Business Intelligence vs. Business Analytics: 3 Real Differences

Business intelligence vs. business analytics: What’s the difference? Is there a difference? If there is, why are the terms used so interchangeably?

Great questions — and if you’re asking them, you’re not alone. The waters get muddied in the discussion of business intelligence (BI) and business analytics (BA) because they’re used to accomplish similar goals. As a result, many professionals consider them to be the same thing.

But business intelligence and business analytics do have foundational differences. Knowing what those differences are allows you to optimize your company’s data and get the most from the processes and tools you use to manage it.

In this article, we’ll define business intelligence and business analytics in more detail, explore three key attributes that differentiate them, and outline ways you can leverage both effectively for your business.

Quick Takeaways

More than 90% of the world’s data has been created in just the past two years.
Business intelligence uses descriptive data to inform the present. Business analytics uses predictive analytics to forecast the future.
BI drives greater efficiency and seamless operations, while BA is used strategically to navigate change and prepare for future events.
Today, most companies need both business intelligence and business analytics to remain competitive and profitable.

Defining Business Intelligence and Business Analytics

More than 90% of the world’s data has been created in the past two years alone — a staggering volume and pace for any business to keep up with.

Business intelligence describes the overarching strategy you use to access, manage, analyze, and monitor the massive amounts of internal and external data used by your company to operate on a day-to-day basis.

It encompasses the technologies and processes you use to extract insights and make real-time, data-driven decisions for your business. BI drives greater efficiency, helps identify problems sooner, and provides a centrally accessible view of company data — typically in a platform tool — that everyone can use to stay informed.

Large enterprises leverage business intelligence platforms to connect the dots across divisions of business operations — finance, marketing, sales, supply chain, human resources, and operations.

Business analytics, on the other hand, aims to analyze data to identify trends and patterns and develop forward-thinking strategies. It’s often used to drive continuous transformation and improve organizational agility.

Unlike business intelligence, business analytics is less concerned about what’s happening at any given moment and more focused on leveraging insights to facilitate planning for the future.

Business Intelligence vs. Business Analytics: 3 Key Differences

Type of Data

Business intelligence data is descriptive and diagnostic — it uses historical and real-time insights to tell you what is currently happening and why. It’s highly accurate because it describes events that have already occurred or are happening in the current moment.

BI data is informative and is used to assess the financial health and operational performance of a business (think sales performance reports, quarterly finance reports, and supply chain updates from IoT devices).

Business analytics data, on the other hand, is predictive and prescriptive — it uses AI technology and algorithms to predict what will happen next and what businesses should do to prepare.

Business analytics uses both a narrow and wide lens to analyze data. Internal patterns help predict company performance (i.e., sales forecasts), while larger market trends provide insight into what’s likely to happen across an industry or business sector (ex: report on future market share makeup).

It’s important to note that while BI and BA data have clear differences, they aren’t siloed. In fact, they build on each other. Specifically, predictive business analytics insights would be impossible to obtain without the ability to mine and analyze historical descriptive datasets.

Timeframe of Focus

Business intelligence is heavily focused on the here and now. A strong BI strategy means that at any given time, a business leader or stakeholder could access a dashboard or run a report for an accurate, real-time snapshot of the business.

Business analytics is totally future-focused. It looks to continuously understand what will happen next so businesses can capitalize on opportunities, maintain agile strategies, and make smart business decisions in advance of upcoming market events.

Applications

Applications for business intelligence vs. business analytics may overlap at times but in general can be thought of as separate in practice.

BI is a boots-on-the-ground tool (so to speak) used by managers and other operational decision makers to keep the business running smoothly. BI data is a building block for performance reports, informs real-time updates when needed, and makes the organization more data-driven as a whole.

Business analytics is used more strategically to drive a business forward in its intended direction while maintaining high-level insight into the future. BA data is the foundation for sales and other business forecasting, trend analysis, and market reports that uncover opportunities and potential challenges.

Which do you choose?

In short: Both. We live in a fast-paced business world, and one that has seen unprecedented levels of uncertainty and change over the past few years. To stay competitive and successful, companies need a data-driven understanding of their current state as well as the ability to predict likely events coming next.

Of course, the extent to which you invest in one or both depends on your unique needs. If your primary focus is driving greater efficiency and cost savings, you’ll need a strong BI strategy to accomplish it. If you need pinpoint accuracy on future market trends to drive financial decisions, BA capabilities are essential.

Fortunately, most modern enterprise data tools now wrap intelligence and analytics into one platform, enabling comprehensive and holistic data capabilities rooted in both the present and the future.

Over to You

Ready to level up your data strategy? LeanIX Enterprise Architecture Management can help you map data flows across the organization. With LeanIX EAM, you can also create an accurate, data-rich overview of your entire IT estate, allowing you to understand its current state and plan for the future.