These days, there’s a lot of talk going around about both business intelligence and business analytics. They both involve leveraging the data of your company in order to grow, evolve, and become more efficient. But what’s the difference between them? Often, the two terms are used interchangeably, and many people seem to disagree on what separates one from the other. So here’s a definitive, albeit brief guide to business intelligence vs. business analytics for construction companies.
The Basic Differences
Let’s start with the focus of each. Business intelligence is concerned mainly with visibility.
What is happening to your business? It collects data in order to create a clear picture of what the state of your company is currently. For example, how many days are there between potential change orders and actual change orders? What is the total contract value for one particular supplier? Business intelligence takes your data and helps you understand what it means for your business at this moment.
Business analytics, on the other hand, seeks to find out why things are happening to your business, and what will happen going forward.
For example, what if a company misses a particular milestone? Which owner is likely to pay late? Or say a particular project is 20%
above the average number of RFIs (see a cool visualization for this here). What’s the probability of a claim? Analytics analyzes data to provide you with advance notice of probable scenarios, so that you can plan for them, rather than being caught off guard.
That’s another difference between intelligence and analytics. The focus of analytics is on understanding and predicting the future of your company: spotting risks before they arise, recognizing potential growth areas, etc. It can be said that business intelligence focuses on the past in order to get a clearer view of the present, while analytics focuses on the present in order to paint a clearer picture of the future.
So how do you implement a business intelligence strategy in your company, vs. an analytics strategy? Again, there’s a fair amount of overlap: tactics as well as software platforms that you can use for either one effectively. But the key difference is that business intelligence is generally done manually, by observation and interpretation of data collected and consolidated into a data warehouse. Whereas analytics is automated: data is fed into a software application, which analyzes it to predict trends, both good and bad.
Of course, “manual” is a bit misleading. Business intelligence still relies on a variety of software applications to track key performance indicators. It uses tools such as interactive dashboards to spot KPIs within your company. You can then use those KPIs to understand and report on what’s going on throughout your organization.
Analytics, on the other hand, uses data mining to gather and sort through a much wider scope of data. Through analysis methods such as predictive modelling and quantitative analysis simulation, it can then turn that raw data into real, usable information.
Which methodology do you use: analytics or intelligence?
That depends on your company. If you’re looking to have a better understanding of your organization and its day to day operations, then you’ll probably want to try business intelligence. On the other hand, if you want to be able to spot emerging trends and have a handle on the future of your company and your industry, then analytics is probably for you. Or you could implement both, or some combination of the two, in order to understand both the present and future of your company. Whichever one is right for you, though, when it comes to the construction industry Lantern Data Systems is the answer to implementing your preferred business solution.