Operational Intelligence and Business Intelligence: What’s the Difference?
In the world of data analytics, there is a lot to digest. Today’s organizations have vast amounts of data at their fingertips to help inform a broad range of business decisions. From marketing to consumer data and detailed insights into the competition as well as the wider marketplace, businesses are becoming more intelligent by the minute.
Even with the potential to access, leverage, and analyze all this data, there is a division in the types of data you should be aware of. Business intelligence (BI) and operational intelligence (OI) are based on the same data sets with one major difference: OI is measured in real-time, meaning that the insights you gain have relevance now – as opposed to BI, which may have a lag of several hours—or even days—depending on how and to whom the insights are being delivered.
As you can well surmise, operational intelligence has the edge when it comes to you getting the jump on the competition. And, if you are already leveraging BI in your organization, you are well-equipped to take advantage of OIs significant benefits.
What is operational intelligence?
The origins of operational intelligence can be traced back to military operations and to a strategist and US Air Force fighter pilot named John Richard Boyd. Boyd’s key concept, as it relates to OI, was called the OODA loop, (observe, orient, decide, act), a decision cycle that was applied to combat operations and a process that favors agility over brute strength in dealing with an adversary.
Today, this concept has evolved into operational intelligence and has been in common practice in areas that include litigation, law enforcement, the military, and in business, where it can be described as immediate business intelligence gleaned from your ongoing operational functions. As it is delivered in real-time, OI enables your stakeholders to take immediate action and strike while the proverbial iron is hot.
Some of the common uses for operational intelligence in data-driven business operations include:
- Delivering product recommendations to an online shopper
- Alerting IT to potential problems or imminent system downtime
- Predicting and preventing cyber-attacks
- What is the status of an item or part right now?
- Or any data-driven task that requires immediate action or attention
Why you need OI … and BI
BI has driven efficiencies and greater profitability in just about every industry. It integrates with enterprise systems to provide context between historical data and current operations with regard to business goals. BI focuses on data events that affect the bottom line, meaning that stakeholders gain insight into where they are gaining and where they might be leaving money on the table. All good.
What BI doesn’t do, however, is give enough insight into operational data. Today’s businesses often leverage multiple sales channels to achieve their objectives and with changing regulatory environments and all kind of disparate networks, suppliers, vendors, and data sources, managing the business environment become much more complex and difficult to manage.
Operational intelligence, essentially, closes the loop between events that have happened in the past and those that are happening now, providing decision-makers with a major advantage in the effort for market domination.
Of course, OI does not eliminate the need for BI. Your team will still need the reports and analytics that BI delivers so that they can affect change within and throughout the organization.