Businesses today have the advantage of accessing vast amounts of data. This data comes from different sources, but it’s useful to business operations. Various departments can leverage it to create better products, improve customer service or segment the market better.
The type of decisions a business owner wants to make can be affected by how fast they use the data available to get insights. They may use the data when it is still fresh or wait for a few hours or days to analyze it. This makes the main difference between operational BI and strategic BI.
The main differences between operational BI and strategic BI
Both operational BI and strategic BI are closely related. They leverage the same data sets to help various business departments get business insights. Nevertheless, they have major differences.
Leveraging on fresh data versus historical data
Operational business intelligence leverages fresh data. Business managers analyze the data for business insights while it is still fresh. There is an advantage when a business leverages on fresh data because it can act on situations when they are still happening and take advantage to make a sale, correct an error, or improve on service delivery.
On the other hand, strategic business intelligence doesn’t leverage fresh data. Instead, various business departments wait for some time to analyze the data collected. The time waited can be an hour, several hours, or days before analyzing it. It depends on what they want to use the insights for or the person/department that wants the insights.
If a business is operating in an environment with high competition, operational business intelligence can help it stay above the competition. The managers only need to take quick action on the ideas they get during data analysis.
If a business is operating in an environment that has no stiff competition, strategic BI can help managers create strategies that will drive it into growth.
Use of operational data versus analytical data
The use of data in businesses helps business managers make decisions that help their various departments operate better. They become more efficient, which helps improve service and save running costs. In the same way, the use of robotics in businesses helps enhance productivity, efficiency and lower production costs.
Under operational business intelligence, reporting is done from data generated from its transactional processes. The data can be retrieved from the business operational data store and analyzed for insights.
This is the data generated during business hours. Operational business intelligence analytics are closely connected with the usual processes of a business. Business owners require to use data analysis tools that can analyze every data the moment it is generated. This is the best way to make the analysis reports useful to the business.
On the other hand, strategic business intelligence is related to analytical data sources. The data analysts wait until the data rests in the data mart, data warehouse, cloud, or wherever the business data is stored. After some time, the data is retrieved for analysis to give the business different levels of insights.
Operational decisions versus strategic decisions
Another main difference between operational BI and strategic BI is the use of the insights received from the analyzed data. Since operational BI leverages operational data, the results generated must be acted upon at the very moment.
Due to this, the business management might not be able to make a quick decision if it might majorly affect business operations and its future stability. Operational BI is used to make a decision related to daily business operations. Business managers use it to help them monitor daily organizational operations.
There could be a problem with product delivery or an error at the production lines. Errors may also occur at the billing system, or a wrong post can be posted on the marketing platforms. These are errors that could significantly affect daily business operations.
If they are detected through operational business intelligence, the management has to act at the very moment. If nothing is done fast, the problem can escalate and affect the business relationship with its customers.
Apart from short-term operational decisions, business managers also need to make concrete long-term decisions. These are decisions that will help the business move fast towards achieving its vision.
Strategic BI leverages historical data contexts that reflect historical business operations. Business managers use the data to know its strengths and weaknesses. They can know where they are going wrong or when they are doing things right.
Using these statistics, the business managers can forecast both the near and far future. They use insights from strategic business intelligence data to set major business goals, do strategic planning, and take the business in the right direction.
Operations BI results and strategic BI questions
The results of operational BI data analysis benefit every department in real-time. It gives time-sensitive and relevant insights applicable to each department’s current operations. Some of the major beneficiaries are operations managers, front office personnel, and marketers. The reports directly support business operations.
The operational BI analysis report can include the following.
- Shipment success
- Invoices and receipts
- Bank statements
- Marketing lists
- Schedules for meetings
Strategic BI first leverages big data that is collected from multiple sources and stored. It is optimized for use in analysis and fast reporting. From the report, key issues that are driving the business forward are identified. This helps answer several questions.
- Identification of the highly valuable clients
- The best price tags for products
- The cost of customer acquisition
- Clients’ segments that are likely to order more
- Geographical regions recording best growth
These are questions that generate answers from strategic business intelligence analytics. From the answers they get, business managers can set new prices for products. They can either increase or lower the prices depending on the insights they get.
They can increase the marketing budget to venture into new markets if the return on investment shall be worth it. They create rewarding strategies for the most valuable customers.
The marketing department gets insights on which regions to focus more on to bring new customers and to sustain the existing ones. These insights can also be used to help the business launch its digital transformation strategies.