Data is incredibly powerful. A string of numbers on a financial report could signify fortune or ruin. But how do you know which datapoints are important? Business intelligence (BI) and business analytics (BA) systems can help you cut through the white noise and identify the data that truly matters.
However, understanding how and when to use BI or BA can be a challenge. These systems are often confused with each other, even though they play very different roles in your organization. To understand how to incorporate these systems into your business plan, you need to consider what they can do for your company and how to maximize their benefits.
Business Intelligence vs. Business Analytics: Are They the Same Thing?
Many business leaders use the terms business intelligence and business analytics interchangeably. However, this isn’t really accurate. There are a number of significant differences between BI and BA; although they’re closely related to each other, they play separate roles. Understanding how these systems differ will help you choose the right option for your department’s needs.
- Business Intelligence (or BI) is a system of technologies that help you draft data reports and track operational efficiency on a daily basis. You use historical data to identify operational inefficiencies and remedy them. Pivot tables, executive dashboards, and management reports are all part of a BI system—chances are, you already have some type of BI system in place already.
- Business Analytics (or BA) is a much broader system of tools emphasizing statistical analysis and predictive modeling. In other words, it goes above and beyond generating management reports, offering you valuable insight into why this data is so important. A BA system uses data to help you decide where your company should be headed. It is the difference between being active and reactive.
If you’re creating a financial report for an upcoming shareholder presentation, you’re using a BI system to make your report. But if you analyze the information from this report using statistical analysis or predictive modeling, then you’re using a BA system to look at the bigger picture. In this sense, BI is just one small part of a larger BA system. Most successful companies use both in tandem to get the most benefit.
Business Intelligence Streamlines Your Operations
Why is BI so important for your company? In short, it allows you to pivot quickly and adapt to any new situation. Stagnation is the enemy of good business. For example, if your operational protocols haven’t been changed in years, you might miss out on a few key areas of improvement that you can make to boost your employees’ productivity.
Even if you already have a BI system in place, it needs to evolve alongside your company. When you analyze the state of your BI and make improvements to it, you’ll see the following benefits:
- Hold staff accountable—you’ll use real-time data to identify top performers and retrain your company’s worst performers
- Immediately identify errors in your accounting; invoices won’t slip through the cracks
- Locate any missing stock before you receive a massive order from a client that you can’t fulfill
- Share information with your company quickly—effective BI systems make drafting reports a simple process, and as a result, you may make and share these reports more often
- Determine whether you’re fully supporting all of your customers throughout the buying process
- Noting how much time, on average, it takes your customer to move through the sales funnel
When you combine an effective BI system with in-depth business analytics, you will see even more benefits. You will have the information you need to improve daily operations now, and to make wise decisions in the future.
Business Analytics Leads to True Innovation
One challenge that CEOs, managers, and financial reporters face is that in-depth data analysis, while valuable, is also time-consuming. For this reason, many corporate leaders feel as if they need to choose between reactive business intelligence and proactive business analytics. Using BA for planning is great, if you can find the time to plan and buy-in from the right decision-makers to see your plan through. By comparison, reporting needs are real and constant. Depending on the urgent project of the moment, “We need to know where our organization stands” may take precedence over “How will we reach our strategic goals?”
Faced with that comparison, some might track data in real time to keep operations running smoothly and ignore predictive analysis entirely. This is a mistake. Business analytics is just as, if not more, important than business intelligence, and most companies need both to achieve the greatest success. When you have an effective business analytics system in place, you’ll experience the following benefits:
- Find hidden patterns in big data through data mining
- Predict and test the results of future decisions before you implement them
- Test the effectiveness of your past decisions and decide whether they’re worth keeping
- Understand what led to your past successes, allowing you to repeat them
- Automate certain decisions to save CEOs and managers time
- Compare your results to competitors
- Identify consumer trends and offer services in response to changing cultural tides
Implementing a BA system doesn’t have to be time-consuming, either. When you hire an experienced IT firm to handle every detail for you, you’ll see all of these benefits with very little effort.
How to Balance Business Intelligence vs. Business Analytics
To create a system based on both BI and BA principles, start by hiring the right information technology services provider for the job. A skilled Data Analytics will create your BI system from scratch based on the specific data that matters most in your industry. You don’t even need in-house IT staff—you can hire an outside team to gather data for you, saving you time. Contracting with a top-notch Data Analytics services provider means that you won’t have to read résumés, train IT personnel, or manage their schedules. The right Data Analytics team can also store your data securely in a data warehouse, where you can access it virtually whenever you need to generate new reports. There’s no risk of losing your data in the process.
Another benefit of hiring Data Analytics team is that they can effectively blend your BI system into an efficient BA system. They can use the data they gather to not only generate reports in real time but also to draw meaningful conclusions from this data. At Tek Leaders, we use a flexible SaaS/Cloud platform with advanced predictive analytic capabilities to find hidden patterns in your data and offer you insights or suggestions on the best steps to take moving forward. The data becomes actionable, not just reactionary. Even if you’re short on time and don’t have an Data Analytics team at your disposal, with our help, you can make the most out of your data and meet all of your department’s needs, be they BI, BA, or both.
If you’re ready to improve your business intelligence or business analytics system, contact Tek Leaders today. Our experienced IT services team will find custom solutions for your industry’s specific needs, including powerful data analytics tools and detailed business intelligence strategies. Or, if you have more questions about our process, you can reach us by email or call us at (214) 504-1600 directly.