Small businesses have a variety of questions about analytics apps and business intelligence (BI) tools. The most common of which is: Which one do we need?
And it's a great question because they're both in the same ballpark. And—thanks to the kaleidoscopic language some vendors use to describe them—both can appear to wear the same uniform. Only after a closer look does it become clear that while analytics and BI apps are in the same ballpark, they are playing different games.
Still unclear? Let's try a different analogy: The difference between analytics and business intelligence is similar to the difference between knowing the answer to one question and knowing how to find the answer to it. One solves an immediate problem; the other prepares you to solve similar questions down the road.
Still unclear? Read on below for our plain English comparison of analytics and business intelligence tools. We lay out the differences in black and white, provide some clear examples and hear from real-world small and midsize business (SMB) software users of both analytics and BI software.
Analytics applications are also called reporting tools and dashboards. While there are slight differences in how vendors describe and present them within the software UI, these three terms describe largely similar functionalities.
To help you know what you're looking at, analytics tools will typically have some or all of the following characteristics:
They report information in graphical form, often on a centralized dashboard.
They directly support business processes (as opposed to informing business strategy decisions).
To "support business processes", analytics tools are designed to present the specific information upon which that specific business process relies. In the table below are some examples of common business processes and the types of related questions which analytics tools can answer:
|Business process||Process questions that analytics can help answer|
|Make sales call to an existing client||How many units did the client purchase this week/month/quarter?|
|Determine scheduling for customer service agents||What is typical weekday volume of service requests? How many service requests does an average agent answer per day?|
|Launch a new marketing campaign||Which previous campaign has delivered the best ROI? Which email subject line has the highest open rate?|
Chances are, some of the software your business uses already provides some degree of analytics. But if employees spend too much time searching for basic data to carry out their roles, then there's a good chance that better analytical tools would improve efficiency and performance.
Returning to our baseball analogy, we're now going to throw you a little curveball. Because those reporting and analytics tools we just covered aren't actually a discrete category. They're part of a larger continuum of tools:
"In reality, BI capabilities or techniques form a continuum from the relatively straightforward (e.g., reporting) to the highly complex (e.g., the use of neural networks or self-learning algorithms)." Clarifying the Many Meanings of "Analytics" (Available to Gartner clients).
So when a SMB outgrows its analytics tools and reporting dashboards and starts looking to implement a BI tool or platform, what type of additional functionality can it expect? Generally speaking, BI tools can:
Integrate and analyze data from multiple sources.
Let employees across the organization create department-specific visualizations, reports and analyses.
Build more advanced analytics models that can answer, for example, "what if?" questions.
Provide broader, deeper insight spanning many variables, helping inform business strategy decisions.
Let's look at some common use cases, broken down by business department, to see how BI tools take analytics to the next level:
|Department||Questions BI tools can help answer|
|Sales department||What portion of customers who buy Product A come back within 30 days to buy Product B? How about products A and C? Which of these products should we consider bundling together for a discount?|
|Customer service department||What's the relationship between last month's sales volume and this month's volume of customer service requests? How many new self-service articles would we need to put online in order for our daily service request volume to drop by 20 percent?|
|The C-suite||If we extend our free trial another month, how many additional trial users will become full paying customers? Would this strategy be better supported by hiring more service agents or more salespeople?|
Now that the difference between analytics and BI is clearer, we can make a distinction between software tools that are best suited for each.
Netsuite's CRM platform includes analytics applications that are "able to integrate back-office metrics and data with front-office operations to provide upper management with a complete view of their organization."
Caption: Analytics dashboard in Netsuite CRM.
This makes it possible to track and monitor a wide range of business processes, all from a centralized analytics dashboard. As one reviewer writes:
"Since everyone in your organization is connected to the customer relationship management software, you can track each employee's workflow, task-completion ratio and progress reports."
TeamSupport is a B2B customer support platform with built-in analytics dashboards. One advantage of analytics and reporting tools over full-fledged BI platforms is their relative simplicity and ease of use. This means they're much more likely to be used by the people and departments who need them most.
Caption: Reporting dashboard in TeamSupport.
This point is mentioned frequently in reviews:
"TeamSupport is very user-friendly. The ability to organize tickets with tags, types, and owners is a tremendous value to our support team. Our Support Team particularly loves being able to insert images into our customer responses. TeamSupport reports are also really helpful and easy to use."
Highspot is a sales enablement platform that helps sales and marketing teams work together more effectively. Platforms like Highspot that connect two or more departments to help unlock the most elusive of business buzzwords, synergy.
Caption: Analytics for content performance help marketing teams track their success over time.
To unlock it for your own business, look for reviews that mention the multi-purpose value of cross-departmental software solutions, like this one for Highspot:
"My team loves this software. We are able to conduct trainings and present online content to our customers very effectively!"
Caption: A streamlined, personalized dashboard in asana showing an individual's most relevant analytics.
This can be a great benefit to individual performance and can help increase adoption of the platform across the organization. As one reviewer writes:
"Asana has amazing options for manipulating each task are incredible and are close to exactly how I would have hoped they would be. It is really laid out well visually (thanks, in part to the section headers), so, being a visual person, I can easily find the task I'm looking for, even in lists of 30 items. This has saved me a lot of time and confusion that would result in endless task list reorganizing before Asana."
Sisense is a mobile-friendly BI platform that helps companies summarize and analyze large datasets with visual and reporting features.
Caption: Lead generation dashboard in BI tool Sisense.
As mentioned above, one of the main benefits of BI software is that it lets employees with little or no background in data science create tools which are, nevertheless, based on data science. As one reviewer confirms:
"I'm a product manager, not a data scientist or linux guru. I needed a means of developing business analytics tools quickly that would meet my customers' needs. Sisense provides a platform for ETL, and web-based dashboard design that works really well."
Caption: A dashboard created with Domo showing a very wide variety of information about a company's eCommerce activity.
The best BI tools strike a balance between usability and the number of features and functions they offer. If too many features are added, the product's usability can go down, especially among less tech-savvy users. Reviews of BI tools often emphasize their usability:
"[We] introduced DOMO into our organization in 2014 and it has been instrumental in making business decisions. The product itself is intuitive, attractive, and robust. There are a number of data sources that already have API links making it easy and seamless to feed data into DOMO from other SaaS products."
Halo is a BI platform for supply chain management that collects and analyzes data from a wide range of sources. BI tools help visualize the "big picture" when other more specialized tools might only help visualize smaller components.
Caption: BI tools like Halo help visualize patterns, trends, and relationships among complex and interrelated datasets.
Additionally, since BI tools often handle larger datasets, many will include tools for data preparation and validation. This can lead to faster, more reliable results. As one reviewer explains:
"The other real benefit we experienced was the ability to import data from multiple sets of systems, integrate them into one cohesive data set, validate the data, and deliver actionable prebuilt templates for our industry."
Chartio is a cloud-based BI tool with a focus on usability. It can incorporate data from a range of formats and sources, including PostgreSQL, MySQL, Amazon Redshift, Google BigQuery, Salesforce, Google Analytics, and Twilio.
Caption: Chartio's dashboard metrics.
One final advantage of BI tools that's definitely worth mentioning: they can, on occasion, give answers to questions you never even thought to ask. Simply by giving more employees more power to explore existing data, BI tools can help uncover relationships, strategies, and metrics which had simply been overlooked. As one reviewer writes of Chartio:
"This helped us discover key business metrics we should have been watching more closely. As well as help set benchmarks to strive towards!"