Business Intelligence vs. Data Analytics Tools

Jason Catwright

Feb 15 2018

Business Intelligence vs. Data Analytics Tools: What’s the Difference?

The key to success in any business is figuring out what works and what does not, and implementing changes from this gathered information. But the hardest part is finding a reliable way to assess operations and approaches due to the massive amounts of data involved.

Business Intelligence and Business Analytics are technological approaches taken to simplify this process through automation. They are currently among the most popular data management tools as they both present clear benefits in workload management, sustaining profitability and maintaining a competitive edge in business operations.

However, the terms business analytics and business intelligence are often mistakenly used interchangeably. While the two fields might overlap in some aspects, they still hold notable differences. An accurate understanding of the two concepts will help any business owner to establish which one would be more appropriate for their operations.

Business Analytics

Business Analytics (BA) refers to the process of exploring historical data pertaining to your business in order to establish meaningful trends and patterns. Such trends are in turn used to model business change where necessary while also sustaining successful approaches.

The insight gained from the exercise also helps business owners to plan for the future and work purposefully toward better performance. This approach uses data analytics tools to figure out the reasons behind certain behavior and predictive modeling to estimate how the future will pan out.

Business Intelligence

Business Intelligence (BI) also involves the exploration of data. But unlike BA, it uses both real-time and historical data to identify problems, resolve them, and help individuals perform better in their relative duties.

The objective of business intelligence software is to use the insights gathered from current and past data to optimize the present and create success now.

What are the Differences between Data Analytics Tools and BI Tools?

Now that we have a clearer understanding of what the two terms mean, let us consider some of the differences between the tools used in both regards. This will help you figure out which one would work better for your business when considering the objective that you wish to achieve.

While BI has been compared to looking in the rearview mirror at historical data, BA is comparable with taking a peek into the future to see what will happen. Therefore, BI tools let you know what happened so as to help you improve on present decisions and choices. BA, on the other hand, helps you to anticipate what is coming next and to prepare for it. Predicting the future helps you to understand how to plan your moves.

The conventional BI approach focuses on generating reports for a business executive to create a catalog of the past. This catalog serves as a foundation for current decisions and directs the path of future business strategies.

Essentially, BI reporting uses data visualization tools which will allow you to learn from past mistakes while at the same time building on past successes. This will also aid you in replicating what has been proven to work and eliminate what does not. Real-time dashboards make it possible for managers to generate accurate reports that hold relevant and actionable information.

BA presents analytical tools that help you draw meaning from what has happened to prepare for inevitable developments or change now and improve the future. Basically, these data analytics tools make it possible to address problems before they occur.

They do this using ad-hoc data analysis in real-time and thus enable executives to make quick and informed decisions for the good of the business.

Similarities between BA and BI

Both BI and BA incorporate aspects of analysis and reporting into their approaches. Both use data, both historical and real-time to inform either present or future decisions. In many cases, business intelligence tools will use online analytical processing (OLAP) to execute complex analytical tasks and then use this information to create a KPI dashboard to assist managers in decision-making. BA also uses data analysis software to carry out a similar function and shows the results in customized dashboards.

Both these approaches are used to help pinpoint the weak areas in a business model and offer ways to deal with the problems. In both cases, executives are better able to make informed decisions based on data. And since these processes are automated, the decision-making process is much faster, thus making an organization more efficient in its operations.

Making the Right Choice for Your Business

Looking at the above differences and similarities, it is clear that both BI tools and data analytics tools have their usefulness to different business models. This puts the responsibility in your hands to figure out what results you need before settling on any given tool. The main point to consider in both cases is the objective you wish to achieve. In essence, the decision between these two approaches depends on your priority in the decision-making process.

Business Intelligence

It might be that you are satisfied with the overall business model and only wish to implement a few changes in order to improve operations, increase the efficiency of processes already in place or meet your targets better. In such cases, business intelligence might be a better option. It is also the best choice if your business necessitates the use of extensive data and intuitive report systems like data dashboards.

Business Analytics

But if instead you would like to completely change your business model and processes but have no clue where to start, business data analytics tools might be a better choice. This kind of software is also suitable for a business that is only starting up. It will help you assess market trends, the industry as a whole and your own company. It will also assist you in establishing a competitive edge over armed with predictive data.

In many cases, however, a business needs a combination of all the above benefits in terms of present success and planning for the future. Whether you choose to use one of these methods or a combination of the two, BA and BI are the future of business and will greatly improve your odds of success.


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