The Future of Business Intelligence
The future of business intelligence is something that many executives and decision makers are closely following.
Is it a tech fad or is it here to stay? What will it look like in the future and how important a role will it play in organizations going forward?
For SMBs in particular that are operating on tight budgets, it’s imperative for them to know whether they need to invest in business intelligence technology in order to stay competitive or if it’s not entirely necessary for their business’ success.
In this blog post, we’ll be looking at the future of business intelligence, uptake among organizations, its necessity, and the tangible benefits or lack thereof for companies today.
Business Intelligence Market
The market for BI tools bodes well for the overall direction of the business intelligence market, which is expected to double over the next five years alone.
The business intelligence market in 2020 was valued at $21 billion. In 2026, this figure is expected to grow to $41 billion at a CAGR of 12%.
Back in 2018, the market was worth $14.3 billion—just under 70% of its value in 2020.
The substantial growth that the market is seeing is being driven largely by uptake from large and small businesses alike—though many SMBs are, generally speaking, lagging behind.
If current trends continue, as seems likely, the market will grow further as business intelligence services become a more central component in the operations of organizations of all sizes.
The Future of Business Intelligence Adoption
Why are SMBs lagging behind in business intelligence adoption compared to their larger counterparts?
As with many new technology advances in the business world, it’s often large enterprises that have the resources to put towards adoption efforts, and this has proven true with uptake in business intelligence.
Globally, adoption of BI across all organizations is around 26%. With organizations that employ more than 5,000 staff, the percentage jumps to 80%.
Much of business intelligence adoption is concerned with the role of analytics and big data—primarily the leveraging of these two things to improve business processes and results through data-driven decision making.
In 2020, only 27% of businesses considered their work environment to be data-driven, but over half of organizations say cloud business intelligence is either critical or very important to their initiatives.
When you further consider that 70% of business leaders agree that analytics has changed their industries in at least a moderate way; there does appear to be a clear understanding that BI is both a big disruptor in business and something that is recognized as an important component of business operations.
A report published in early 2021 found that business intelligence was fast becoming a mainstream offering, with 41% of BI vendors reporting an increase in customer requests for data and analytics software adoption.
There is a clear movement towards business intelligence adoption among those yet to fully invest in BI, with many planning initiatives over the short- to medium-term.
As BI tools and technologies become more available, more affordable, and more mainstream it is likely adoption will grow significantly, particularly as it concerns cloud offerings.
What Will Be the Key Drivers of Business Intelligence Adoption?
The most significant aspect of business intelligence that is driving its widescale adoption is its use in aiding decision making.
BI can be used across every department in a business, whether it’s marketing, logistics, or HR, meaning the technology is flexible and widely pertinent.
In effect, businesses are more comfortable investing in BI because it’s applicable across their entire company, and while it will naturally be more useful to some stakeholders than others, its uses as an aid to decision making is ubiquitous.
61% of IT teams have seen an uptick after applying business analytics; marketing leaders have seen a 44% increase; R&D 39%; software development and finance 38%; sales 37%; and operations 35%.
Cloud Platforms Are Surging In Popularity
The use of analytics in business is today for many a necessity—it’s also the case that the technologies required to achieve a substantial level of analytics capability within business operations are significantly more affordable and easier to implement than in previous years.
This is in large part due to the use of cloud data centers to provide software-as-a-service offerings to SMBs.
SaaS is today the most prominent method for businesses to adopt new technology and is especially popular among SMBs because it doesn’t require on-premise servers and can be scaled with far more flexibility.
A 2018 survey indicated 64% of ERP software was delivered via SaaS through the cloud, followed by 21% using cloud ERP on dedicated private servers, and finally just 15% using more traditional on-premise servers for their ERP.
Analytics Will Continue to Drive Business Intelligence Use
Related Post: The State of Data Analytics Adoption
Despite all these gains for the business intelligence in recent years, analytics maturity among many SMBs remains surprisingly low.
87% of businesses were classified as having a low level of analytics maturity in a study by Gartner, while NewVantage found that only 27% of businesses in 2020 considered their work environment to be “data-driven”.
While this could well be an indication of the greater aspirations of businesses, there is a clear trend that many organizations are still using a lot of technology in a rudimentary way.
At the same time, businesses have a clear understanding of the necessity of implementing business intelligence solutions for their initiatives, suggesting investment in BI tech will continue to be a priority aspect of digital transformation over the next few years at least.
Over half (54%) of all enterprises say cloud BI is either critical or very important to their ongoing and future initiatives.
Future Business Intelligence Adoption In Business
Establishing a data-driven business is today seen as critical to large companies and SMBs alike.
While adoption of cloud BI tech is high, making use of data to ensure it is of good quality, is accessible, and actionable is something that’s generally proving more difficult for businesses to succeed at.
This is largely an issue of data integration rather than business intelligence itself.
As organizations pour more of their efforts into making better use of their data, BI will play an increasingly important role in the leveraging of this information.
Bottom Line: Future of Business Intelligence
Business intelligence and associated analytics and AI solutions have seen a drastic increase in uptake among organizations over the last three years alone.
This increase is the result of several factors—most significantly is the recognition that utilizing data and analytics in an effective way is a key competitive differentiator for organizations today.
As businesses continue to embrace a data-driven approach to their operations, the need for business intelligence tools will only increase, as shown by the enormous growth of the market.
The future of business intelligence is highly likely to continue this rapid growth until it is an integral part of almost every company in the country.
Subscribe to our blog to receive monthly insights into business technology and stay up to date with marketing, cybersecurity, and other tech news and trends.