The embedded analytics landscape is shifting, and new needs and trends are driving major transformations. That’s why Logi conducts the State of Embedded Analytics survey each year: It’s a chance to take the pulse of the analytics industry and predict the trends that are shaping the future.
Brian Brinkmann, VP of product management at Logi, spoke recently about the key findings and highlights from the fourth annual State of Embedded Analytics Report. Read his take here and download the full 2016 report for more details.
These reports always show some fascinating results. What were some of the top trends you saw this year?
Brian Brinkmann: One of the most important results this year is the idea that traditional business intelligence is dead, or at least disappearing as we know it. BI has had a very long history of not meeting the needs of business users, which has resulted in poor user adoption rates in the enterprise.
We’ve found year over year that there is no better way to build a truly data-driven organization than by embedding analytics. In this year’s survey, application providers said 43 percent of their user bases leverage embedded analytics on a regular basis. That’s compared to a 22 percent adoption rate for traditional BI. So the adoption rate of embedded analytics is double that of traditional analytics tools. It’s clear BI is disappearing in favor of embedded analytics, and BI will never be the same.
The other trend we see is the increasing value of embedded analytics as a strategic initiative. This year, for the first time, we saw the executive management team as one of the two groups most likely to drive embedded analytics initiatives at their companies. In the past, product management was the more common group pushing for embedded analytics. But we’ve seen a shift in recent years of executive management taking a much stronger role in driving these initiatives.
The increasing level of executive sponsorship shows that analytics is important to more than just application providers who are delivering commercial software and SaaS applications who embed analytics to increase revenue. Analytics is also crucial to internal IT teams: For them, it’s all about providing information to internal business users so they can create a data-driven culture. They’re being measured on their ability to attract new users and ensure their employees are using the applications and portals they provide.
What’s the biggest shift you’ve seen in the business intelligence landscape this year over previous years?
BB: This is the first year we’ve seen an increase in the adoption of advanced and predictive analytics embedded inside of applications. From an industry perspective, we’ve heard for a long time that advanced analytics was going to be the next hot thing. But the adoption has never really reflected the hype.
This is great news, because we’re finally seeing these capabilities go beyond the realm of data scientists, and actually moving towards operationalizing advanced analytics and making it more available and accessible to a wider audience. By making analytics available within the applications people use every day, they can make much more informed decisions within their daily work.
How has the importance of embedded analytics changed over the years?
BB: Every year, we ask application providers to estimate how much of the value they provide to end users is tied to data and analytics. This year the median value was 45 percent—two years ago it was 35 percent. This substantial jump shows that applications and portals provide more value than just helping manage business processes in sales, marketing, and finance. With analytics, they’re also able to inform users how well they’re doing and support more data-driven decisions.
When we take a step back and look at the larger trends of what’s happening in the world of software applications, one thing that we often talk about is the consumerization of technology. In our daily lives, we utilize technology to help us make virtually every decision. And when you look at consumer applications—the Amazons, Netflixes, and Facebooks of the world—they’re all centered on data. You might not think of them as analytic applications that serve up a wealth of data to inform decisions, because they’re wrapped up in really slick user experiences. But in fact, they provide analytic information to you where you most need it.
Now, people are craving this type of user experience within their business applications. So if we bring this concept back into the realm of embedded analytics, we can understand more of what business users expect from their applications today. They want to be served up information where and when they need it, at the moment they need it, in order to inform the decisions they make every day. And they want it to all be easy to use, so they don’t have to think about being trained up on analytics.
What does the future hold for embedded analytics?
BB: When we look at the future direction of business applications, every application is becoming an analytic application. From an implementation and user interface standpoint, it means businesses need to embed analytics very deeply within applications.
Too many people think of embedded analytics as having a reports module within an application where people can go to run reports and get the information they need to run their business. But embedded analytics is much more than that: It means embedding analytics deeper within the experience, deeper within your applications, so users can actually be informed about the business and take action based on that information all within the same context. It means creating a better user experience so your users can become much more efficient in the way they work every day.