Modern businesses leverage countless technologies and tools to improve efficiency and reduce labor costs. Two such tools are business intelligence and analytics, both of which can drive success when understood and used properly.
Here’s the difference between business intelligence and business analytics, and how each can benefit your business.
What is business intelligence?
Business intelligence (BI) includes the processes and methods of collecting, storing, and analyzing a business’s data to reveal patterns, trends, or potential issues. BI software enables businesses to analyze various sources of data at once, limit searches to particular criteria, run queries, and create reports to better understand outcomes.
The data collected is based on company activities and operations, as well as customer information, product outcomes, and sales. BI provides real-time data and makes it easier to track key performance indicators (KPIs). Businesses that use BI software are able to make data-driven decisions and identify areas where they can improve.
Pros of business intelligence
- Increases productivity and efficiency. Business intelligence tools allow for faster data retrieval, storage, and organization, which minimizes the time and resources it would normally take to manually sort through. Essentially, BI optimizes business processes, enabling the streamlining of operations.
- Enhances visibility through interactive platforms. Businesses will be able to view company data in an organized report, graph, or chart. Business intelligence tools can keep track of, and report on, certain KPIs, as well as reveal trends within the business, customer demographics, or current market.
- Accessible and scalable. Mobile business intelligence can operate on mobile or smart devices, allowing users to access and manage data in real time from wherever they are. BI tools also allow users to refine their data searches, shift between overviews and detailed reports, as well as predict future outcomes.
Cons of business intelligence
- Pricing may not be transparent and can vary. Each vendor will have different pricing for the software they provide, and some of them may have hidden fees or costs for data usage or premium features. It can also be costly if you are investing in several tools or systems at once.
- BI systems can be complex and time-consuming. Certain tools or systems can take up to a year or more to implement into your business. There are also quite a few applications involved in business intelligence, which can become overwhelming.
- Security may be unstable. There are always risks of data breaches or loss in a business. Another problem you may experience is exposing business data to personal devices. If you use mobile BI, employees may use personal phones or devices to access company data, which poses a slight risk.
Business analytics help businesses make the most efficient decisions.
What is business analytics?
Business analytics, also known as data analytics, focuses primarily on future growth and events. It is the study of skills, technologies, and practices of business operations in the past to optimize future progress and evolution. Business analytics help businesses make the most efficient decisions.
The three types of commonly used analytics are:
- Descriptive analytics, which tracks KPIs.
- Predictive analytics, which analyzes the possibilities of certain outcomes in the future.
- Prescriptive analytics, which provides recommendations on how to solve problems based on past data.
Pros of business analytics
- Improves decision-making.The process of analyzing data enables businesses to identify potential situations they may encounter in the future, which helps them make better-informed decisions and set reasonable goals.
- Increases efficiency. With the help of automated processes and software, the process of data mining and analytics is much faster. Users are able to view visual reports, monitor progress, and streamline operations.
- Reduce costs and increase revenue. Business analytics help identify unnecessary expenses, as well as areas that may require more financial support. Businesses can also view areas to improve so they can gain customers, refine products, or make other changes.
Cons of business analytics
- Low-quality data or analysis. Human error can affect the way we interpret or analyze data. In addition, there may not be enough data to collect, or the data may be complex.
- Security issues. There are potential security risks in using business analytics due to the sharing of data collections or analyses. Anyone in the business can access customer information, such as transactions or purchases.
- Improvement takes time. Business analytics work to help businesses grow and improve, but like anything that grows, it takes time to see long-term results.
[Read more: How to Keep Customer Data Secure]
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Published June 22, 2022