The Business Intelligence (BI) Market was valued at USD 20.516 billion in 2020 and is expected to reach USD 40.50 billion by 2026 and grow at a CAGR of 12% over the forecast period (2021-2026). With the emergence of Big Data and the increasing need to make critical business decisions within a compressed timeframe, the business intelligence (BI) and analytics tools have gained a substantial market share in the past decade. This trend is expected to increase steadily, along with the advancement of technology and growing investments, during the forecast period.
- Furthermore, data visualization tools have been increasingly used for analytics in various organizations over the years. They are used for designing infographics and charts, as well as building BI dashboards and performance scorecards. These charts and dashboards display visualized data on business metrics and key performance indicators in an easily understandable way.
- Business intelligence also uses advanced analytics, such as predictive analytics, statistical analysis, big data analytics, data mining, and text mining. The increased use of these tools, due to the enhanced capability of drawing valuable insights, is driving the need for business intelligence across different industries.
- The business intelligence market is witnessing considerable growth, owing to its potential and the benefits it guarantees to the customers. Business intelligence tools' major benefits are optimizing internal business processes, accelerating and enhancing decision-making, driving revenue growth, obtaining a competitive advantage over competitors, and increasing operational efficiency. BI systems also help companies identify market trends and spot business problems that need to be addressed.
- Another driver for BI is the trend of integrating advanced analytics for Big Data with BI systems. Advanced analytics and BI are highly complementary, as advanced analytics can provide a more in-depth and exploratory perspective on the data, while BI systems provide a more structured user experience in terms of dashboard visualization, reporting, performance management metrics, etc. Also, there is a substantial increase in the need for data analytics and data visualization tools. For instance, according to the IBM Quant Crunch, up to 2.72 million jobs, which require data science skills, are likely to be posted by 2020, making it one of the highest-demanded roles across industries.
- In the current pandemic times, it is not surprising that the business intelligence solutions that are widely recognized for their problem-solving and predictive prowess have become an essential navigational tool. Analytics supports multiple urgent tasks faced by the businesses in this pandemic outburst, which includes forecasting demand, identifying the potential supply-chain disruptions, and determining the effectiveness of the crisis intervention strategies.
Key Market Trends
BFSI Industry is Expected to Drive the Market Growth
- The banking industry is rapidly expanding, owing to the digitization and the pace at which various technological advancements were embraced in recent years. The advent of technologies and tools, like business intelligence and data analytics, has invariably helped banks reflect all required regulations and stay competitive while attending to today's modern customers' digital needs. These solutions aid financial institutions in making smarter decisions, both financially and operationally.
- For instance, according to a study by Goldman Sachs, 2018, AI technology may deliver up to USD 43 billion in savings, thus likely to generate revenue opportunities in the financial sector by 2025. Hence, many financial institutions are considering investing billions of dollars into this technology every year.
- The major challenge faced by the BFSI domain is risk management and changing customer demands. BI tools aid them to leverage customer data for deriving useful insights. BI enables financial institutions to analyze vast amounts of customer data to gain actionable insights about the customers, which can be used to improve products and services. It also helps clients create their dashboards to monitor their investments and returns. Furthermore, it helps financial institutions improve their marketing strategies and customer retention policies, as well as develop new investment strategies.
- The growth in BI adoption in the BFSI sector can be attributed to numerous factors, such as the growing adoption of data analytics, an increase in data generation, increased adoption of cloud business intelligence (BI) by SMEs, and the improved efficiency of BI tools. With technologies such as AI, ML, and IoT, the dependency on data continues to rise, leading to a rise in the demand for BI tools. They help enhance the banking and financial sector operations by identifying, analyzing, addressing, and resolving issues in real-time.
North America to Hold Maximum Market Share
- The North American region dominates the business intelligence market, owing to the presence of major industry players in the region. Additionally, factors, such as intense R & D activities in technology, increasing competition, and an evolving trend of data proliferation, are aiding the growth of the market in North America.
- According to Cisco Systems, around 50% of the ERP projects failed due to the lack of data integration. The limitations of ERP software have fueled the growth of BI tools across North America. This growth may continue to sustain, as BI penetrates new verticals across industries.
- Many companies in the region are undergoing partnerships and alliances, to enhance their productivity and optimize their operations with the use of BI tools in their processes.
- For instance, in March 2019, QAD Inc., a leading provider of flexible, cloud-based enterprise software and services for global manufacturing companies, announced that American Vanguard Corporation had chosen QAD Business Intelligence (BI) for its AMVAC Chemical Corporation subsidiary. While AMVAC is growing rapidly, American Vanguard Corporation realized that its subsidiary needed a BI solution, which may enable it to improve its financial reporting and analysis across multiple domains using dual currencies with a localized chart of accounts.
- Healthcare and retail sectors are expected to be essential in the North American region, with a push toward automation in these industries in recent years. Large investments and supportive environments have transformed healthcare and retail, enabling these sectors to achieve full digitization. With analytics becoming a core aspect of these industries, the demand for AaaS is expected to rise exponentially in the coming years.
The global business intelligence market is competitive with many well well-established players. The market players adopt strategic initiatives such as acquisitions, collaborations, mergers, and partnerships to get a competitive edge over other market players. Some of the recent developments in the market are:
- July 2020 - Rackspace Technology announced a Strategic Collaboration Agreement (SCA) with Amazon Web Services (AWS), enabling customers to realize more excellent value from AWS cloud services. The companies have collaborated to expand offerings globally as part of the Rackspace Technology service block catalog. These modular offerings allow customers to tap into Rackspace Technology's managed services expertise to meet their specific needs, including cloud strategy, migration, cost governance, complex cloud operations, and security support.
- July 2020 - geniSIGHTS, a start-up based out of India, launched an Artificial Intelligence-powered Business Intelligence Suite, primarily to help Indian small and medium enterprises perform data analytics through voice commands. The company also stated that the tool is expected to prove vital in the current COVID-19 pandemic time, as the data analytics will enable the entrepreneurs to analyze their current business operations.
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