B.I. Adoption, Sophistication Increasing: Nucleus Research

A good set of B.I. tools can actually give an organization some good ideas.

A May note from Nucleus Research suggests three trends underway in the business-intelligence space: accelerated adoption, “increasing user sophistication,” and broader adoptions.

That’s potentially good news for vendors such as SAP, Oracle and Microsoft, all of which offer significant-and-growing lines of B.I. products. Breaking down that research note a little more, Nucleus Research notes that more companies are embracing analytics platforms, including “small companies with limited IT resources, social service agencies, not-for-profit entities, and state and local governments.”

It also found that users are becoming more sophisticated, and using analytics platforms in order to improve the decision-making process (as opposed to before, when many companies used similar tools simply for reports). More senior management teams have embraced those tools as a way of “aligning their employees’ decision making with the strategic goals of the organization.”

Which is all well and good, but the ultimate signifier of a new system’s success is whether it’s helping revenues increase—and according to the research note, analytics platforms are indeed delivering more cash to companies’ front doors.

“Nucleus found organizations earn an average incremental ROI (return on investment) of 241 percent when big data is used to reach the fourth stage of analytics adoption,” read the Nucleus Research note. In the earlier stages of adoption, ROI averaged 188 percent. Whatever the actual numbers, it’s clear that the firm draws a very strong correlation between a business adopting some sort of analytics platform and that business subsequently earning more money.

Products such as IBM Cognos Insight, Microsoft’s Office 365, Oracle’s analytics functionality, and SAP Business Objects EPM 10.1 have all given companies new data-mining and reporting abilities.

That being said, these B.I. tools and analytics platforms don’t operate by themselves—there’s perhaps a demand, and perhaps a growing shortage, of analytics-related talent out there.

In 2011, McKinsey & Company’s Business Technology Office predicted that demand for analytical talent in the U.S. would exceed supply by 50 to 60 percent by 2018. “There will be a shortage of talent necessary for organizations to take advantage of big data,” read that group’s report at the time. “The United States alone faces a shortage of 140,000 to 190,000 people with deep analytical skills as well as 1.5 million managers and analysts to analyze big data and make decisions based on their findings.”

The McKinsey report also suggested that the type of deep talent required among individual data analysts is difficult to produce and can require years of training. In other words, Nucleus Research might be indicating a hunger on the part of organizations for more B.I. tools, but that same demand also creates a pressing need for workers.

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