Try to name an industry that hasn’t been disrupted by cloud technology. Enterprises now rely on a new set of cloud-based software applications to run their businesses, whether it’s Box for enterprise collaboration, Workday for ERP software, Marketo for marketing automation or Zuora for subscription billing. These companies are responsible for a tectonic shift that forever changed how the enterprise does business.
Business analytics (BA) is ripe for a similar transformation, yet the field as a whole has yet to realize the full benefits of cloud, and enterprise agility is suffering as result. The methods most businesses use to capture and analyze critical data are 10 to 15 years old. This leaves them ill-equipped to keep pace with rapidly changing business needs.
IDC estimates the business analytics market will hit $50.7 billion in revenue by 2016, growing at a rate of almost 10 percent a year until then. That’s solid, brisk growth. But I believe the BA market can do quite a bit better, to the tune of reaching $150 billion by 2020. To make this a reality, companies must do two things.
Be cloud first, not cloud ready
To survive in today’s economy, your business needs to receive and process mountains of real-time data. Being a cloud-first business means re-imagining your analytics platform from the ground up, so that it is available for a public, multi-tenant cloud stack. Pioneered by Netflix, public cloud architectures are the modern answer for fast, reliable and elastic processing of complex requests. These architectures provide unparalleled value to users across organizations at the speed of business.
Cloud-first also means being able to extract value from heaps of unstructured data–including files on Box, tweets, RSS feeds, documents, Yelp reviews, and conversations on Facebook–and quickly transform them into insights that answer your questions from a business perspective.
Cloud-ready is a different proposition altogether. It’s an unholy compromise that usually occurs when companies try to retain their legacy ETL systems and simply host them in the cloud. Doing this does not actually change anything, because you are still forcing Big Data into the structure of a cube.
When it comes to financial planning, major companies have put up a façade of cloud first in order to “cloud-wash” what are otherwise legacy systems. According to cloud guru David Linthicum, “cloud computing is so broadly and vaguely defined that you can pretty much position anything as a cloud these days.” As a result, customers of these companies are losing out on the opportunity to internalize unstructured data and to provide real-time data insights.
Empower users with a killer experience and access to the data they need
Typically, only 24 percent of employees use their company’s analytics tools. What if it was possible to increase that number to 90, even 100 percent? How can we get there?
We can start by building BA solutions to suit the way companies operate today.One problem with traditional business reporting is that it’s overly complex and shuts out people who are essential to its success. Furthermore, the data that informs BA is reserved for the people in Financial Planning and Analysis (FP&A) who, in turn, are completely reliant on IT gatekeepers to unlock it from data warehouses. This sets up a process that is inherently broken, because the employees at the perimeter of the organization–the ones who are closest to customers, vendors, financial partners and other stakeholders–often have the most valuable business insights. Yet they have almost no direct role in FP&A, because they have no direct access to data.
The answer is straightforward. If you want your employees thinking strategically, empower them with access to data. Make data analysis intuitive; yet feature-rich, flexible and relevant. Embrace mobile for the pervasive platform it is and make it the primary vehicle for data consumption and engagement. Do these things, and those once-removed employees at the fringe of the organization will become a vital part of your BA process.
By giving all your employees access to real-time data anytime, anywhere, and in an accessible format, you enable them to become data-driven decision makers rather than data-deprived executors. And when employees are invested in executing the strategic direction of the organization, they have more satisfying and meaningful work experiences.
The cloud is coming. Again
The advent of the cloud has disrupted almost every industry. Businesses realized that outdated technology from legacy software providers in these industries was an expensive solution that was not capable of growing with market needs. What legacy companies created, cloud-first providers revolutionized.
The BA market currently faces similar constraints. Most installed solutions come from a premise-based world, and they’re trying mightily to make those earthbound solutions cloud-ready. While those old architectures struggle, it’s time the rest of the industry reimagines BA and ushers in the next major cloud disruption. With organizations of almost any size able to afford and use cloud-first solutions, a market size of $150 billion doesn’t seem far off at all.
Christian Gheorghe is the founder and CEO of business analytics firm Tidemark. Follow him on Twitter @optian.