3 main outcomes of analytics and business intelligence
I feel that for the past few years Data Analytics and Business Analytics have turned into those buzzwords which everyone is using, but with different meanings. Not to mention the never ending questions and debates on: “How is Business Intelligence (BI) different from Data/ Business Analytics?”, “Is Data Analytics a function of BI?”, “Is BI looking at the past and Analytics looking into the future?”, or “Is Business Analytics a term which covers both Data Analytics and Business Intelligence?” – by the way, these questions provide another case of a need for data governance.
So what do all mean? Everyone has their own opinion and there’s no absolute truth. It remains a matter of perspective, but regardless what the perspective is, make sure it is well defined and understood. The topic of this article is not to go into this debate, but to provide a breakdown of the 3 main outcomes of the Business Intelligence, Business Analytics, and Data Analytics umbrella.
Do you want to learn more about BI? Here are the 10 components of the Business Intelligence landscape.
The reality is that this combined trio produces and harnesses information and knowledge to enable an organization get more insight, hindsight, and foresight, based on the data it has access to.
Let’s go into the detail of these 3 “-sights”:
Insight refers to our traditional reports, those we are all accustomed to. Reports which tell us the current or former status of our data. This insight answers questions such as:
- How is the organization performing?
- How much revenue did we incur?
- Where do our constituents live?
- How much funds did we raise?
- What is the average patient discharge rate during weekends?
Reports providing insight are valuable, but they mostly offer an operational perspective. Some are used to inform strategic decisions, but they don’t always provide the full picture as to why the numbers and outcomes are the way they are.
Hindsight to the rescue! This second outcome of the Analytics & Business Intelligence umbrella provides the analysis needed to understand why we have the current numbers we do – and no, I’m not referring to the underlying data quality, but rather, what were the factors, the environment, and decisions which impacted the outcome of these numbers.
It answers questions such as:
- Why are we performing this way?
- Which investments proved to be successful?
- What are we learning from the results of A/B testing?
- What customer factors affected the sales outcomes?
Hindsight also determines and provides knowledge and understanding of the context.
The third outcome is about foresight. This showcases the true value of analytics, depending how you define it, because through the exploration of historical and live data and application of different statistical, data mining, predictive, and other analytics’ methods, it provides us with a better understanding of the future and the potential paths to follow. It answers questions such as:
- How will the organization perform in the future?
- How can we gain a competitive advantage?
- What effect might certain changes have on our bottom line?
- Where will most alumni move to one year after graduation?
- Which customers are more likely to purchase?
- What impact will the next flu season have on the respiratory clinic?
Each one of the three outcomes brings in different benefits, but they are also interconnected. In the end, if you don’t have insights, you have nothing to base a hindsight or foresight on. Though, from a strategic perspective, the value which foresight provides is larger than the one gained from hindsight and insight. Which one do you mostly focus on?