Business Intelligence vs Business Analytics: Which Platform is Right for Your Organization
There is no denying that businesses generate a massive amount of data every day. It is critical to use digital tools and solutions to transform your data into actionable insights in order to make better business decisions, identify problems, and maintain profitability. While there are many options, Business Intelligence and Business Analytics are the two most commonly used data management solutions for gathering, analysing, and displaying key business information. Organizations gain valuable insights into industry trends and enable a strategic decision-making approach by utilising these two digital solutions. Here are some statistics demonstrating the growing use of Business Intelligence and Business Analytics:
According to Statista, the market for business intelligence and analytics software applications is expected to grow from 14.9 billion US dollars in 2015.
According to a Forbes survey, 48% of organisations consider cloud BI to be "critical" or "very important" to their operations.
According to PR News Wire, due to the presence of key industry players in the region, North America is expected to have the largest business intelligence and analytics market share.
Now that we've seen some key statistics about BI and BA, let's dig deeper and learn how and why Business Analytics and Business Intelligence solutions are important for your organisation. Let us also distinguish between Business Analytics and Business Intelligence to determine which solution is more suitable for your organisation.
What exactly is Business Intelligence?
Business intelligence (BI) is a technology that allows businesses to organise, analyse, and report on their data.
BI generates reports, performance metrics, and company trends to assist businesses in making informed decisions in the present. It is primarily used to generate a detailed overview of business or product metrics.
Here are some real-world examples of how BI is helping businesses all over the world:
Intelligence in Business
Business Intelligence is used by the company to determine several key aspects of its operations. For example, Uber employs BI for surge pricing. Algorithms continuously monitor travel time, traffic conditions, and customer demand. As a result, prices adjust as demand rises and traffic patterns change.
Netflix makes use of data in a variety of ways. One example is how the company suggests programmes to users based on previous viewings.
3. Coca-Cola Bottling Corporation
Coca-Cola previously experienced difficulties with its daily manual reporting processes. However, by replacing the process with an automated BI system, the company was able to completely streamline it and save 260 hours per year. With a few clicks, the company can now quickly check metrics related to budget, delivery, and profitability.
4. Lowe's Corporation
The home improvement company was among the first to use BI tools. This technology has been used to optimise their supply chain, analyse products to detect potential fraud, and solve problems.
5. American Express
American Express has been using business intelligence to create new payment service products and market them to customers. BI also assists the company in detecting financial fraud and protecting customers whose cards have been compromised. What exactly is Business Analytics?
Business Analytics (BA) is the process of interpreting and analysing historical data in order to identify trends and patterns in a business. BA assists businesses in improving or changing their current operations and making better decisions for the future. It can be used to identify market opportunities, improve customer relationships, and better identify potential risks. Let's look at some real-world examples to better understand this:
1. Microsoft Inc.
When Microsoft's engineering groups relocated in 2015, they turned to Business Analytics. Microsoft's Workplace Analytics team hypothesised that reducing the 1,200-person group's location from five to four buildings would improve collaboration by reducing the number of employees per building and the distance that staff needed to travel for meetings.
Starbucks No. 2
Starbucks employs BA to forecast which purchases and offers customers are likely to be interested in. Using BA tools, the company can identify patterns in a customer's purchases and then recommend offers via mobile devices.
Amazon, the most popular on-demand app, has used Business Analytics successfully to personalise product recommendations and make logistical business decisions. Because of extensive data analysis, Amazon's massive supply chain runs smoothly. Learn how much it costs to create a marketplace app. Now that we understand the differences between Business Analytics and Business Intelligence, let us proceed to the next section of this article, where we will compare BI and BA to determine which is a better fit for your organisation.
Comparison of Business Intelligence and Business Analytics
Business leaders must conduct a comparative analysis of these solutions when deciding between Business Intelligence and Business Analytics. Here are a few comparison points to help you choose the best solution for your company.
Business Analytics vs. Business Intelligence
1. Present vs. Future Focus: Business intelligence makes decisions about how a company should run in the present based on past and current data. Business Analytics, on the other hand, employs historical data to forecast what might occur in the future or how an organisation can proceed. A current focus using BI is generally more useful for entrepreneurs who are happy with their current business operations but want to identify "pain points," increase productivity, and streamline operations.
2. Reporting and Analysis: The primary goal of business intelligence is to collect and report on relevant data. Instead, the trend in analytics has been to provide people with the tools to find their own answers. BA allows users to immerse themselves in analysis, explore their data, and pose their own questions.
3. Maintaining vs. Revolutionizing: BI is required to run the business, whereas BA is required to drive change.
BI focuses on increasing operational efficiency through real-time data, allowing individuals to perform their job functions more effectively. BI also includes historical data analysis from multiple sources, allowing for problem identification and resolution.
Business analytics is the study of historical data in order to identify trends and comprehend information that can drive business change.
4. Decision Making Ease: Large-scale businesses rely almost entirely on a skilled team of analysts who can forecast challenges or market fluctuations. While business intelligence tools allow an analyst to access all information, translating this intelligence into a useful resource is impossible without analytics. Based on historical data and current business functionality, business analytics can help identify growth patterns, economic shifts, and future market trends. So, when it comes to making major decisions, the analytical perspective is critical because it not only tells you about an enterprise's current state but also can see ahead.
5. Applications: Most businesses rely on business intelligence to run their day-to-day operations.
Business Analytics is appropriate for companies that prioritise future growth and productivity. BA provides the tools you need to process data, answer why questions, and create future actionable items. Business analytics can be used in all areas of a company. It can be used in marketing, finance, CRM, HR management, and even manufacturing.
Business Benefits of BI and BA
Businesses can use business intelligence to stay competitive and maximise revenue streams.
The advantages that BI provides to organisations:
Improves business operations: BI users have greater control over their operations. They are more aware of what is going on in the company. Maintaining active oversight of processes and standard operating procedures aids in the quick correction of any errors. For example, a logistics company can use BI to deal with late deliveries and determine why they occur. This type of knowledge in their operations could greatly improve their services. Valuable customer insights: Businesses can better understand their customers by analysing their purchasing habits and creating user profiles using effective analytics.
Many businesses are looking for custom software development solutions to help them with business intelligence systems and management. This enables them to provide better products and experiences to their customers.
Increased productivity: One of the most significant advantages of Business Intelligence tools is the automation of processes such as report generation and real-time updating. As a result, employees can concentrate on more productive tasks.
Increased revenue: Data from BI tools can assist businesses in identifying sales weaknesses and other issues. Revenue is more likely to increase when organisations listen to their customers, monitor their competitors, and improve their operations.
Competitive advantage is another significant benefit of implementing a BI solution. Companies can use a business intelligence platform to see what their competitors are up to. Business analytics can assist organisations in improving overall efficiency as well as mitigating and identifying potential risks. Consider the following key advantages of Business Analytics:
Keeps businesses on budget: Most startups and small businesses have limited marketing budgets. The use of Business Analytics allows you to make the most of every dollar by better understanding your customers, anticipating their ever-changing needs, and bringing innovative solutions to the market.
Enterprises can use business analytics to make informed business decisions and minimise financial losses. Predictive analytics can help businesses close gaps and respond to changes. Businesses, for example, can simulate changes to pricing or product offerings to see how they affect customer demand. After collecting sales data on the modified products, businesses can Use business analytics tools to determine the success of the changes and whether they should be implemented across the organisation.
Increased efficiency: Businesses can now collect data at breakneck speed. You can identify any breakdown in the process or performance using business analytics in almost real-time, saving time, money, and resources.
Business owners use BA to monitor customer behaviour, changes in customer needs, and market shifts. This data assists you in staying on top of things and making dynamic changes when and if supporting data indicates it's time.
Determine your company's BI and BA requirements.
If you are happy with your current business model and simply want to improve operations, increase efficiency, and meet organisational goals, BI may be the best solution for you. BA, on the other hand, may be the best option if you want to change your business processes – or even your entire business model – but lack the necessary insights. To improve efficiency and generate more revenue, it is preferable to begin with BI and then progress to BA. In short, business analytics and business intelligence solutions can assist you in taking your company to the next level.