the two are the statistical analysis capabilities of BA.

Read our guide for a deeper look into the functions and capabilities of data analytics.

Be sure to look out for our next blog about how artificial intelligence is taking business analytics a step further.