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February 13, 20183 min read

Business Intelligence and Business Analytics: Understand the Two

Often, people confuse business intelligence for simple business analytics or vice versa. But, what is wrong in that? Are not business intelligence (BI) and business analytics (BA) the same thing? If you think like that, then you have got things all wrong.

While both use data analysis to increase the efficiency and viability of a business, business intelligence and business analytics are two entirely different things. So, what is it that makes them different from one another? To help you understand this, we are going to first look at both business intelligence and business analytics individually and then compare the two for differences.

Understanding Business Intelligence (BI)

Most business owners/managers know about business intelligence, but only a few make the effort to truly understand what it is and why it should be considered. Today, information is power for a business. However, there is so much that finding the right information in a timely manner is difficult. This is where business intelligence can help.

business intelligence

By making it easier for them to track, process, store and analyze data and then transform it into insights, business intelligence helps businesses to improve their decision making. Using the insights acquired through business intelligence, businesses can cut costs, identify new business opportunities and improve their overall performance. Unfortunately, many businesses have not yet warmed up to the idea of leveraging business intelligence —primarily due to a lack of awareness about the power of BI and its benefits. The fact of the matter is that BI should be an integral component of every business’ operation.

The practices, tools, applications and technologies that gather, consolidate, analyze and display the raw data of an organization to create insightful and actionable business information is referred to as business intelligence. Several related activities make up the BI process. They include:

  • Online analytical processing
  • Querying
  • Reporting
  • Data mining

Let’s look into it in detail.

The Purpose of Using Business Intelligence

With the BI term and process understood, it is time to look at the reasons businesses employ business intelligence tools in their operations. Following are some of the reasons businesses use BI:

  • Identifying market trends
  • Speeding-up and improving decision making
  • Increasing operational efficiency
  • Driving new revenues
  • Optimizing internal business processes
  • Spotting business problems that need attention
  • Gaining a competitive advantage

Understanding Business Analytics (BA)

As they help understand target audiences and customer preferences, valuable data and insights are required by every business. With the right data, businesses can anticipate their needs and achieve the set goals. However, the available data must be analyzed appropriately and this is where business analytics can help. So, what is business analytics and how can it help your business?

business analytics

Today, businesses are under immense pressure to increase efficiency and improve results. The good news is that businesses have a plethora of valuable data available to them. However, you must sort and analyze this data to get any benefit from it and this is something business analytics can help you with. The approaches and technologies used to access and explore the data of a business to gain useful insights that improve business planning and enhance future performance is referred to as business analytics. There are three levels at which business analytics operates. They include:

  • Descriptive—Where data is reviewed
  • Predictive—Where data is run through models or algorithms
  • Prescriptive—where hypothetical outcomes for various courses of actions are determined

With business analytics, businesses can get deeper insights into their organizational needs and customer preferences. By making vital information transparent and easily understandable, business analytics helps create value and competitive advantage for a business.

The Purpose of Using Business Analytics

Business analytics can help your business to achieve a lot. However, following are the biggest reasons to use it:

  • Maximize customer value—identify your repeat customer to optimize your marketing investment
  • Improve service—Better predict your ability to fulfill customer demands to improve the performance of your service
  • Identify emerging trends—Spot new and emerging market trends to introduce products/services that help you gain a competitive advantage


By now, the difference between the two should be clear. While business intelligence optimizes the present for current success by utilizing historical and current data, business analytics prepares businesses for the future by utilizing historical records and analyzing the present.

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