Business intelligence and business analytics are tools used to study and analyze past and present data to augment decision making. Business intelligence gathers, integrates, analyzes, and interprets past and present data by identifying what and how it happened and the effects on the business. This data consists of external market data and internal organization data. Business analytics is an advanced form of business intelligence that thoroughly examines past data to come with explanations that can be used to make future predictions about business operations and outcomes (Mashingaidze & Backhouse, 2017). Such is through identification and examination of insights and trends that can be used to create predictive models.
Business intelligence tools use available data to explain the current state of business and inform a business’ strategic and tactical decisions. It is concerned with measuring and tracking key performance indicators to understand the business (Master’s in data science, 2019). Business analytics is that part of business intelligence that uses statistical solutions. It produces data in visualized and analytical findings that inform on hidden aspects such as relationships, outliers, emerging trends, and subtle patterns that can predict strategic and tactical decisions. It can automate and optimize processes and gain a competitive advantage (Nerka, 2016). It informs on changes by providing insights into outcomes of proposed decisions which can inform recommendations to improve the business and solve problems. Business analytic tools could also suggest which data variables to add, modify, or remove to gain new insights.
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The main components of data analytics include data mining, predictive analytics, and forecasting. Data mining involves the use of data from unknown trends and patterns; predictive analytics leverages the analyzed data to create predictive models, while forecasting determines the best outcomes of decisions or processes followed.
Table 1.0
Differences between Business Intelligence and Business Analytics
|
Business Intelligence |
Business Analytics |
| Deals with how and what happened | Deals with why it happened |
| Is descriptive of the performance of the business | Is predictive of the outcomes of decisions and policies through trends and insights |
| Takes into account key performance indicators to explain current business operations | Uses statistical tools and technologies to model expected outcomes of business operations |
| Explains the decisions being made | Offers recommendations for implementing change and problem solving |
| Does not provide the basis for changes that can lead to competitive advantage | Can be used to gain a competitive advantage by predicting outcomes of crucial changes |
References
Mashingaidze, K., & Backhouse, J. (2017). The relationships between definitions of big data, business intelligence and business analytics: A literature review. International Journal of Business Information Systems , 26 (4), 488. https://doi.org/10.1504/ijbis.2017.10008185
Nerkar, A. D. (2016). Business Analytics (BA): Core of Business Intelligence (BI). The International Journal of Advanced Engineering, Management and Science, 2 (12), 2176-2178. https://www.neliti.com/publications/239736/business-analytics-ba-core-of-business-intelligence-bi
What is business analytics? (2019, May 16). Master's in Data Science. https://www.mastersindatascience.org/resources/what-is-business-analytics/
