Business Intelligence & Predictive Analytics: Are They Different?

March 17, 2023 - Aptaworks

Both business intelligence and predictive analytics are immensely popular terms within the growing tech industry. Both are used to make more informed business decisions using past company data. So, are they actually the same?  

Read on to find out! 

What is Business Intelligence?  

First, let’s look at what business intelligence (BI) is all about. To improve decision-making across departments, BI makes use of a company’s historical data and turns them into valuable insights that can map out past business performance and consumer trends. 

When a company performs business intelligence, there are four types of data analytics that can be employed in its strategy: descriptive analytics, diagnostic analytics, predictive analytics, and prescriptive analytics. 


Descriptive Analytics  

Descriptive analytics is the foundation on which other data analytics types are built. This type of analytics studies patterns from raw data to make sense of what happened or is currently happening. 

It answers questions such as “How was employee productivity during the holiday season?” and “Which product line has the most loyal customers?” 

Diagnostic Analytics 

Diagnostic analytics deals with why things happened. It compares patterns found in data sets and looks at their correlations to determine the type of relationship shared. 

Diagnostic analytics answers questions such as “Why was there a surge of sales for product A in January?” and “Which factors caused employee turnover?” 

Predictive Analytics 

Predictive analytics determines what is likely to happen in the future by analyzing a company’s historical data. It might involve machine-learning algorithms depending on the scale and type of information needed. 

Predictive analytics answers questions such as “When are our machines likely to malfunction?” and “How many visitors are expected to show up in the next holiday season?” 

Prescriptive Analytics 

Lastly, prescriptive analytics addresses which actions should be taken based on insights gained from descriptive, diagnostic, and predictive analytics. 

It answers questions such as “Should we invest in Company A or B?” and “Which contents should show up on this user’s landing page based on their interests?” 


Business Intelligence vs Predictive Analytics  

While predictive analytics is a part of business intelligence, not every business intelligence strategy involves predictive analytics. It is however highly recommended to marry business intelligence with predictive analytics so you can optimally make use of your company data and prepare for future events. 

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