What is business intelligence and analytics? And how does business analytics fit in? Such questions can cause sleepless nights when tasked with acquiring a business intelligence (BI) software solution for your organization.
This article explains these terms and provides tips on choosing the best BI software.
- What Is Business Intelligence?
- What Is Business Analytics?
- Benefits
- Comparison
- How to Choose the Best Software
- Next Steps
What Is Business Intelligence?
Business intelligence is the practice of deriving useful information from data by collecting and analyzing it using specific tools, techniques and technologies. Business intelligence is also how we refer to the gathered information.
All data isn’t business intelligence. It should be timely, accurate, high-value and actionable.
Managing daily operations and tracking performance, including the competition, is all thanks to BI. It’s born of the need to store data, so retrieving it is easy. It makes BI invaluable for enterprise reporting and analytics.
BI is never an isolated process. Customer-facing systems like eCommerce, payment processing, billing and POS systems feed into your BI systems.
On the other hand, your in-house systems like ERP, HR, inventory, project and supply chain management platforms are excellent sources of organizational business intelligence and analytics.
Storing this information is business-critical, and data warehouses and databases address this need.
John Meyers, Director and Group Lead at Stealth Hospitality, sums up business analytics vs. business intelligence in real-life terms.
I generally ask [people choosing between BI and BA], “So what are you thinking of, are you looking at the differences between a more traditional approach — reporting, summing, grouping, things of that nature— or…analytics where you are able to use statistical methods to find new and exciting information within your data?”
The above quote says it all — business analytics is about discovering new insights. Here’s the formal definition that tells you why it’s essential.
Back your IT Investment Up with Market Data
What Is Business Analytics?
Business analytics is the practice of improving organizational performance with data analytics tools and techniques. It involves understanding internal processes and performance while factoring in the business roadmap.
- Are projects on time, or is there a delay?
- What caused it, and how can you get back on track?
- What does the budget look like for the next year?
- What projects can you take up next? Are the necessary resources available?
Business analytics answer such questions.
Business analytics techniques include data mining, aggregation, data visualization and predictive analytics.
What-if analysis of shipping costs for various delivery modes in Oracle Analytics. Source
- Business analytics goes beyond surface-level insights to understand the why behind events. Why did sales drop?
- What were the causative factors for the recent marketing campaign’s success? Besides damage control, it’s also about emulating successful initiatives that can add to success.
The business intelligence vs. business analytics comparison is incomplete without understanding where they stand relative to each other and related disciplines.
- Business intelligence is the umbrella term for business analytics, embedded analytics, big data analytics and enterprise reporting.
- Data analytics is a subset of BI but a superset of business analytics. Think concentric circles — BI > data analytics > business analytics. Read our business analytics vs. data analytics article to learn more.
- Predictive and prescriptive analytics are data analytics techniques to forecast what can happen and consider possible action paths.
Here’s what you stand to gain with business intelligence analytics.
Benefits
Statista predicts the BI software market revenue will grow annually by 5.83% in the 2023-2028 period. The demand for BI and analytics is increasing due to digitization and online data availability.
Business intelligence applications include managing supply chains, handling transportation and logistics, and performing financial planning and analysis (FP&A).
Healthcare providers rely on BI for patient management and operations. Source
- Analyze Metrics and Strategize: Track sales, marketing, HR and workforce metrics with planned and ad hoc reporting, and incorporate these insights into long-term strategy.
- Streamline the Supply Chain: Manage orders, payments, suppliers and delivery schedules from procurement to inventory and warehouse management.
- Uncover Buyer Trends: Stay aware of what’s trending with consumer analytics and include this information when planning customer outreach.
- Use Just-In-Time Manufacturing: Plan production with market insight and demand and supply forecasts.
- Assess Your Liabilities: Approve loans by vetting applicants, and offer personalized financial benefits like loyalty programs based on previous buyer interactions.
- Streamline Healthcare: Manage electronic health records, billing and insurance providers. Design revenue-boosting strategies while sustaining efficient medical care facilities and internal operations.
- Perform FP&A: Get real-time financial and operational data, manage cash flow and risks, and track how performance varies from earlier projections. Create budgets and allocate resources based on previous spending and performance.
Read our Top Benefits of Business Intelligence article to learn more.
Comparison
Business intelligence and descriptive analytics are the same — both are about basing action on data. Your website is getting fewer visitors. What’s the next step?
Business analytics involves studying the impact of events on business processes. It has an eye toward improvement and preparation for change.
It’s a continuous cycle of gathering information, analyzing it and feeding the inputs back into the system to start over again.
Business analytics and business intelligence solutions include dashboards, data visualization, statistical, spreadsheet, project planning and documentation tools.
They can be standalone tools that you fit into your software stack or full-fledged business suites that handle the above mentioned and more business analytics tasks.
What do your stakeholders expect from the new software platform? Understanding their requirements entails knowing your business and its infrastructure.
The best software in the market might not be the best fit for your business, and following a systematic approach can help you get your money’s worth.
How to Choose the Best Software
Start by assessing your business needs.
- Who will use the software, and what’s their skill level?
- What gaps do you seek to address with the new system?
- How far are you willing to stretch your budget for the desired functionality? Which tradeoffs are you ready to make?
Read our Business Intelligence Features article to determine your must-have and nice-to-have BI features.
- Automation, self-service BI, interactive visualizations and automatic data refresh facilitate independent BI and analytics tasks.
- Is geospatial analytics a deal-breaker? Does your business need location insights?
- Consider business intelligence and analytics suites from market leaders like Oracle, SAP and IBM if advanced statistical functions and machine learning are business-critical.
Additionally, there are many free and open-source BI software on the market.
- Open-source software allows you to customize and extend your application by integrating it with your preferred platforms.
- Free BI software serves as an introduction to the flagship product — you might want to upgrade if it works out.
- Freemium solutions are worth considering — basic functionality is free, while additional features come at a price.
Choosing software is confusing in a market teeming with BI and analytics products. Payment models include one-time cost, subscription-based and usage-based pricing. Consider their pros and cons carefully before deciding.
Create a requirements checklist to outline your business needs.
Our Lean Selection Methodology article walks you through the search for business analytics and business intelligence solutions.
Next Steps
Decisions based on incomplete, inconsistent and inaccurate data can hurt your business. Whether starting from scratch or upgrading your tech stack, there’s no time like the present to get cutting-edge software in your corner.
Need help getting started? Get our free, customizable requirements template to list your expectations from your new BI platform.
Which is your preferred business intelligence and analytics solution? Which features proved useful? Let us know in the comments!
