• Category
  • >Business Analytics

How does Business Analytics differ from Business Intelligence?

  • Pragya Soni
  • Dec 28, 2021
How does Business Analytics differ from Business Intelligence? title banner

Business analytics and business intelligence! These two tools are the important components of business development. From creating insights to solving business queries, both tools discharge specific functions to attain business development. 


Everyone nowadays is aware of these two solutions. But many know that business analytics is a part of business intelligence solutions. In this blog we will read the concept and components of business intelligence and business analytics. We will also discuss the key differences of the two.



What is the meaning of Business Analytics?


Business analytics is a common term used in business management. Business analytics is the subset of business intelligence. It is a data management system. It may be defined as a process by which businesses use statistical methods for analyzing site data to form new insight. 


Business analytics helps in predictive analysis, data transformation and data mining. This further helps in improving strategic decision-making capability.


(Related blog -  Components of business analytics)


Types of business analysis


Business analysis are classified into following three types:


Descriptive analytics


Descriptive analytics is used to describe and highlight the major data points. It is used to summarize data points in a constructive manner. Descriptive analytics help in uncovering the trends and patterns of the hidden data. 


Rather than presenting predictions and drawing inferences, descriptive analytics is the study of the past. As the name suggests, descriptive analytics describe and display data using data representations like bar and pie charts. 


These visual data representations assist the business intelligence tools by providing productive insights. Descriptive analysis is the most convenient type of business analytics and can be accessed by everyone, even one with the basic knowledge. It is a quick process and is used to identify immediate spots and changes.


Predictive analytics


Predictive analytics as the name suggests provides the future predictions of the data. It is more advanced than descriptive analytics. It is used to draw possibilities and probabilities from the data. 


Predictive analysis employs statistical modeling and machine learning to identify the future outcomes from historical data. In case of missing data, machine learning fills it with the best possible guesses.


Predictive analytics is used to detect fraud in the organizations and to resemble criminal patterns. It also helps in reducing risks by studying past behaviors. In medical science, predictive analytics is used to judge accurate credit scores and to sort digital marketing images, for example MRI scans and X-rays.


Prescriptive analytics


Prescriptive analytics as the name shows prescribes the businesses. As a doctor prescribes the best medicines to the patients, similarly, prescriptive analytics prescribes the best solutions for the companies. 


Prescriptive analytics employ heavy mathematics, statistical methods and computer science. Its emphasis is actionable insights. The actionable insights can be achieved by gathering a range of descriptive and predictive data. The gathered data is then taken to the decision making process. 


Algorithms are created according to the needs and requirements. These requirements are different for different organizations. After processing through prescriptive analysis is made. 


It is an important kind of analytics as it measures the repercussions of a decision based future scenario. Also, it suggests the best course of action to a company or business as per its needs.


(Recommended blog - Business Analytics Tools)



What is the meaning of Business intelligence?


Business intelligence refers to the set of procedural and technical infrastructure that collects, stores, and analyzes data. It investigates the data produced by a company’s activities. 


After analyzing the data, business intelligence tools give reports and information. The produced reports help the managers to make better decisions. It comes in a variety of forms, for example, spreadsheets, data visualization software, data mining tools, and online analytical processing applications. 


Software companies design and produce business intelligence tools and solutions for different companies as per their requirements. With better administration of data, the companies can grow as per their competitors and business intelligence helps in achieving this.


(Suggested blog, Business analytics in decision making)


Components of business intelligence


There are several components involved in business intelligence. The key components of business intelligence include the following:


  1. Data warehouse: Data warehouse is a technical storehouse that stores data obtained from various internal and external sources.


  1. Data mining: Data mining refers to the process of studying a large set of data and drawing correlations, patterns and anomalies. The tools then derivate outcomes from the data.


  1. Process analysis: Process analysis sometimes known as business process analysis. The process works to derive efficient ways to improve businesses. 


  1. Business analytics: The business analytics itself is a component of a business intelligence solution. It creates reports from the raw data. Thus, solving further queries and rules.


  1. Business performance management: It is a network of data with business objectives for efficient tracking. It is designed to execute decision making through dashboards and share-point. 


  1. Performance benchmarking: Performance benchmarking is the process of comparing gathered data. This helps the businesses to maintain a portfolio with a competitive edge.


  1. Descriptive analysis: Descriptive analysis helps in describing and highlighting the major data points.



Business Analytics Tools vs Business Intelligence Tools


Business analytics tools and business intelligence tools are quite different from each other in the following ways. 


  1. Business intelligence tools focus more on descriptive analytics. While business analytics use predictive analytics.


  1. Business intelligence is an entire solution package for businesses while business analytics help the organizations to detect the outcomes. 


  1. Business intelligence tools include the different tools and technologies for providing solutions for business. While business analytics is a part of business intelligence tools.


  1. The end results of business analytics that are predictive outcomes are used by the business intelligence tools to serve its purpose.


  1. While business analytics answer the question ‘why’ of the business, business intelligence tools focus on the ‘how’ queries of the business.


  1. Business intelligence is more rigid as compared to business analytics. While BA accepts the changes readily and is flexible in nature.


(Related blog - Business Analytics vs Data Analytics)



Example of business analytics and business intelligence tools


To clear the concept and difference between business analytics and business intelligence, let us go through an example. This example will clear the concept of both in your minds.


Suppose you own a pearl shop selling blue sapphires and black diamonds. You present your business online and apply business tools and solutions like business analytics, data analytics and business intelligence tools.


Business intelligence tools will help you to know which product is more in demand. Suppose it is blue sapphire, business intelligence will tell you to put that more in stock. While business analytics will tell you why blue sapphire is more in demand than black diamond.


In simple language, the concept of business intelligence and business analytics can be concluded in the following way. The business analytics is more predictive analytics. And business intelligence is descriptive analytics. 


Business analytics is an embedded component of business intelligence. Both solutions play an important role and have their very own purposes in business development and management.

Latest Comments