If You Aren’t Investing in Analytics, You’re Behind the Curve

May, 2018

Companies are investing in their bread-and-butter core systems at a strong rate, but one technology leads the pack this year: business and data analytics. These solutions are now the highest-priority for new investment dollars for IT organizations.

As seen in Figure 2 from our full report, Business and Data Analytics Adoption and Customer Experience, the percentage of organizations investing in analytics (the green bars) has spiked significantly, rising from just 37% in 2015 to 66% in 2018. The adoption rate (the blue bars) has also increased, rising from 48% in 2015 to 55% in 2018. However, the adoption rate has been relatively flat the last three years. The sharper increase in investment compared to adoption shows that companies already invested in business and data analytics are continuing to increase their investments.

Analytics fig 2 - If You Aren’t Investing in Analytics, You’re Behind the Curve

Business and data analytics refer to a broad range of tools to collect, store, integrate, analyze, and present information that supports decision-making. Our definition of this technology includes data warehouses, data marts, business intelligence, predictive analytics, data mining, dashboards, online analytical processing (OLAP), end-user report writers, and big data.

“I expect the growth trend to continue,” said Tom Dunlap, director of research for Computer Economics, based in Irvine, Calif. “Investment in analytic tools tends to beget more investment, because once  managers see how analytics can help them in one area of the business, they want to expand the efforts in other areas. If analytics vendors can deliver on the promises of the next steps—the inclusion of artificial intelligence and machine learning, for example—then there is no ceiling for these solutions.”

In recent years, business and data analytics systems have moved from strategic applications to operational applications, sometimes extracting data directly from transactional systems such as ERP and CRM systems, combining it with external data, and delivering operational metrics deeper into the organization. Typical applications of business and data analytics systems help top managers identify spending trends, detect fraud, and lower the cost of marketing campaigns. They also can be used to alert customer service representatives to upsell opportunities, among many other applications.

The full report examines adoption trends for business and data analytics technology of all types, providing insight into how many organizations have the technology in place, how many are implementing it, and how many are expanding investments in new capabilities. We also recommend steps for a successful implementation.

To give additional insight, we look at the economic experience of those that have adopted the technology. We examine the return on investment (ROI) experience in terms of the percentage of organizations that report positive and break-even ROI within a two-year period. We also balance the potential ROI against the risks, measured in terms of the percentage of organizations that exceed budgets for total cost of ownership (TCO).

This Research Byte is a brief overview of our report on this subject, Business and Data Analytics Adoption Trends and Customer Experience. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website (click for pricing).