It is commonly believed that reporting and business intelligence (BI) are the same. But some think the two are vastly different. Which of these two opinions is the absolute truth? Honestly, both arguments make some valid points.
Let’s take a closer look at how the two are broadly the same yet quite different.
Reporting and BI Tools, same but different
Reporting is essentially a traditional BI platform, quite capable of presenting the facts and providing insights to businesses for making informed decisions. Much like its contemporary, Business Intelligence.
Depending on how it is used, a reporting tool is capable of churning out as much as a BI tool. But it is important to note the additional resources required to pull off this feat. The ability of a traditional BI platform to match the likes of today’s BI tools is largely dependent on factors like expertise, time, and effort thereby resulting in an opportunity cost.
What sets them apart?
1. IT Involvement & Overall Functioning
Reporting tools can range from basic to fairly advanced, based on the configuration and reporting automation, if any, carried out when the report is initially set up.
Professionals and teams are known to use a basic spreadsheet to perform analytic tasks using various functions and features present within a spreadsheet. Organizations also resort to using automated reports that are generated periodically or when a trigger is set off.
For instance, sales teams review their figures at regular intervals to gauge how close they are to achieving their targets. Operations and production teams often set internal limits for their respective deadlines which when breached can be highlighted in automated reports.
All of this may require the IT team to configure and setup these standardized reports for generation at scale, based on initial requirements expressed by the teams. In the event of a change in the business requirements, users will need to request IT to incorporate the changes to generate reports as per the new requirements. This may prove to be time-consuming and potentially hinder business-critical decision making.
If your organization has dynamic needs due to evolving business goals, your teams may need to think on their feet and make effective decisions on the fly using quick answers from the data, among other things.
For instance HR teams review updates from various sources for their manning efforts and based on the numbers, they are able to explore strategies to find and hire the best person for the job. Thus functional teams like Sales, Operations, HR, Finance, Customer Relationships, among others, need BI tools that aid data mining and exploration at lightning speed, to swiftly respond to customer and market needs.
As per Gartner’s research –
“Business Intelligence (BI) platforms are characterized by easy-to-use tools that support the full analytic workflow — from data preparation and ingestion to visual exploration and insight generation.
“They are most differentiated from traditional BI platforms by not requiring significant involvement from IT staff to predefine data models or store data in traditional data warehouses.
“The emphasis is on self-service and agility.”
2. Data Interpretation
Reporting tools generally produce data in standard formats which include spreadsheets, documents and pdfs. The data presented in these reports require further processing to interpret what the numbers are trying to say. The slightest human error in processing or evaluation is likely to produce inaccurate and misleading insights.
Conversely, AI-powered BI tools have a clear advantage. With the efficient use of Natural Language Generation (NLG) and Machine Learning (ML) these tools are able to generate visualizations and language-based narratives that enhance data literacy of users and leave no room for misinterpretation.
To know more about the challenges and solutions for improving the understanding of data look up this whitepaper.
3. End-User Business Need
Reporting tools are useful for operational and customer-facing staff who have standard data requirements and queries. However, strategists, sales and business development professionals are likely to find BI tools a lot more effective in converting data-based insights into business opportunities.
Bridging the gap with Business Intelligence Reporting
Despite differences in the needs of end-users, based on their separate functions, the gap between reporting and BI tools is rapidly decreasing. The convergence of these two capabilities is seen in BI Reporting.
A tool like Phrazor offers both reporting and BI reporting capabilities under one roof with a wide array of reports, customization and analytical capabilities available in one single tool. Phrazor is effective in generation of daily reports, giving real-time results with intuitive narratives and actionable insights from business data. It is a centralized platform for teams and users of all kinds.
While BI tools can work their way through tons of data in no time to produce critical insights, reporting tools are also able to hold their own in teams and organizations with not very demanding requirements.
It is important to know the difference between the two to identify the best solution for your enterprise.