DM Review Published in DM Review Online in February 2006.
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Worldwide Business Intelligence Market to Reach $2.5 Billion in 2006

by DM Review Editorial Staff

New license revenue in the worldwide business intelligence (BI) software market is forecast to reach $2.5 billion in 2006, a 6.2 percent increase from 2005, according to Gartner, Inc. The market is poised for continued growth through 2009, when new license revenue is projected to reach $3 billion.

"Companies around the world have purchased more than $40 billion worth of enterprise applications, including ERP, CRM and HR, during the past few years," said Colleen Graham, principal research analyst at Gartner. "This has generated significant volumes of data in support of the operational processes they automate. By investing in BI, companies can further leverage their enterprise application investments and turn the torrent of data into meaningful insight to better measure performance, respond more quickly to market changes and opportunities and comply with an increasingly complex regulatory environment."

However, Gartner warned that significant inhibitors to the successful deployment and adoption of BI exist. Limited BI skills and competencies combined with a perceived high total cost of ownership (TCO) and difficulty in quantifying the direct business benefits of better performance and improved decision-making will continue to hamper adoption.

New findings from Gartner Executive Programs' (EXP) 2006 survey of 1400 chief information officers (CIOs) found that business intelligence surpassed security as the top technology priority in 2006, with CIOs reporting plans to increase their BI budgets by an average of 4.8 percent in 2006.

"BI is now part of an organization's license to operate, as every enterprise needs to manage information," said Frank Buytendijk, research vice president at Gartner. "However, BI has not yet achieved the necessary level of strategic importance and is not included as an essential part of corporate planning activities. Moving forward, BI will become part of business innovation itself. Sharing information with customers, suppliers and other stakeholders increases loyalty and in many industries provides competitive differentiation. BI will become pervasive in operational and workplace applications as organizations seek to optimize their business."

To use BI to drive business transformation, Gartner advised organizations to:

  • Develop user skills and a culture in the use and analysis of information to be an integral part of achieving business objectives and driving transformation ,
  • Change the way BI is integrated into business processes , and
  • Change the way the information architecture and application portfolio are implemented and managed.

"There are certainly no quick fixes where BI is concerned. There are multiple decisions and choices that need to be made on the road to making BI effective and pervasive in any organization. These decisions cannot be made in isolation and must be considered within the wider context of the business. One of the key decisions is to move beyond a BI vision that focuses almost exclusively on information dissemination and start integrating BI into an organization's strategic planning activities," said Mr Buytendijk.

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