Differences between Business Analytics and Business Intelligence

Everyone has a different notion of any term related to analytics: some people talk about Business Intelligence others about business Analytics and some others about Data Mining.

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Business Analytics or Business Intelligence?

For example, a provider like SAS uses Business Analytics in order to indicate a certain level of vertical or horizontal business knowledge related to statistical and predictive analysis. However, when SAP says Business Analytics instead of Business Intelligence, it means that business analytics is a generic term that includes data storage, business intelligence, enterprise information management, enterprise performance management, analytic applications, etc.

Elsewhere, the Business Analytics is defined as “the iterative practice, methodical exploration of data in a company or organization with emphasis on statistical analysis… for taking data-driven decisions”. And then they define Business Intelligence as “applications and technologies for gathering, storing, analyzing and accessing data to help a company or organization take better business decisions.”

“Business Analytics is defined as the exploration of data in a company in order to take data-driven decisions. Whilst Business Intelligence refers more to the applications and technologies used for generating this data”

Although it seems very subtle, we can understand that the difference is that Business Analytics makes extensive use of data, statistical analysis, explanatory and predictive models in order to drive decision making. Instead, Business Intelligence is more related to the generation of data and information to support the same process. There are two key points here that are worth differentiating:

On one hand, the commercial aspect of BI or the need to obtain the maximum value out of the information. This need has not changed in over fifty years (despite the increasing complexity of the global economy). Most real problems that prevent us from obtaining the value of information (information culture, politics, lack of analytical skills, etc.) have not changed much in recent decades. However, nowadays we can find Msc in Business Analytics that give us the necessary skills and knowledge to perform these tasks in a company.

And on the other hand, the technological aspect of BI or how we use technology to help meet business needs. Naming problems usually arise because “business intelligence” is commonly used to refer to the technological part, confusing everyone.

The Origins of Business Intelligence

We could go back in time and see that the first use of what we now call Business Intelligence happened over 60 years ago with the arrival of the first commercial computer, called LEO (Lyons’s Electronic Office), which worked with 6.000 vacuum tubes and had a 2KB memory.

“The first example of Business Intelligence happened in 1954 with the appearance of the first commercial computer called LEO”

One of his first tasks was the preparation of daily orders that J. Lyons Co. shops (one of the leading companies in the manufacture and distribution of food in the UK) performed and was used to calculate the daily production needs, installation instructions, delivery times, billing, costing and management reports. In short, the first example of “business intelligence” in the world, obviously much more limited than the one we have nowadays.

So whatever you do (Business Intelligence or Business Analytics) the most important is to take advantage of all the information your company gathers, using the technology and putting all that knowledge in the right place to meet the needs of the business and enable data-driven decisions.

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