There is a good deal of overlap between business intelligence and analytics, so it’s forgivable that the two terms are often used interchangeably and that it can be hard to find consensus on what exactly each means. It seems that almost everyone uses the phrases differently, with a great number of businesses and vendors using "BI" to encompass both. But to be able to properly implement and get the most out of either, it’s worth understanding how they differ, how they work together and the values each has to offer a business.
Business Intelligence is the broad umbrella term that expresses the full scope of using data to inform business decisions. Using a BI methodology, a business can transform raw data into meaningful information.
Benefits of implementing a BI programme can include:
- Better (and possibly faster) decision making
- Increased efficiency
- Streamlined internal processes
- Identifying and driving new revenue streams
- Identifying opportunities for competitive advantage
- Identifying issues that require attention or further investigation
“BI” is often used to describe the process of learning from collected data, after it has been analysed, and turning models and forecasts into broad business understanding, but it can also be used to refer to the tools (including plans and strategies) used during the decision making process.
Where BI is a process used to reach business decisions, analytics is the data science that informs those decisions.
BA encompasses a variety of different analytic disciplines:
- Drilling down into the data through diagnostic analytics will tell you why things are happening
- Examining and using predictive analytics will help you to predict what will happen in the future
- Exploring your data through data mining will help you uncover new patterns and relationships.
A/B or multivariate testing is also often included in the BA process – testing previous decisions and seeking to understand their outcomes.It would make for an ugly sentence, but you could say that business analytics is a verb, while BI is a noun. Business intelligence is a discipline, but BA is something you do – the act of using your relevant tools and services to obtain new insight. You implement a BI initiative; you perform business analytics.
So, which Do I need?
Both. Analysing your data is the only way to understand the meaning behind it, to properly use insight from it to inform business decision-making, and to begin to make accurate predictions about future trends. You need that analytic phase in which questions are asked to arrive at the point where you are able to use BI to make decisions.
Both business intelligence and analytics are key elements of Customer Experience (CX). To see all of the elements that make up the full CX scope, download our Periodic Table of Customer Experience.