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Thursday, December 1, 2011 by Helena Schwenk
In our 2011 Outlook we predicted that investment in Analytics and Information Management (AIM) technologies would remain strong despite the challenging economic backdrop as companies looked to sweat their enterprise data to help support key operational and strategic business initiatives. Not surprisingly given the continuing economic uncertainty we expect this trend to continue into 2012, although this time organisations will want to get smarter and more streamlined in deployment, as increasingly cost conscious organisations look to do more and more sophisticated types of analytics and information management with less money and IT staff.
Here’s how we expect things to look over the next twelve months – leave us your comments and let us know what you think. We’ll revisit these in a year’s time and see how things panned out.
Top 5 trends for Analytics and Information Management in 2012
1. Continued move towards analytics as a ‘business as usual’ activity. The days when BI or analytics was a background activity performed by a discreet and elite number of analysts are now outdated. Today organisations are applying analytics and information management techniques across all parts of the organisational landscape to support and underpin critical decisions, whether this involves streamlining business processes, cutting costs, overhauling the customer experience, managing financial governance or reducing exposure to risk. At the same time, this trend is also indicative of a deeper move towards operationalising aspects of the analytic process by enabling more users to access, understand and act upon analytical information — sometimes in an automated and closed loop fashion — in the context of their daily business processes. As part of this move we also expect many organisations to look beyond foundational analytic tools towards more advanced capabilities such as data mining, predictive and scenario modelling, text and sentiment analysis as demand for more accurate and actionable insights continues to grow.
2. The continuing transition towards self-service BI. The rise in the consumerisation of IT together with the increasing demand for real-time location and context based business information is placing a sharper focus on the ease-of-use, flexibility and the reach of BI and analytic offerings. The move towards end user self-sufficiency will impact the way BI and analytics insights are developed, consumed and delivered. In 2012 we will see a combination of form factors coming to prominence as they help deliver improvements in the user experience including mobile BI, integrated analytical search, in-memory analytics, interactive visualisation and data discovery. This in turn will place additional pressure on IT, who will increasingly be called on to govern, control and manage new and more diverse communities of users but without relinquishing some of the businesses new-found freedom and flexibility.
3. Bringing a social element into corporate decision making. As a continuation of the trend above we also expect social software to have a greater impact on decision-making processes in 2012. As analytics and collaboration capabilities move closer together companies will be forced to look at enterprise collaboration in a more focused way that is tied to key business processes and goals, both within and even across the extended enterprise. By absorbing collaborative styles such as interactivity, information sharing and community-driven networks into the user experience, organisations have the opportunity to bring a degree of control and understanding to the decision-making process that in turn helps improve key processes and makes decisions more consistent, repeatable and transparent.
4. Big Data projects take shape; skills development remains a priority As we highlighted in our 2011 Outlook report, Big Data — specifically the ability to manage and extract value from new, complex, unstructured and voluminous data sources — will continue to remain a challenge and opportunity for many organisations going forward into 2012. As predicted, methods for storing and processing Big Data such as Hadoop and MapReduce have grown in popularity and use in the last year as organisations have started to experiment with Big Data technologies as a complementary or alternative form to traditional data warehousing architectures. In 2012 many of those organisations will move out of experimental mode and start to consider more production status deployments, although the scarcity of skills in Big Data technologies together with the relatively immaturity of tooling will continue to present challenges.
5. Analytics and Information Management in the cloud slowly gains ground. Economic pressure on budgets, together with concerns over skills and the cost and complexity of deployments will mean organisations continue to explore the use of cloud deployments for analytic and information management projects in 2012. Uptake and broader adoption of the cloud as a deployment model, however, will be dependent on business requirements for data latency, data volumes, data security and back-end integration. At the same time we expect to see a significant number of analytic and information management vendors utilising cloud deployment models in 2012 as they look to widen the appeal of their offerings at increasingly attractive price points.
The outlook for 2012
The state of the nation for Analytics and Information Management
We expect demand and growth in the analytics and information management market to remain robust during 2012. Despite the economic backdrop and its impact on IT spending, the prospect for continuing investment in analytic and information management technologies remains good. That’s because, as companies brace themselves for further economic headwinds, many find these technologies provide one of their best lines of defence by helping to catch, retain and focus on their most profitable customers, enhance cross-/up-selling, negotiate more skilfully, improve productivity, reduce service costs, and pinpoint areas of the business for cost-cutting.
As a maturing technology, the use cases of analytics and information management permeate a wide range of industries and sectors. In 2012 we expect this trend to continue, although industries with significant amounts of big data such as retail, telco, biotech, manufacturing, government and Web 2.0 companies will start to branch out in their investments to incorporate newer technologies such as Hadoop and MapReduce.
Key AIM adoption characteristics
For many organisations 2012 will be a time when they look to prioritise their analytics and information management efforts to those initiatives that provide more focused, practical and hard line business benefits. Those projects that successful use analytics to, for example, predict and anticipate market changes before competitors, detect fraudulent transactions, accurately predict demand and boost productivity are likely to garner the most support. Likewise, the heartland of analytics — in particular customer analytics — will continue to be the focus for many projects in 2012, particularly as organisations operating in mature and competitive markets push to improve and strengthen the overall experience they offer customers in a timely and more accurate manner.
Key trends in practice
In 2012 we expect best practices around analytics and information management to evolve in a couple of ways. Firstly, the move towards self-service will inevitably shift the balance of power and ownership of analytic projects and budgets towards business users, giving them more direct control over the information they access and use that in turn leads to better satisfaction and success with BI, analytics and IT in general. Similarly, IT will transition its role from the owners of the analytic environment towards one where they are responsible for oversight, security and governance, thereby freeing them up to work on more value-add activities.
Secondly, as IT budgets continue to be pressurised there will be a renewed emphasis on quicker, lower risk deployments that help deliver a faster return on investment (ROI) and (if possible) under the budgetary radar. This will translate into a solid demand for service providers whose implementation experience, global and regional presence can play a significant role in helping organisations realise the benefits from their analytic solutions.
And finally, uptake of analytic competency centres has been sporadic to date. However, we expect activity to increase during 2012 as companies look to learn from and improve on their early departmental initiatives and move towards a centralised management point for consolidating expert decision making and IT resources around analytics.
Key technology trends
The key analytic and information management technology trends to look out for in 2012 broadly relate to five core categories: being able to harness and driving value out of Big Data; leveraging smart mobile devices and in-memory technologies for delivering more timely, relevant and personalised information to users; utilising the cloud to lower the cost and complexity of deployments; applying the best principles of collaboration within the context of corporate decision making and lowering the barriers for analytic adoption through easier tooling and simplifying the process of embedding intelligence into the operational layer.
Key AIM supplier trends
In the last five years the analytic and information management market has consolidated around a handful of mega-suppliers comprising IBM, SAP Business Objects, Oracle, Microsoft and HP (through its Vertica and Autonomy acquisitions). Despite their dominance, the independent vendors such as Teradata, Microstrategy, SAS and Qliktech continue to grow and remain relevant through their steadfast focus on the core competencies of analytics and information management. Similarly, specialist vendors such as YellowFin, Lyzasoft and Paraccel continue to differentiate themselves through new technology innovations and deployment models. While acquisition activity is expected in 2012, the economic environment may also mean that those with enough cash reserves might be able to pick themselves up a bargain.
Similarly, we expect vendors to continue to focus their efforts on reaching out to business communities; one such way this will manifest itself is by targeting more offerings towards business and industry issues with line-of-business and vertically-aligned applications and services, such as improving the financial close, analysing customer sentiment and real-time fraud detection.
What do you think?
What are your plans for analytics and information management in 2012? Leave your comments here or drop me a line at firstname.lastname@example.org – it would be great to get your thoughts. To stay in touch with developments throughout 2012 subscribe to my analytics blog feed and for research report updates.