What Does “Business Analytics” Mean?

If you’re as old as I am, you’ve seen a lot of different names for the idea of using data and analysis to better manage organizations. First it was called decision support systems (DSS); then executive information systems (EIS); then online analytical processing (OLAP); then business intelligence (BI). It now appears that yet another term for this concept is growing in popularity. The new label is “business analytics.”

Is “business analytics” the new name for “analytics,” or for “business intelligence” more broadly? Is it a good name? What does it mean?

In the past, business intelligence was an umbrella term that included both reporting on data and analyzing it with statistical and other quantitative approaches, although reporting was certainly the bulk of the activity. Hence the more recent need for the term “analytics,” which was more focused on quantitative analysis. I’m getting the feeling, however, that “business analytics” is the new BI. Both traditional reporting vendors (IBM/Cognos, Oracle, SAP/Business Objects) and traditional analytics vendors (SAS, IBM/SPSS) seem to be using it to describe what they do.

If it’s the new “big church” word, then, business analytics can be defined as the broad use of data and quantitative analysis for decision-making within organizations. It encompasses query and reporting, but also aspires to greater levels of mathematical sophistication. It includes analytics, of course, but let’s assume that the term “business” involves harnessing the analytics to meet defined business objectives. Business analytics enables people in an organization to make better decisions, improve processes and achieve desired outcomes. It brings together the best of data management, analytic methods, and the presentation of results.

Some might object that “business analytics” is not a good term for all BI activity because it excludes governmental and nonprofit organizations. But it doesn’t have to. The meaning of “business” here could be that of “an immediate task or objective,” with analytics being a means to achieve that objective. Governmental and non-profit organizations can use business analytics to advance their objectives as well, and in fact many do just that.

Of course, new terms have their consequences. Next time I’ll describe some of the possible ones for “business analytics.” Overall, however, I think it’s a perfectly acceptable name for what it describes and for this website!