Business Intelligence vs Business Analytics: What it really means??

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Business Analytics and Business Intelligence, What’s the difference between? The right answer is: everybody has a viewpoint, but nobody knows for sure, and frankly you shouldn’t bother.

For example, when SAP mentions “business analytics” rather than “business intelligence”, it’s envisioned to specify that business analytics is a gigantic term including business intelligence, data warehousing, enterprise performance management, enterprise information management, analytic applications, and risk, governance and compliance.

But different vendors (such as SAS) use “business analytics” to show some level of vertical/horizontal domain knowledge secured with predictive or statistical analytics.

There are two things worth differentiating, at the end of the day:

The first is the business characteristic of BI — the need to get the utmost value out of information. This need hasn’t really changed in over fifty years (although the increasing complexity of the world economy means it’s ever harder to deliver). And the majority of real issues that stop us from getting value out of information (information culture, politics, lack of analytic competence, etc.) haven’t changed in decades either.

The second is the IT characteristic of BI — what technology is used to assist provide the business need. This obviously does change over time — sometimes drastically.

The problems in nomenclature typically happens because “business intelligence” is commonly used to mention both of these, according to the context, thus confusing the heck out of everybody.

In particular, as the IT infrastructure inevitably changes over time, analysts and vendors (especially new entrants) become uncomfortable with what increasingly strikes them as a “dated” term, and want to change it for a newer term that they think will differentiate their coverage/products (when I joined the industry, it was called “decision support systems” – which I still think is a better term in many ways).

When people introduce a new term, they inevitably (and deliberately, cynically?) dismiss the old one as “just technology driven” and “backward looking”, while the new term is “business oriented” and “actionable”.

This is complete rubbish, and I encourage you to boo loudly whenever you hear a pundit say it.

The very first use of what we now mostly refer as business intelligence was in 1951, as far as I can tell, with the arrival of the first commercial computer ever, dubbed LEO for Lyons Electronic Office, powered by over 6,000 vacuum tubes. And it was already about “meeting business needs through actionable information”, in this case deciding the number of cakes and sandwiches to make for the next day, based on the previous demand in J. Lyons Co. tea shops in the UK.

And It most definitely was not “only IT” or “only looking in the rear-view mirror” as some people pompously try to dismiss “old-style BI”.

At the end of the day, 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…


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