Industry analysis from Informance: Digging the data mine
This article was also featured as an industry analysis in the April 2016 issue of Briefing. To read the issue in full, download Briefing.
The business intelligence market has shown extremely good growth in the last decade, and this is expected to continue beyond 2020. The shift from IT-delivered business intelligence, with few users and long project timescales, to a more modern, self-service approach delivered by the business began back in 2005 – and it continues. Most traditional BI vendors are losing market share to newer, more agile self-service BI vendors – this trend is shown in Gartner’s most recent BI Magic Quadrant.
The total BI market has grown, from US$6.5bn in 2005 to US$20.1bn today. This growth reflects the many changes that have taken place in the market, including the new technologies that are being used to drive both change and business transformation.
But in spite of the growth, statistics make for some concerning reading. Forrester reports that 64% of business and technology decision makers have difficulty getting answers from their dashboards, and 60% have concerns about how long it takes to create and update them. These concerns are driving vendors in the direction of self-service discovery tools that are easy to deploy, yet still give IT the ability to ensure the data used is well governed. Some vendors have achieved this, but most are still trying to get to this point.
Most business sectors have come to terms with the fact that some big changes are needed to achieve a quantum leap in the fortunes of an organisation. These changes mostly come from companies growing and finding they have to change their processes to make it easier to do business. But they can be very expensive to make. Consider what it costs to replace an ERP or PMS today. Depending on the size of the organisation, it could run to several millions of pounds. The legal sector, however, seems to struggle to make the investments needed to improve the way it does business. This reluctance is sometimes difficult to comprehend, but this article assumes that these decisions can, and will, be made.
In 2006, Clive Humby said “data is the new oil”. A lot has happened since then. Many companies have created positions for data analysts that are uncovering amazing insights into data. When this is combined with other datasets, such as weather even, further insights enable faster decisions to be made. Ten years ago, business decisions were based on data that was one month old. Today, most companies have to make decisions every day based on insight that is immediate because the data is available.
All organisations are exposed to some massive macro trends to a greater or lesser extent. For example:
• We’re recruiting a new generation of people who have demanding expectations of technology. They arrive at the corporate doorstep with the expectation that work apps will perform intuitively. People expect to work in a technology-enabled environment, but the fact is that their experience at home is often superior to the one at work.
• Technology is encroaching on everything we do. Today, most companies are meeting their quarterly earnings targets by paring costs to a bare minimum. Highly integrated supply chains make it possible to reduce inventory-carrying costs to near zero. It’s a worthy and cost-effective goal. But unfortunately, a production hiccup in China or Japan can very quickly halt production and lead to empty shelves in Amsterdam or Cincinnati. We live in an interconnected world where volatility in one region may have a devastating effect in another if we can’t respond quickly enough.
• At the same time, product lifecycles are compressed. In a cell phone industry formerly addicted to two-year contracts, new products are released on a two-week cycle. The fashion industry – accustomed to operating on the basis of four seasons per year – is adjusting to instant change.
• The internet has produced transparency. Consumers can scan a bar code and find the lowest price for a product online, or within a 10-mile radius. Buyers in all industries can see and evaluate the competition with a few clicks or keystrokes. There are no secrets and few advantages that remain unseen.
We need flatter organisations with fewer layers. But with fewer layers, organisations need strong cultural values that allow people to make hundreds of faster micro-decisions without having to be told what to do. The reason is simple. In the time it takes to obtain permission to act, too often the opportunity is lost. And when thousands of people miss thousands of opportunities, companies die. We must empower our employees with the information they need to make the smart, accurate, timely decisions that are so essential.
At the centre of dealing with all of these shifts is data and how we take advantage of it.
What we do with data is what enables business to take a quantum leap forward. Law firms, for example, can empower people to see and react to key performance indictors that show a negative deviation from target.
Having access to such data changes the world in which we work on a daily basis – and if managed correctly, can add thousands, if not millions, to the bottom line.