Business intelligence and business analytics are used synonymously by the industry for years. So, what is the difference? Though both these concepts are different, organizations have the necessity to understand about the complimentary nature of these two.
According to Gartner, the term business intelligence refers to people, processes and applications involved in organizing information and analyzing it to improve management performance through better decision-making. To further simplify, BI refers to identifying, extracting and analyzing business data with the help of customized software. BI applications aid decision making by utilizing historical data. Hence a BI system is also termed as decision support system (DSS). In their book “Competing on Analytics: The New Science of Winning”, Thomas Davenport and Jeane Harris refer to Business Analytics (BA) as the skills, technologies, applications and practices for computational exploration and investigation of past business performance to gain insights and drive business planning. Based on the extensive usage of statistical methods and quantitative analytics BA focuses on developing new perspectives on business performance. BA can be utilized as an input to aid senior management in decision-making or sometimes utilized for automated decision making process.
In the past, only statisticians controlled the analytics and they used to deliver reports to select users in the top-level management. Most managers in middle-level will not have access to these reports and hence they depended on their own data and information for decision-making. But present day organizations integrate BI and BA for obtaining historic and analytic information at the right time for decision makers at all levels. This has improved the quality of decisions that are being made and in turn has resulted in better organizational performance.