Fact Finders vs. Fumblers: Using Business Analytics to Succeed in the Intelligent Economy

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1 Fact Finders vs. Fumblers: Using Business Analytics to Succeed in the Intelligent Economy Henry Morris Senior Vice President, Worldwide Software and Services Research Groups IDC

2 Agenda Market Trends Driving the Intelligent Economy Industry examples Technology trends The New Demands on Decision Makers Decision management Business Analytics as a Competitive Differentiator The six indicators of pervasive BI and analytics The difference between Fact Finders and Fumblers Recommendations Self assessment Investment in business analytics

3 Trends Driving the Intelligent Economy Energy Opportunities Smart grid Smart meters, grid sensors Meter data mgmt and grid mgmt systems Energy efficiency and demand response In-home displays, smart thermostats, smart appliances CRM systems Worldwide Energy Demand Sources: International Energy Agency (IEA) and Consensus Economics, 2009 Electric vehicles Charging infrastructure (smart charging stations) Charging management systems

4 Opportunities Smart charging, vehicle-to-grid (V2G) In-car technology (software, communications) Charging infrastructure Wide area networks/gps Trends Driving the Intelligent Economy Transportation Worldwide Growth of Electric Vehicles Back office systems Billing and settlement systems CRM and account management systems Enterprise asset management Sources: International Energy Agency (IEA), Better Place, 2009 Driver/consumer services Portals Mobility Social media

5 Opportunities Telemedicine and remote patient monitoring Intelligent/connected medical devices (glucometers, pulse oximeters, blood pressure monitors) Wide/home area networks Care management systems (enables remote care by clinicians) Trends Driving the Intelligent Economy Healthcare Electronic medical record / personal health record systems Patient portals Telepresence/video conferencing

6 Opportunities Real-time in-store systems PoS/self-checkout Kiosk Mobile/personal shopping assistant Digital signage Centralized back office systems ecommerce, mobile and social media Merchandising and supply chain management Trends Driving the Intelligent Economy Retail Energy management systems HVAC Lighting Refrigeration

7 Trends Driving the Intelligent Economy Broadband Networking Social Networking Intelligent Devices Intelligent Economy Analytics

8 The New Demands on Decision Makers Pervasive & Predictive Analytics Ubiquitous & Uninterrupted Tracking Intelligent Economy Decisions Collaborative or Automated Actions Real-Time & Informed

9 The Six Indicators of BI and Analytics Competency and Pervasiveness Number of Domains Analytical Orientation Data Update Frequency Degree of External Use Percent of Power Users Degree of Internal Use

10 Components of Analytical Orientation Source: Improving Organizational Decision-Making Through Pervasive Business Intelligence, IDC white paper #214958

11 Competitive Differentiation through Analytical Orientation Source: Improving Organizational Decision-Making Through Pervasive Business Intelligence, IDC white paper #214958

12 Recommendations Establish a BI/Analytics Strategy Identify the BI/Analytics requirements of different decision-making processes Evaluate your organization s BI/Analytics competency and pervasiveness Focus on factors that influence BI/Analytics competency and pervasiveness Invest for greater returns

13 Establish a BI/Analytics Strategy What are our organization's goals and how do we measure progress toward these goals? What key performance indicators (KPIs) exist to ensure that measurement of progress toward organizational goals is made possible? What are the types of decisions being made at different levels of our organization? What information access and analysis technology functionality is required to support the types of decisions and decision-making processes of various enduser groups, including executives, managers, business analysts, quantitative analysts, operational staff, customer-facing staff, and external stakeholders? What staffing needs and organizational structure are required to ensure that individuals or teams exist to address tasks such as data integration, data quality, data management, report or dashboard development, data analysis, and information access? What technology components exist or are needed to ensure the ability to gain greater insight by all decision makers?

14 Evaluate BI/Analytics Competency and Pervasiveness Number of Domains Analytical Orientation Data Update Frequency Degree of External Use Percent of Power Users Degree of Internal Use

15 Management Scorecard: How to Influence Analytical Orientation? Training on KPIs, Analytics, and Tools Solution Design Quality Data Governance Non-executive management involvement Performance management methodology

16 Management Focus on Five Factors: The Impact on Analytical Orientation Source: Improving Organizational Decision-Making Through Pervasive Business Intelligence, IDC white paper #214958

17 Use of Performance Management Methodology Q. Does your organization use a formal performance management methodology? More competitive companies are almost 2x more likely to use a formal performance management methodology Source: Improving Organizational Decision-Making Through Pervasive Business Intelligence, IDC white paper #214958

18 ROI and Benefits of Business Analytics Investments Q: Would you say that your investment in a Business Analytics/Intelligence solution has paid off? Most of the top measurable results fall into the productivity gains category We expect this focus to change to business process enhancements category as the economy improves The big story is the almost 1/3 of companies who are unsure how to measure benefits of business analytics solutions and projects Focus on incremental projects with measurable ROI or risk losing support or funding for new projects Consider decision management best practices Source: IDC, 2010 Vertical Research Group IT Survey, N = 2481

19 How Much Will Companies Allocate for Business Analytics Solutions? Q: Considering just the software portion of your U.S. organization s 2010 external IT spending, what percent is allocated to each of the following software categories? Business Analytics Avg. % of SW Budget Financial Services Sector 5.5% Manufacturing & Resources Sector 4.5% Distribution & Services Sector 4.3% Infrastructure Sector 4.5% Public Sector 3.9% Business Analytics Avg. % of SW Budget 1-99 employees 3.5% employees 4.2% employees 4.3% 1,000-4,999 employees 4.4% 5,000+ employees 4.8% Industries with above average budgets for Business Analytics in 2010 are: banking, securities and investments, process manufacturing and life sciences Highest growth rates are expected in healthcare, utilities, and government Source: IDC, 2010 Vertical Research Group IT Survey, N = 3560 The arrows next to the % of software budget allocations indicate whether the average % for the industry or company size band has increased or decreased as compared to 2009 survey results.

20 Business Analytics Solution Adoption Q: Has your organization implemented a business intelligence / analytics solutions? There are substantial opportunities for more pervasive deployment of business analytics solutions within most companies Source: IDC, 2010 Vertical Research Group IT Survey, N = 3723

21 IDC Business Analytics Software Market Size Pre-Packaged Analytic Applications $8.3 billion BI/Analytics Tools $8.6 billion Data Warehouse Platform $7.4 billion Market Worldwide CAGR Business Analytics Software 1.3 % 7.0 % Total IT market - 4.0% 5.7 %

22 Q: What type of Business Analytics solution do you have? Custom vs. Packaged Solutions There are several options for deploying business analytics solutions. It s common to see multiple deployment options at most large and mid-sized organizations Cloud or on-demand market is growing 3x faster than the overall market Source: IDC, 2010 Vertical Research Group IT Survey, N = 2774

23 For Questions Contact Henry Morris Phone: Twitter: twitter.com/hmorrisidc LinkedIn: