All companies need a business analyst
Business intelligence or business analytics
A huge amount and variety of data is generated in your company every day. To make smarter decisions, identify problems, and ensure profitability, you need methods and tools to turn that data into actionable insights. Business Intelligence (BI) and its sub-areas - Business Analytics and Data Analytics - are data management solutions for understanding historical and current data and for gaining knowledge. But what makes these solutions different and which one is right for your business needs?
The differences between BI, data analytics and business analytics are in the details. In addition, these terms are often used synonymously. Before we clarify the differences, let's start with some simple definitions.
What is business intelligence?
The term “Business Intelligence” ultimately describes a process, namely the acquisition, storage and analysis of data from business transactions. BI provides comprehensive business metrics in almost real time to support better decisions. With better business intelligence, you can benchmark performance, identify market trends, increase compliance, and optimize almost every aspect of your business. Learn more about business intelligence and why it can be useful for your company.
What is the difference between business analytics and data analytics?
The term "Business Analytics" (BA) refers to the use of company data to forecast trends and results. The BA includes data mining, statistical analysis and forecasting to support appropriate decisions.
Data analytics refers to the technical process for determining data, preparing data, transforming data and setting up a system for managing data. Data analytics tries to identify trends from large amounts of data and to solve problems. Data analytics is used in many areas - in government as well as in science. So this technique is not limited to business applications.
What is the difference between business intelligence, business analytics and data analytics?
Basically, all of these processes use data to optimize business activity. To understand the specifics, we need to look at the differences in detail.
Business intelligence versus business analytics
The biggest difference between business intelligence and business analytics is in the questions they answer.
Business intelligence is based on descriptive analytics
BI uses descriptive analytics primarily for a prepared summary of historical and current data in order to show what has happened and what is currently happening. BI answers questions about "what" and "how" and helps you determine what is working well and what needs to be changed.
Business analytics is geared towards predictive analytics
BA, on the other hand, uses predictive analytics with data mining, modeling, and machine learning to determine the likelihood of future outcomes. BA answers questions about the "why", i. that is, you can use it to make more informed predictions about future events. With BA, developments can be anticipated and, on this basis, any necessary changes for a successful result can be initiated at an early stage.
Application of BI and BA in practice
In the following, the differences are illustrated with practical applications of BI and BA. This example is about homemade jewelry that is sold through an online shop. Business intelligence provides helpful reports on the past and present status of the business. BI shows that sales of blue feather earrings have been highest in Utah in the past three weeks. As a consequence, you will now be making more earrings with blue feathers to meet demand.
Now, with business analytics, it is asking why sales of blue feather earrings have soared in Utah. When you examine your website data, you find that the majority of your traffic is from a post from a Salt Lake City fashion blogger who appreciates your earrings. Knowing this, you decide to send earrings to some other prominent fashion bloggers in the US for free. With this past sale information, you can anticipate how many earrings you will need to make and how much material you will need to meet demand when the bloggers you contact post about the earrings.
Business analytics versus data analytics
The difference between business analytics and data analytics is a little more nuanced. Both terms are often used synonymously in business life, especially in connection with business intelligence.
Data analytics is the generic term for determining insights from data
Data analytics can be any form of analysis of data - data from spreadsheets, databases, or other data sources - that involves identifying trends and outliers, or measuring performance. With additional math or IT skills, data analysts can use it to perform a wide variety of tasks - from managing a subscriber database to calculating the return on an upcoming investment.
Business analytics determine insights into the operational process
Business analytics are intended to ensure the general functioning of daily processes in the company. A business analyst has less to do with the technical aspects of the analysis than with the practical application of data insights. Job descriptions can also include the creation of an optimized workflow or the selection of the best supplier.
Application of BA and data analytics in practice
In the following we will deal again with the example of the online jewelry shop. A data analyst will look at how your website is being used to determine traffic trends, analyze visitor demographics, and possibly develop a system to track how customers click through the various pages. A business analyst, on the other hand, is more concerned with the practical application of this data and how decisions, e.g. B. for booking advertising, creating new products or updating the website can be supported.
Identify the need for business intelligence and business analytics
An either-or decision about business intelligence and business analytics is not the right approach to data management. In reality, a company needs both business intelligence and business analytics, i.e. descriptive and predictive analytics, to ensure its success. In addition, business leaders often use these terms to refer to a variety of things, including choosing the type of technology, tools, and skills to invest in. Therefore, the question should be less “BI or BA”, but more attention should be paid to what the data system is to be used for and who is using it.
Developing a business intelligence strategy is therefore an important first step in implementing a BI solution. To do this, you need to answer the following questions:
- Who are the central managers? Who will use this system?
- Which departments need business intelligence and for which facts should key figures be determined?
- What kind of support do content authors and information users need?
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