Business Intelligence (BI) is a set of processes, technologies, and tools organizations use to turn data into actionable insights and make data-driven decisions. On the other hand, BI has become increasingly important for organizations looking to stay competitive in today’s data-driven world with the 2 types of business intelligence tools.
2 Types of Business Intelligence Tools
What are business intelligence and analytics? Business Intelligence or BI deals with a crucial aspect of modern organizations. Furthermore, to make data-driven decisions, companies need to turn data into actionable insights. So that is how BI tools come in, and they can be broadly categorized into two main types.
According to the type of BI, there are two main types of BI tools: descriptive analytics tools and predictive analytics tools.
1. Descriptive Analytics Tools
The first type is descriptive analytics tools. However, this type provides a summarized view of historical data used to answer the “what has happened?” These tools produce reports and dashboards to offer understanding of past performance, patterns, and trends.
Therefore, descriptive analytics tools are typically used to analyze large amounts of data, identify patterns and trends, and visually present information. However, it also makes it easier for stakeholders to understand and act on.
There are some examples of descriptive analytics tools that you can use, including reports, dashboards, data visualization tools, and online analytical processing (OLAP) tools.
2. Predictive Analytics Tools
On the other hand, the different 2 types of business intelligence are predictive analytics tools. This type uses statistical models and algorithms to make predictions about future events and used to answer “what could happen?”
These tools analyze data, identify patterns, and use those patterns to predict future events. However, predictive analytics tools aim to improve decision-making by providing insights into what may happen in the future. Organizations use this information to make better decisions.
In addition, predictive analytics tools functionally identify potential risks and opportunities. Moreover, it can help organizations take proactive measures to mitigate risks and capitalize on opportunities.
You can use business intelligence tools examples of predictive analytics tools, including data mining, machine learning, and artificial intelligence.
Therefore, those 2 types of business intelligence tools play crucial roles in helping organizations make data-driven decisions. Furthermore, descriptive analytics tools provide insights into past performance, while predictive analytics tools provide insights into future performance.