What's up with business analytics and business intelligence?
As the Dragon year commences, Singapore has awakened to the roar of Business Analytics. Identified as
a focus sector development by iDA, to catalyse greater adoption, business analytics is an area of untold
Enticing prospective adopters with possibilities of uncovering previously hidden insights,
capabilities and more imperatively – the ability to enhance the process of decision making. Thus, moving
away from gut-feeling, which currently is often the basis for important and sometimes critical decisions
by senior executives and managers.
Don't blindly follow any Pied Piper
However, many find the meaning of business analytics as persistently mystifying as that of Sheldon’s
Bazinga. What is Business Analytics, exactly? How is it different from Business Intelligence?
Due to this ambiguity, it is no wonder that there are those who question whether this is just another marketing propaganda trying to pitch what is already in place. Especially as there are, as always, those who jump the BA wagon purely for the sake of being with the cool kid on the block.
In order to disambiguate and provide clear definition we take a step back in time and touch on the
previous hype – Business Intelligence.
Business Intelligence was an umbrella term originally introduced to capture all the possibilities that
are to be achieved using the data collected within an organization.
From the consolidation of data, the automatic generation of insights (intelligence) and the creation of various reports that summarized and conveyed information from the consolidated data and generated insights. It is not uncommon to have Business Intelligence and Business Analytics assumed to refer to the same concept.
However, due to the majority of business challenges, at-the-time of the introduction of business
intelligence, revolving aspects of data consolidation, data management and data reporting
the ‘Intelligence’ in business intelligence never got implemented from a system point of view.
The intelligence within business intelligence was naturally and automatically supplemented by the domain expertise of the system users, who interpreted the various reports. Business Intelligence thus had, ironically, become synonymous to data management and reporting.
The key message is that business analytics aims to bridge the system intelligence gap, lacking in business
intelligence systems, by introducing data mining capabilities to provide system generate intelligence
based on automatic analysis of the available data.
From a terminological sense, if these data mining capabilities (not mere databases queries, but those leveraging on ‘machine learning’ and statistics) are not present than the system in question is not, or does not include, business analytics.
``There are known knowns. These are things we know that we know. There are known unknowns. That
is to say, there are things that we know we don't know. But there are also unknown unknowns. There
are things we don't know we don't know." -- Donald Henry Rumsfeld
Do you know what you do not know?
Dr. David R. Hardoon, Principal, Analytics, SAS Singapore