Business Intelligence and Analytics
- (Harvard University - Harvard Taiwan Student Association)
- Overview
Business analytics (BA) and business intelligence (BI) serve similar purposes and are often used as interchangeable terms, but BI should be considered a subset of business analytics.
BI focuses on descriptive analytics, data collection, data storage, knowledge management, and data analysis to evaluate past business data and better understand what is currently known.
BI studies historical data to guide business decisions, while business analysis looks toward the future. It uses data mining, data modeling and machine learning to answer why things happen and predict what may happen in the future.
BI is descriptive, telling you what is happening now and what happened in the past to get your organization to this state: Where are the sales prospects today? How many members did we lose or gain this month? Business analytics, on the other hand, is predictive (what will happen in the future?) and prescriptive (what should the organization do to create better results?).
- Business Intelligence (BI)
Business intelligence (BI) is a set of strategies and technologies for analyzing business information and transforming it into actionable insights that inform strategic and tactical business decisions.
Business intelligence (BI) is a combination of tools, processes, and strategy that help organizations analyze business data to make better decisions. BI systems can also be called decision support systems (DSS).
BI systems analyze current and historical data to present findings in visual formats like reports, dashboards, graphs, charts, and maps.
BI can help organizations with:
- Decision-making: BI can help organizations make better data-driven decisions at the strategic, tactical, and operational levels
- Performance: BI can help organizations increase profits and performance, monitor business performance, and evaluate performance
- Efficiency: BI can help organizations optimize operations, implement more efficient business processes, and create new efficiencies
- Insights: BI can help organizations discover issues, gain visibility into cash flow, gross margins, and operating expenses, and capture insights about employees and prospects
BI data is typically stored in data warehouses, data marts, or data lakes.
- Business Analytics (BA)
Business analytics (BA) is a collection of methods and technologies that use data analysis, statistical models, and other quantitative techniques to solve business problems. It involves a methodical examination of an organization's data to help drive decision-making.
BA can help businesses in several ways, including:
- Improving decision-making: By eliminating guesswork, BA can help minimize potential financial losses
- Increasing operational efficiency: BA can help businesses improve their operations
- Optimizing customer outreach: BA can help businesses improve their customer outreach
- Mitigating risk: BA can help businesses mitigate risk
- Improving security: BA can help businesses improve their security
Some tools used to create insights from data include: Data management, Data visualization, Predictive modeling, Data mining, Forecasting simulation, and Optimization.
There are four forms of analytics: descriptive, diagnostic, predictive, and prescriptive. Business analysts use data to form business insights and recommend changes in organizations. They can identify issues in many areas of a business, including IT processes, organizational structures, or staff development. Business analysts can act as a liaison between IT and the executive branch, but they don't always work in IT. If they specialize in IT, they are known as IT Business Analysts.
BA is the process of transforming data into insights to improve business decisions. Data management, data visualization, predictive modeling, data mining, forecasting simulation, and optimization are some of the tools used to create insights from data.
- Data, BI, and BA
Business intelligence (BI) and business analytics (BA) are both data management solutions that use data analysis to improve business performance.
The main difference between the two is the type of questions they answer:
- BI: Uses historical data to answer "what" and "how" questions about current business operations. BI can help identify issues in an organization's workflow, increase efficiency, and streamline processes. BI is often used as a foundation for answering complex questions, and BI applications are best suited for structured data from enterprise applications. However, BI can be resource-intensive and complex, and it may require specialized skills and training.
- BA: Uses data mining, modeling, and machine learning (ML) to answer questions about future outcomes. BA can help predict future trends and opportunities, such as product innovation or changes to a business model. BA is more advanced than BI and is better suited for organizations that are changing or adapting, as it can help planners suggest and verify changes to products or services. BA can suit both unstructured and semi-structured data.
BA has generally been described as a more statistical-based field, where data experts use quantitative tools to make predictions and develop future strategies for growth. For example, while BI might tell business leaders what their current customers look like, BA might tell them what their future customers are doing. Some experts use business analytics as a term to describe a set of predictive tools used within the realm of BI.
[More to come ...]
