Business Intelligence Market on Strong Growth Trajectory

The business intelligence software market is poised for steady global expansion, according to Gartner, which projects a compound annual growth rate of 7.3 percent from 2004 to 2009.

Growth will vary region by region, the research firm noted, with the more mature markets of North America and Europe expected to register at slightly lower rates — between 6.4 percent and 6.9 percent.

In 2003, BI vendors generated US$1.8 billion in new software license revenue. In 2005, that number was $2.3 billion. It is expected to rise to slightly more than $3 billion by 2009.

There is a strong untapped demand for BI applications, Gartner concludes. However, the vendors have yet to overcome certain limitations of their systems and implementations, the firm added, a finding that suggests that near-term demand will remain unexploited.

Integrating With Customers

As more firms become acquainted with the benefits of BI and more vendors offer easy-to-use programs, additional sales opportunities are emerging among existing customers. The earliest versions of BI applications required highly trained scientists to program and use. Now, these packages are accessible to the masses.

The use of BI systems allows companies focusing on integrating with customers, suppliers and other stakeholders to realize a higher return on investment, Gartner said, which encourages broader adoption. Another source of potential opportunity lies in the fact that many potential users within those organizations have not yet been given access to the existing BI applications, which could translate into more seats.

However, integration with enterprise applications can be daunting, Gartner noted. Also, “internal politics are a challenge because people view an enterprise-wide ‘single version of the truth’ as a threat to their personal power and their ability to ‘spin’ the fact presented to executive management,” the firm posited.

Data Source

Integration is a pain point that can often waylay a BI initiative, said Todd Withers, leader of enterprise solutions consulting for sales and marketing at D&B, formerly Dun & Bradstreet.

“One commonly overlooked aspect to these projects is the governance with content, starting with definitions — such as, ‘What is a customer?'” For instance, a company can conclude that it landed 1,000 new customers in a quarter but might not recognize that 200 of those “new” customers are duplicated records.

Having reliable data in the first place is key. “There are two components to a successful BI implementation: quality information from the source system and the appropriate integration of that data from the systems,” Withers told CRM Buyer.

Despite such difficulties, firms are forging ahead with implementations, Withers said. More companies are relying on analytics to make pricing decisions based in part on product penetration, which must be calculated using BI tools.