Business Intelligence vs. Data Analytics – Harnessing the Power of Information for Strategic Decision-Making
The ways businesses use data have changed significantly over the last decade or so. Thanks to rapid technological advances, it’s possible to gain powerful insights into customer behavior and preferences that can help businesses succeed in just about any industry.
There’s a lot of confusion and misunderstanding surrounding data analysis terms. This can make it challenging for business owners to get the information they need when they need it. If you want to use data to increase your business success, it’s important to know the differences between key terms and concepts.
Business and data analytics are two important concepts that all business owners should understand. Here’s what they mean and how you can use them to harness the power of information for strategic decision-making.
Why Data is Critical for Modern Business Success
Starting a business has never been easier. For online businesses, especially, the startup costs can be very low, and there are tons of great resources out there to help you start and run a business. Many entrepreneurs today have no formal business education yet manage to succeed by learning along the way.
With that said, starting a business can be easy, but making it successful is challenging. Now that anyone can set up shop online, the marketplace has become extremely crowded. It can be hard to get noticed, even if you have a great product or service that you know people want to buy.
That’s where data comes in. As romantic as having a “sense” or “intuition” might be, it’s not enough in today’s economy if you want your business to succeed and grow long-term. You need to be able to find and use data from inside and outside your business to capture meaningful insights.
Numbers don’t lie. You can’t make excuses when you have the data in front of you. In some cases, data can make the difference between success and failure.
What is Business Intelligence?
Business intelligence (BI) refers to the data you collect from inside your business and the way you use it. Your customers provide data every time they interact with your website. Turning that raw data into customer insights, such as sales trends, can be incredibly valuable.
Business intelligence usually refers to the entire process of using data within a business, specifically. Its focus is very narrow— improving an individual business’s performance. Using business intelligence allows companies to make better decisions, understand their customers, and monitor progress toward key performance indicators (KPIs).
It’s important that you have your IT systems set up to collect data that is relevant to your business. Knowing how many people visit your website, how many people make a purchase due to marketing or other factors, and which products are most popular are just a few examples of the kinds of data you’ll want to collect.
Not only will business intelligence help you make better business decisions, but it will also help you control your budget. For example, if you’re not seeing the return on investment (ROI) that you need to be seeing from certain marketing efforts, you can use the data to reallocate your budget into more effective channels.
What is Data Analytics?
Data analytics is a broad discipline within the field that uses statistical and quantitative methods for analyzing data and identifying trends. The large datasets that can be analyzed using these methods can produce all kinds of insights for a variety of purposes.
Insights gained from data analytics can be used to help solve complex problems. The potential applications are endless, and we’ve only scratched the surface of what data analytics can do for our world.
Differences Between Data Analytics and Business Intelligence
The main differences between data analytics and business analytics are the scope and use. BI is used for a specific purpose: to help improve business performance by optimizing sales and improving efficiency. The datasets used are typically on the smaller side, coming from inside a single company.
Data analytics, on the other hand, is a more general term. It can be used in any industry, not just business. You can perform data analytics as a part of business intelligence, but business intelligence is not necessary to use data analytics.
For business owners, BI is usually the more applicable term. Data analytics is often used in public health, government, education, and other settings, in addition to business. It can be helpful for problem-solving within communities or even societies.
How Data Can Help You Succeed in Business
So, how can BI and data analytics help you as a business owner? It really depends on your goals and priorities. If you collect and organize your data well from the beginning, it can be fairly simple to generate reports as needed.
Most business owners use the data they collect to help with marketing efforts. Using BI, companies can see exactly which types of marketing campaigns are resonating with customers. This can also reduce waste within a company by identifying the approaches that aren’t working and need to be adjusted or scrapped.
BI can also help business owners streamline operations, become more efficient, and save money. By analyzing data, business owners can better understand their business expenses and what can be trimmed back or reallocated. They can also find areas of waste that might need more efficient systems and processes.
Leveraging Data for Improved Business Growth and Sustainability
By embracing data analytics and business intelligence, business owners can get concrete answers to the questions that come up in their business and design thinking strategy. You no longer have to rely on your intuition when it comes to strategic decision-making— you can simply look to the numbers.
With all the easy-to-use data tools out there, it’s easier than ever for businesses of all sizes to leverage data. If you use it properly, you can expect to make decisions that will help your business grow, thrive, and sustain for years to come!