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What is the difference between business intelligence and business analytics?
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5 Answers
Business Analytics is a subset of Business Intelligence.
Business Intelligence is a set of techniques used in identifying, extracting-transforming-loading data and their visualization in form of reports, data analysis or information dashboards. If I must say a definition, it will be "Crucial business information to the people who need it, when they need it".
So, data analysis is part of BI in terms of data manipulation, slicing and dicing, filtering etc... in order to find out why something happened.
As a general rule, Business Intelligence (BI) involves analysing past performance. This can be done by measuring against a set of Key Performance Indicators (KPIs) or by setting benchmarks and then seeing how well (or not) the business meets them.
Business Analytics is about developing an understanding of what the business is about in order to develop (or refine) a business plan or strategy. This may use some of the data (including KPIs) gathered as part of BI.
Here's an analogy I read recently:
Business Intelligence is like the black box on an airplane. It can take in incredibly granular data and can tell you exactly what went right and wrong whenever you crack it open.
Business analytics is like the GPS navigation display. It uses much of the same data, integrates it with other data (like maps, or in the case of BA, external and offline data) and visualizes it.
[Here's the blog that analogy came from; there's lots more discussion and detail in it if that wasn't enough for you :) http://anametrix.com/index.php/resources-1/actionable-analytics-blog/entry/ba...
I really like the way Anthony articulated the difference and value of each!
Hrvoje is right, too: BI is a big category into which BA falls. There are lots of tools that call themselves BI for that reason, even if they do something relatively lightweight. When a buyer is looking for a BI tool, they're generally looking at Cognos or SAP or something really sophisticated (and expensive) rather than a lightweight SaaS from a young company.
Agreed, Business Intelligence is the higher level definition of data/information presentation to allow executives and managers to make "intelligent" decisions about the business.
Analytics is often associated with predictive analytics - the "what ifs" of business. Traditional BI is more about what happened and what it means. Predictive is to use data to predict what may happen if you change budgets or headcount or supply chain...or, or.
You can use either term.
On the topic in general (not just in this post), a lot of smart people provide excellent and logical definitions of both terms, but those definitions rarely match.
One of the best pieces I saw on it was by Timo Elliot earlier this year: http://timoelliott.com/blog/2011/03/business-analytics-vs-business-intelligen.... Definitely worth reading the whole thing, but the main takeaway is excerpted here:
"At the end of the da[y], nobody important cares what this stuff is called. If you’re in charge of a project, what matters is working out the best way to leverage the information opportunity in your organization, and putting in place appropriate technology to meet that business need — and you can call that process whatever you like: it won’t make any difference"
What we're finding, though, is that many companies don't understand (maybe because they're spending so much time on definitions) the best way to leverage the information opportunity. They're still thinking of both terms as another way of saying "reporting... with better graphics".
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