Embedded Analytics: Business Value and Growth Trends
As per Gartner, Embedded analytics is the use of reporting and analytic capabilities in transactional business applications. These capabilities can reside outside the application, reusing the analytic infrastructure built by many enterprises, but must be easily accessible from inside the application, without forcing users to switch between systems. The integration of a business intelligence (BI) platform with the application architecture will enable users to choose where in the business process the analytics should be embedded.
Embedded analytics capabilities are tightly integrated into existing systems (like your CRM, ERP, marketing automation, and/or financial systems) that bring additional awareness, context, or analytic capability to support decision-making related to very specific tasks. These tasks may require data from multiple systems or aggregated views, but the output is not centralized overview of information (like most BI systems). It is targeted information to support a decision or action in the context in which that decision or action takes place.
A good example of Embedded Analytics is Amazon. Amazon has great processes to support the ecommerce experience – including fast shipping, low prices, and Buy Now with 1-Click. But Amazon also satisfies customers’ informational needs by providing product ratings, video reviews, and suggested products. By embedding relevant analytics information at the point of transaction, Amazon creates a great customer experience while helping improve ecommerce conversions avoiding need to skip to other pages for additional information and decision making.
Now that we have a reasonable understanding about the features of Embedded Analytics, lets take a look at how Embedded Analytics can potentially drive value for businesses as shared by Sisense:
- Business Value through Increased User Adoption of BI Across an Enterprise: Even when management in an organization is convinced of the value of business intelligence, the real challenge may be getting end-users to adopt BI. Asking users to change their habits or to log into yet another system may fail or lead to lower productivity and/or increased security risks. Any analytics software solution can become shelfware if targeted users are obliged to jump through too many hoops to access it. Embedded analytics avoids this problem by offering users BI capability directly within the application they are already using. The right analytics widgets can be customized to make their use seamless and familiar for users. Analysis gains in agility, as users start asking “spur-of-the-moment” questions about the data in the system, flipping easily between tasks and questions. When BI widgets and dashboards are also properly adapted to mobile device usage, adoption can spread even further and faster.
- Business Value from Analytics for SMBs with Scattered Datasets: Small and medium-sized businesses often have different starting points for BI, compared to their Fortune 500 counterparts. SMBs (small and midsize businesses) may struggle with a lack of centralized IT resources. Datasets scattered around several systems may offer no guarantee of consistency or compatibility. Software and service providers can meet these SMB needs by embedding analytics into the SMB solutions they provide. The right embedded analytics solution offers capabilities to aggregate, store, clean, and analyze data, with an intuitive user interface and dashboards for SMB business users. SMBs now access BI capabilities which were up until now only available to larger enterprises, and software and service providers add value and engage in new revenue opportunities. As an example, Boost-inn offers a leading hotel management solution for multi-site, mid-sized hotel chains. Embedded analytics in Boost-inn’s solution using components from Sisense allow data from different sources and in different languages to be connected and prepared for analysis. Low cost of ownership and easily customizable dashboards mean that the hotels that are Boost-inn clients now receive valuable insights from their own customers that can be easily translated into opportunities for improving their hotel service and occupancy.
- Business Value from Faster, Higher-Value BI Capability for a Service/Solution Provider: Service providers and business application vendors do not necessarily possess the skills required to make data analytics software. However, they can use components from a software product company specialized in business intelligence (BI) technology and embed these components into their technology. The positive differentiation that embedded analytics brings to their applications leads to better user experiences, higher customer loyalty, and new/increased revenue streams. Leveraging robust existing analytics components accelerates their time to market, while minimizing their own product development costs. A leading provider of intellectual property management software, Anaqua has embedded analytics components into its application to help its customers analyze multiple IP portfolios, raise effectiveness, and lower costs and risks. In another sector, for EEG Events Group (EEG), a world-class global event management service, the advantage of using embedded analytics is simple. It helps EEG customers go home happier after an event, by consolidating event data into one report with better insights into how running the event has improved their businesses.
Lets now take a broader look at the Embedded Analytics market and growth drivers. A recent report gives some interesting details of this area:
- Adoption of self-service analytics driving the growth of embedded analytics. MarketsandMarkets estimates the global embedded analytics market to grow from USD 26.77 billion in 2017 to USD 51.78 billion by 2022, at a Compound Annual Growth Rate (CAGR) of 14.1%. The embedded analytics market is growing rapidly because of the transition from the traditional Business Intelligence (BI) techniques to advanced BI and analytics techniques, which can be managed and utilized from any place, at any time, and the massive surge in the self-service analytics trend across industries.
- The IT business function is expected to have the largest market size in 2022. Embedded analytics allows big data from IT to be converted into relevant and actionable insights for a quick problem resolution, without having to export the data. It enables organizations to extract insights from key operational data types, such as log files, performance metrics, events, and trouble tickets, so that they can proactively avoid outages, achieve a faster mean time to repair, and realize cost savings through greater operational efficiency from any place, within the application. Therefore, the IT business function is estimated to have the largest market share in 2022.
- Healthcare and life sciences industry is expected to have the highest growth rate during the forecast period. Embedded analytics solutions have been deployed across various industries, including Banking, Financial Services, and Insurance (BFSI); telecommunications and IT; retail and consumer goods; manufacturing; healthcare and life sciences; energy and utilities; transportation and logistics; media and entertainment; government and defense; and others (product development and legal). The healthcare and life sciences industry is expected to witness the highest CAGR during the forecast period because of the increasing need for managing the real-time data coming from various healthcare activities, such as patient’s sleep analysis and calories burnt, based on the physical activities conducted.
- North America is expected to hold the largest market share. North America, followed by Europe, is expected to continue being the largest revenue-generating region for the embedded analytics vendors, for the next 5 years. This is mainly due to the presence of various developed economies, such as Canada and the US, and because of the high focus on innovations through R&D and technology across industries. Asia Pacific (APAC) is expected to be the highest growing region in the embedded analytics market because of the increasing adoption of Internet of Things (IoT) and smart technologies, and government initiatives, such as smart cities in the APAC countries, including China and India.
- Microsoft Corporation (US)
- IBM (US)
- SAP SE (Germany)
- SAS Institute (US)
- Oracle Corporation (US)
- MicroStrategy Incorporated (US)
- Tableau Software (US)
- TIBCO Software (US)
- Birst (US)
- Logi Analytics (US)
- QlikTech International (US)
- Sisense (US)
- Information Builders (US)
- OpenText (Canada)
- Yellowfin International (Australia)