Tuesday, April 14, 2009

Business Intelligence vs Business Analytics

There is a growing debate over Business Intelligence vs. Business Analytics and what the future holds.  Clearly the Business Intelligence world has been shaken with Hyperion, Business Objects, and Cognos all now smaller parts of bigger companies.  This has created a number of marketing opportunities for the likes of Microstrategy and SAS.  The obvious marketing play was independence.  Now it is clear that SAS is taking a slightly different tact by claiming that Business Intelligence is dead and the future is Analytics.

Marketing messages aside, what we need to be focusing upon how we use information and the management process.  Call it data, information, intelligence, analytics, or whatever we come up with next, it is all irrelevant if we don't understand how to use it.  A basement full of great tools doesn't mean the house remains maintained.  
  • Do you have rules on when to use the specific tools in the BI suite?
  • Do your people have the analytical skills required?
  • Do you have a process where the information can be discussed and actions agreed upon?
We all agree that organizations need to make fact based decisions.  The other thing we should all be working upon is creating a common vernacular for each of the tools.  As analysts, consultants, pundits, bloggers, we do little good if we don't teach the value of how to use each of the tools.  You don't need predictive analytics for an exemption report.  You don't need a sexy looking reports that do little to explain the goal.  Organizations don't need real time scorecards.  

What organizations do need are ways to make people comfortable to take decisive action.  We also need these actions to align to company goals and strategy.  The tools we use need to be consistent enough for us to trust them, and the minds that analyze them need to be able to use the tools well enough to communicate only what matters in a digestible presentation.


Chris A Tyler said...

I had this discussion a few months back. My opinion is to look at it as 4 distinct areas including BI, Performance Management, Business Analytics and Predictive Analytics.

BI would be your base or foundation with DW, Ad Hoc, Reporting, Analysis, Dashboarding, etc.

Performance Management gets into planning where you want to be as a company in future periods, tracking KPI's against those planned targets and aligning them to business objectives while making them actionable.

Business Analytics applies intellectual capital to guide users from say a scorecard to a report to an analysis and so on to help them answer the questions they need without having to think too much about where they should go. Let the Analytical Application guide them.

Finally, Predictive Analytics applies complex, statistical calculations and predictive models to identify trends and commonalities between large amounts of data which will help in predicting future outcomes.

That's my two cents.


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