CIOs will increasingly draw on BI, analytics outsourcing firms to help deliver timely business insights to users, says U.K. technology research firm.
Big Data Analytics Masters Degrees: 20 Top Programs
(click image for larger view and for slideshow)
In 2013, we will see a steep rise in outsourced data analytics services as CIOs seek help in providing timely, decision-supporting insights to business users.
This is the conclusion of U.K.-based technology market research firm Pringle & Company in an extensive new report, "Business Intelligence Software & Services Market, 2012-2016."
The research, conducted in the fourth quarter of 2012, suggests that the market for services provided by business and technology consultancies to develop and implement the systems required to generate data insights, is growing at a compound annual rate of more than 15%. The global market for these services will almost double over the next four years, from an estimated $54.5 billion in 2012 to $96.9 billion in 2016, according to the Pringle & Company report.
The overall business intelligence and analytics market, made up of both software and services, was worth $79 billion in 2012, and will now grow at a rate of approximately 16% annually to reach $143.3 billion in 2016.
Although enterprises have been grappling with big data headaches for years, the recognition that CIOs need external help to deliver rapidly accessible business insights to everyday users is new. "Across the whole spectrum of business intelligence, analytics is the area of most interest at the moment," said Tom Pringle, author of the report. "While organizations have always been interested in understanding operational performance, CIOs are now seeing more business-led demand -- from the board level down to individual business heads ... to extract new insights from the data that will allow them to experiment and compete more effectively."
Most CIOs who are used to delivering standard key performance indicator reports are not geared up to deliver this level of dynamic information, and now face a range of issues. These include providing flexible mobile accessibility across a growing number of devices; compensating for users' lack of data literacy; achieving the required speed of information delivery; and ensuring the quality and integrity of source data, Pringle said.
As they seek to satisfy growing demand for timely and specific business insight, CIOs must draw on a range of services. These range from assessing and improving the quality of target data sources and making resulting analyses comprehensible to users, to determining the exact needs of users and ensuring that the particular information they require can be delivered to them at the point of need.
The Pringle report highlights the indispensable role of external services right across the board -- from management consultancies to technical, deployment and maintenance providers -- in developing an organization's capability to harness the value of data. Its conclusions support the general rule that for every dollar spent on software for business intelligence, more than two are spent on external service providers, as companies seek to plug gaps in their internal data analysis capabilities and associated IT skills.
The telecommunications and financial services sectors have long exhibited strong demand for external services, but interest is now growing across a number of other sectors, including healthcare, as providers seek to improve patient care by establishing a more holistic view of patients, and travel, as airlines, for example, try to sustain the customer experience yet counteract rising costs.
Recognizing the opportunity, outsourced service providers are now ramping up their services and new players are entering the market, Pringle said. "Business intelligence, and specifically data analytics, is one of the highest growth areas in IT generally. What's particularly interesting as service providers tap into this opportunity is the entry of non-traditional players. Among them are industry professionals with a lot of operational experience. They are able to complement data and technology experience with a deep knowledge of how particular organizations need to use data for strategic and competitive advantage. Their involvement, alongside data experts, helps deliver the speed of results that is so critical now. Even very large firms don't have all of the skills they need in house, so it makes sense to partner with relevant experts."
Companies shouldn't underestimate the groundwork needed to enable more dynamic, business-driven data analytics, Pringle added. "The 'bigger' and more strategic data becomes, the more important it is that the quality is good," he noted. "Presentation is important too, as most users won't be data experts." To this end, technology providers need to work harder to hide the complexity of the data, he said, so that only unambiguous and relevant content is served up to users -- aiding their efficiency, rather than distracting them further.
Pointing to CIOs' priorities over the year ahead, Pringle concluded, "To avoid projects that spiral out of control, organizations should start small, focusing on where the demand is coming from in the business: is it to understand sales performance in more detail, for example, or to analyze costs in the supply chain? The sensible advice is probably to look at specific issues rather than take a big-bang approach -- then, if data quality turns out to be an issue, you might be able to get away with a fairly packaged service from an IT provider."
Emerging database technology promises to automate more analysis. Here's where it could replace relational systems. Also in the new, all-digital The Rise Of Semantic Databases special issue of InformationWeek: There's a big demand for big data and analytics experts. (Free registration required.)
6 Tools to Protect Big DataMost IT teams have their conventional databases covered in terms of security and business continuity. But as we enter the era of big data, Hadoop, and NoSQL, protection schemes need to evolve. In fact, big data could drive the next big security strategy shift.
Big Data Brings Big Security ProblemsWhy should big data be more difficult to secure? In a word, variety. But the business won’t wait to use it to predict customer behavior, find correlations across disparate data sources, predict fraud or financial risk, and more.
Top IT Trends to Watch in Financial ServicesIT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
Join us for a roundup of the top stories on InformationWeek.com for the week of September 18, 2016. We'll be talking with the InformationWeek.com editors and correspondents who brought you the top stories of the week to get the "story behind the story."