Key Drivers of Business Intelligence
What are the key drivers of business intelligence and why is it becoming such a focal point for organizations looking to transform digitally?
For executives and decision makers, the need to digitize their processes becomes more pronounced as the competitive advantages that can be accrued from implementing solutions like business intelligence.
In this blog post, we’re going to be looking at what the key drivers of business intelligence adoption are and what it means for companies today.
Growth of Business Intelligence Market
The global market for business intelligence has grown significantly in the last few years alone and is expected to grow to a substantial degree in the next five years.
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%.
In 2018, the market was worth $14.3 billion, demonstrating the enormous growth potential of BI solutions.
Adoption of Business Intelligence
Adoption of BI solutions among all businesses has risen in virtually every industry.
BI adoption is greater in larger enterprise organizations—with an adoption rate of 80% among companies with more than 5,000 employees.
In small and midsized businesses, that figure is 26%, suggesting that SMBs have a long way to go in catching up to their larger counterparts.
In addition to this, just 20% of businesses considered their work environments to be data-driven last year. However, 70% of business leaders agree that analytics has changed their industries in at least a moderate way, and 54% of them say that business intelligence is either “critical” or “very important” to their current and future strategies.
In short, organizations of all sizes are adopting BI with increasing frequency, with many seeing its analytical capabilities as essential to their business goals and the more effective leveraging of data as important to future initiatives.
Key Drivers of Business Intelligence
Now, let’s look at the key drivers of business intelligence and what’s behind them.
Tech Drivers
When it comes to technology needs driving the adoption of business intelligence, there are some clear commonalities between organizations as a whole that appear to be pushing the growth of the market.
Firstly, there is a frequent desire among businesses to adopt business intelligence for its technology capabilities and what it can provide in terms of analytics capacity.
As reported in BARC’s Data, BI & Analytics Trend Monitor 2021, data discovery, self-service analytics, and real-time analytics were all cited as among the top 10 ranking trends between 2017 and 2021.
What this tells us is that organizations are holding in particular regard the need to implement BI because it allows decision makers more control over leveraging data (often unused or underutilized), the ability to study analytics without any additional help, and to be able to do it all instantly in real-time.
As companies continue to recognize the importance of BI as a tool to inform their business decision making across all lines of business, these specific use cases for BI solutions will continue to be a driver for implementation for years to come.
Data-driven organizations are 23 times more likely to acquire customers, six times more likely to retain customers, and 19 times more likely to be profitable than non-data driven peers.
What’s also significant is the fact that these trends have persisted over a long period of time as key drivers as reported by decision makers and executives, suggesting their long-term significance with regard to driving BI adoption.
Related Post: What Do Business Digitization Strategies Look Like Today?
Business Drivers
Business drivers for business intelligence adoption among organizations have long been the biggest forces pushing the growth of the industry and show no sign of letting up.
In the simplest terms, rather than specific tech use cases being the primary drivers of adoption, the desire to modernize organizations in terms of how they are structured from a data and analytics standpoint is more often than not the guiding influence in driving BI strategies.
Take data quality management as an example.
DQ management has been the number one ranked trend in BARC’s studies in the period 2017–2021, and not for no reason.
Businesses understand today that a company that can make efficient and effective use of the data and information they possess will gain a significant competitive advantage over other companies.
Data is incredibly pervasive is business today, yet very few organizations have the infrastructure in place to be able to leverage it well.
A study by Gartner found that more than 87% of businesses were classified as having low business intelligence (BI) and analytics maturity.
This is why DQ management is the first priority for the majority of businesses today, and it’s also why other trends, like a data-driven culture, data governance, and data warehouse modernization are all in the top 10 trends relating to drivers of business intelligence.
NewVantage found that just 27% of businesses in 2020 consider their work environment to be “data-driven”, with 73% citing big data management as an ongoing challenge for their operations.
In short, businesses are acutely aware that they need to update their processes and embrace technologies that will facilitate the kind of data-driven organizations they seek to become.
Financial Drivers
Technology is often implemented in an organization for better efficiency and to improve a company’s bottom line, and business intelligence is no different.
In this regard, the adoption of business intelligence and a primary driver of BI in companies is the return on investment they hope to see from the better utilization of data.
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%.
For the most part, organizations can expect to see improvements in their ability to leverage the information they have available to them, whether it’s regarding their customers, products, or internal processes.
Around two-thirds (64%) of business intelligence users report that the use of BI and analytics technology has improved their efficiency and productivity, with 51% saying that implementation had led to better financial performance.
When you consider the improvements that can be made to virtually any operational process within a line of business—and with improved efficiency being a key factor in BI adoption—the reward that can be reaped financially is a key driver for beginning a business intelligence program.
This is especially important for SMBs—many of whom are aware of the potential benefits of BI adoption but who are reticent to dive in because of the perceived costs of implementation.
It’s for this reason that cloud-based platforms from large providers—particularly Microsoft Azure, Amazon Web Services, and Google Cloud—have seen large amounts of buy-in from smaller businesses that need the analytics capabilities but cannot invest in an onsite data center.
The scalability of platforms like these provide SMBs with a genuinely flexible option for adopting advanced BI and analytics in their organizations.
Bottom Line
Business intelligence is a significant and disruptive part of the business tech landscape today.
By leveraging data and information effectively, companies can substantially improve their operational capabilities, become more data-driven, and more competitive as a result.
Adoption of business intelligence is typically driven by the three key factors we’ve looked at today—the desire to be more advanced from a tech standpoint, the need to make better use of data for operational purposes, and the improved productivity that can be reaped from BI implementation.
As the need and necessity for SMBs to utilize their data in order to remain competitive grows, so too will BI adoption, and more specifically cloud-based solutions that can offer the kind of scalability that smaller enterprises require to invest in BI solutions.
If your business is in need of data analytics adoption but you don’t know where to start, you’ve come to the right place. Learn everything you need to know about what business intelligence and analytics services can do for you.