BI or BA: do you know what their differences and similarities are?
Data has never been so important to businesses. Storing, analyzing, and putting them to good use are tasks that technology helps us accomplish, and you’ve probably heard both terms: Business Intelligence and Business Analytics. But what is the difference and how do you know if your company should opt for BI or BA? This is what you will learn in this post!
Read on and also discover what to expect from each technology and what they have in common. Let’s start?
What is Business Intelligence?
Forrester, the US market research institute, defines BI as methodologies, processes, architectures, and technologies that help companies deal with data. By entering information into these tools, we can better manage and visualize them, create reports, verify the performance of each area of the business, and organize the knowledge that we have.
In general, BI software has tools that make queries and generate reports, as well as a dashboard that translates that data into easy-to-understand graphs.
Although the term BI is quite broad, in business it is mainly used to generate insights based on historical data. Most software can be obtained in isolation and integrated with systems that a company already uses (such as CRM and ERP).
The main difference between how data is handled by BI and Business Analytics is the use of interactive dashboards that in Business Intelligence help the user understand the data they have.
We can simplify things by saying that BI systems work similarly to a FAQ for internal data. Users ask questions and get answers that are presented so simply that even the least familiar person to deal with them can understand them.
Therefore, BI shares access to information that would previously be restricted to IT departments.
What is Business Analytics?
Business Analytics is a way to take BI intelligence a step further. It approaches data science, applying the patterns identified to the information that a company uses to feed the software in the construction of predictive models.
Applying Artificial Intelligence with Machine Learning or Cognitive Computing, Business Analytics can anticipate the future of the business in aspects as complex as customer retention.
It can also be applied to routine processes, such as detecting fraud in financial institutions, much faster than any other technology.
By examining data with more sophisticated tools, BA creates what we call deep insights and can point, based on historical data, a roadmap for the future.
Business Analytics algorithms are not only about analyzing data based on predetermined rules. They process raw data and are able to apply it to understand correlations, relationships, patterns, and thus generate predictions that lead to different, more accurate decisions.
What are the similarities between BI and BA?
Some experts, such as Pat Roche, vice president of engineering at Magnitude, say that BI and BA differ because the former is necessary for business to operate and the latter to revolutionize it. But Business Intelligence and Business Analytics have a lot in common. Check out, in the following topics, what we can notice when using these two technologies.
Tools for decision-making
Business Intelligence and Business Analytics are both tools to improve decision making. They just use different methodologies to do this.
While BI works with past data, evaluating what has already happened within the company and what actions can be taken to repeat successes and avoid failures, BA focuses on using Artificial Intelligence to predict the future. Machine Learning is one of the features that give Business Analytics the power to predict the impact of decisions on business directions.
The tendency to use data to discern between opportunities and challenges faced by businesses is referenced by the term data driven. BI, Big Data, and Business Analytics are the ones who are responsible for it.
It is estimated that 90% of the data that exists around the world have been produced only in the last two years. They have become ways of measuring business success and also guiding them to the right path.
To build data management infrastructure in your company, BI and BA will be used together as an integral part of the process.
What is the main difference between the two technologies?
It is easier to understand the differences between BI and BA in practice. The main difference is the use of Artificial Intelligence in BA, but another factor that differentiates the two technologies is the data.
Complex data and simple data
When we talk about data modeling, we can clearly see the difference between choosing BI or BA. If a company needs to do complex analyses of its data, such as that used by data scientists, it uses Business Analytics.
So if your business needs to correlate data, you are looking for Business Analytics.
What and why
You know the difference between “what” and “why”, right? So you’ve understood how BI and BA are applied within organizations.
While Business Intelligence software can increase visibility, allowing us to see exactly what is happening in business, Business Analytics algorithms explain why.
With BI it is easy to know in which periods of the year sales of your products were the greatest. But it is BA that we use to understand the reason why demand has increased.
There is a choice for businesses. Applying BI does not mean that they will not be able to use the benefits of BA. But the option to implement one of these data tools first depends on the needs of each company.
It’s the Business Intelligence tools that help a lot of these businesses to take their first steps toward using data in the business routine. Nothing, however, prevents your company from betting on the relationship between BI and BA to get ahead of the competition.
So, did you understand the difference between BI and BA? Subscribe to our newsletter and keep learning about technology!
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