BI Vs Data Analytics: Which is important for your small business

Data Analytics v Business Intelligence: What is the Difference?

Data analytics (DA) or business analytics is the process of examining raw data to draw conclusions about the information embedded inside it. The business extracts data from various sources, categorize it, and analyze it, to identify behavioral patterns of their customers, or derive other insights.

Business Intelligence (BI) refers to the sum of technologies, applications, and practices for collecting, integrating, analysis, and dissemination of business information, aimed at improved decision making.

Many equate Business intelligence (BI) with data analytics. The two are indeed interconnected, with business Intelligence also involving analyzing data to unlock insights. Both approaches analyze historic and current data to resolve underlying issues, improve the status-quo, or identify trends.

The difference is in scope. Data analytics is more future-oriented, leveraging techniques such as predictive modeling and advanced statistics to predict the future. Business Intelligence, on the other hand, is more of a comprehensive and objective information system, focused on the present insights.

Business intelligence identifies trends and patterns without digging too much into the “why’s” or predicting whether such trends will sustain or change in the future. Data analytics, on the other hand, deals with the “why’s” of what happened in the past. It breaks down contributing factors and causality and uses these why’s to make predictions of what will happen in the future.

BI is, in a sense, akin to looking in the rear view mirror, whereas Business Analytics is looking into a magical mirror to see what will happen in the future.

How it Works

Data analytics or business analytics involve data mining, or the science of sorting through large data sets to unearth trends, patterns, and relationships. Next, it applies predictive analytics to predicting customer behavior, equipment failures and /or other future events.

Business Intelligence (BI) is not a single piece of software or even a suite of software to crunch Big Data. Rather, it is an information management system, or umbrella term co-opting myriad software, infrastructure, best business practices, and other tools to optimize decision making and enhance performance.

A Business Intelligence suite may co-opt databases to pull data from disparate sources, analytical tools to process data, applications to convert processed data to reports and charts, and more.

BI allows drill-down into the underlying data, and to tweak dashboards to offer precise and accurate insights, all with a focus of business planning and strategy formulation.

Which should SMB’s Choose?

In an ideal world, businesses would do well to have both data analytics and business intelligence.

Analytical insights, be it of the Business data analytics type or Business Intelligence type, in invaluable in today’s data-driven age. The business can benefit from Business Intelligence to improve efficiencies and enhance the quality of decisions, while they can be better positioned to tackle the future using Data analytics. While BI is needed to run the business, Data Analytics is needed to change the business.

However, these systems require money to deploy. Small businesses may have to prioritize and allocate the investment dollar to investments which promise the maximum returns. Here, BI, delivering the primary insights, score over data analytics or business analytics, which is wider in scope and offers the next level of insights after BI.

This is, however, not set in stone, and the priority could well change depending on the nature and specific need of the business

 The Value of BI

Business intelligence allows businesses of all hues to make better decisions by accessing big data. BI offers an analysis of historical data right up to the present, and what the business does with such information is up to them. Ideally, the business would learn from mistakes, build on previous successes, and feed such insights into decision-making going forward, replicating successes and changing what didn’t work. Success depends on the expertise and judgment of the decision makers and strategists, and in this sense, BI is a

valuable decision-making tool enabling decision makers to make informed decisions.

Some of the specific insights BI offers include

• products that have been most successful
• seasonal trends that have influenced success during launches
• dismantling assumptions. For instance, the marketer may work under the impression the customer primarily valued the price-point of the product, but BI insights may unearth customers were actually willing to spend more on if the product was of high quality.

Such insights allow marketers and other decision-makers to learn from experiences and pose a better effort in the future. They could sure do with data analytics which helps them predict future changes and trends better, but the priority obviously is an understanding of the present situation which enables them to improve efficiency and compete effectively.

It helps to have a strong BI platform that undertakes the tasks seamlessly and effortlessly, with all the key process automated, and insights delivered to the relevant stakeholders through easy to understand and customizable reports. Technological innovations such as Software as a Service (SaaS) level the playing field, with even small firms able to deploy BI platforms.

The best BI platform co-opts the latest of emerging technologies such as IoT and AI, to ensure the insights offered are comprehensive, relevant, and up-to-date. The best platforms also come customized to suit the enterprise requirement, and for this reason, partnering with a capable provider who has a strong footprint in the BI space, and who has a track record of setting up robust analytical solutions for businesses helps.