Business intelligence and analytics have consistently ranked highly in polls of CIO priorities, and there are signs that they are only growing in importance.
As discussed below, the reasons for this are a mix of cultural and technological trends. But the overarching theme is that in BI and analytics, CIOs see an opportunity to empower users, to enlighten the organisation, and to convert IT from a cost centre to a source of competitive advantage.
1. Data is big business
Whether it is Facebook’s IPO or a New York Times article about how US retailer Target uses analytics, there are signs everywhere that extracting value from data is the key to success in modern business.
IT leaders have understood that corporate data can be used to provide insight, analysis and competitive advantage, but now this has dawned on the business community too.
This is good news for two reasons. Firstly, it means that business intelligence and analytics projects are more likely to be endorsed by the business, and will therefore be more likely to be funded. Plus, the business is more likely to be engaged in these projects, and to understand how they might benefit from them, and so they are more likely to succeed.
2. Users crave information
Consuming detailed information in electronic form is not just a pastime – it is an all encompassing cultural obsession. Whether it is online news, social networking messages, YouTube videos or sports statistics, the only limit on the amount information available to consumers is their ability to concentrate.
In most organisations, however, the pace of information consumption slows right down when those consumers get to work. There may be plenty of emails to read and documents to sift through, but these do not match the instantaneous access to desirable data freely available on the web.
This is a double-edged sword for CIOs. On one hand, it means that users have an appetite for the output of BI and analytics systems. On the other, they will judge those systems by the standards set by Google, Facebook and other high-performance web services.
3. Smart devices everywhere
Computers have been a part of the modern household for decades now, but it is only a recent development that consumers carry powerful, Internet-connected computing devices with them everywhere they go.
This is another factor that is making data access and analysis an increasingly prevalent component of everyday life. Shoppers can compare supermarket pricess from their phones, or look for a new insurance quote while watching TV.
In the business context, perhaps the most significant impact of smart devices is that they place BI and analytics in the hands of the senior decision makers, who rarely spend their days stuck behind a desk, and not just the business analysts who have traditionally been their main users. Making BI and analytics tools accessible via a tablet means they have an audience at the executive table.
4. Cloud enablement
Cloud computing could well be a driver for business intelligence and analytics. Firstly, it offers CIOs with tight budgets and over-burdened IT infrastructure an opportunity to access cheap and flexible computing resources.
Secondly, by the accelerating the IT infrastructure procurement processes it could allow the IT department to focus on business engagement and to prototype BI systems to ensure that requirements are met.
And thirdly, information service providers will increasingly use web-based intregration technology and subscription pricing to allow their customers to access their data from the cloud.
However, the cloud may also complicate business intelligence. For one thing, if business units procure their own software-as-a-service applications, pulling data from those applications into an internal data warehouse may require specialist integration technologies.
And pulling data from cloud-based sources may, if improperly managed, degrade the performance of BI systems.
5. The advancement of analytics
The roots of business intelligence lie in producing regular reports on historical company performance. However, businesses are increasingly applying more sophisticated statistical techniques to make predictions, and to spot subtle but important trends in data.
These advanced analytical techniques are more likely to confer competitive advantage than simple retrospective reporting.
Meanwhile, the increase in the volume, velocity and variety of data available to BI systems – so-called ‘Big Data’ – allows organisations to apply statistical analysis to questions that were previously unanswerable.
These techniques may require specialist skills – most organisations do not employ statisticians. However, they offer an opportunity for IT systems to supply not just operational monitoring but also the kind of deep insight that can inform company strategy.
This in turn offers IT leaders the chance make a positive contribution to the business, and shake the IT department’s reputation as an unavoidable burden. Little wonder CIOs place so much importance on BI and analytics.