Reporting and business intelligence can both be of critical importance to a company today. After all, it’s often said that in the past we adopted technology to aid the business (or perished along the way), whereas today, we are all technology companies. So let’s take a quick look at a few key distinctions between these two entities.
A Washington D.C. company called T3 Information Systems offers the following two definitions which seem to fit the bill nicely:
Reporting refers to an account or statement that describes in detail an event or situation. The purpose of reporting is to give a detailed status update of a situation.
Business Intelligence (BI) refers to technologies, applications and practices for the collection, integration, analysis, and presentation of business information. The purpose of Business Intelligence is to support better decision-making in business.
Reporting is mostly concerned with what happened in the past (recent or otherwise) or with the current status of things (i.e., sales, receivables, inventory). Aging reports, sales analyses, customer ledgers and income statements are examples of reporting.
Business intelligence, on the other hand, is concerned with what has happened so far, or what exists in our repositories of data, that can be used to effect and improve future business performance.
3T explains BI simply as… Business Intelligence is built using multiple sources of data, giving the user the ability to cross-analyze and explore relationships that may not have been previously considered. The main goal of BI technology is to be flexible and open to discovering new insights.
An easy-to-understand example of a real-life business intelligence situation would be discount cards. Stores use discount cards to track customer purchases and targeted marketing campaigns. Business intelligence then analyzes and explores this data to inform future decisions.
In short then, business reporting is about status updates, past and current. BI is about making future decisions. They involve different tools (a topic for another time) provided by an ever-increasing range of software vendors. In some respects, it’s fair to say that one is intended to pick up where the other leaves off.
Yet you need both — eventually. It’s just important to recognize the distinctions, and to decide for yourself when you need more than just reporting. Then you can start exploring your options.