Bigger BI Budgets Are CIOs' Priority for '06
CIOs rank BI as their number one tech priority for 2006 and plan to increase their BI budgets by an average of 4.8 percent, according to Gartner's "2006 CIO Survey." "Companies have purchased almost $40 billion worth of enterprise applications, including ERP, CRM, and HR, during the past few years," says Kurt Schlegel, research director at Gartner. "This has generated significant volumes of data in support of the operational processes they automate. BI is designed to leverage this data in support of their enterprise application investments."
The market is estimated to reach $2.5 billion in 2006, a 6 percent increase over 2005. Overall, Gartner expects the BI market to grow at a solid pace during the next five years, with new license revenues experiencing a compound annual growth rate (CAGR) of 7.3 percent. In addition, larger organizations are increasing BI spending, especially as they work to comply with government regulations like the Sarbanes-Oxley Act.
The increasing scope of BI platforms to include more users and access more data sources also will spur market growth, according to the report. Traditionally, BI was used by senior executives and analysts, but many companies are now extending BI capabilities throughout the organization to other employees. BI platforms increasingly will rely on data from a broader array of applications and data sources, as opposed to solely databases.
Schlegel cautions that significant inhibitors remain, however, to the successful deployment and adoption of BI. Limited BI skills, a general perception that BI applications have a high cost of ownership, and difficulty in "quantifying the direct business benefits of better performance and improved decision making" will continue to hamper adoption, the report states.
Companies must develop the end-user skills to clear these hurdles, leveraging BI applications and changing the way information architecture and app portfolios are implemented and managed. "One of the keys for BI will be when companies move beyond looking at BI as just a data-mining tool and incorporate BI into the organization's strategic IT planning, " Schlegel says.
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