The International Institute for Analytics this week released nine predictions for business analytics in 2011 — including a prediction that it won't take much economic growth next year to spark huge growth for analytics.
The group is predicting strong growth for analytics, with a growing competitive edge for companies using analytics.
Business Analytics Predictions
Here's IIA's predictions for the year ahead.
1. With even modest economic growth in 2011, the use of analytics as a competitive differentiator in selected industries will explode. IIA says the biggest industries for analytics will be banking, insurance, healthcare, telecom, retail, energy, media and transportation. "IIA expects 2011 to mark the beginning of a multi-year cycle where the sparks of economic growth ignite a tinderbox of technology and business forces that are set to drive mainstream adoption of business analytics across commercial and government sectors," the group said.
2. The gap between analytical innovators and those who do not invest in analytics will widen in high-profile ways. Pharmaceuticals, entertainment, airlines and baseball will be some of the industries where the difference between innovators and laggards will begin to stand out, the group said.
3. The roles of marketing, sales, human resources, IT management, and finance will continue to be transformed by the use of analytics. HR is "one of the fastest-growing areas for analytics," the group said, while information technology (IT) will "shift to BI and analytics support, instead of transactions."
4. 15 Chief Analytics Officers (CAO) will be appointed in 2011. Not everyone will use the CAO title, but there are several already, and "many other firms and organizations are realizing that they need more centralized management of analytical capabilities," IIA said.
5. The availability of strong business-focused analytical talent will be the greatest constraint on organizations' analytical capabilities. "New programs from universities and other professional training groups aimed at churning out more analytical professionals will be announced but they will lag behind the demand," the group predicted.
6. Database capacity, processor speeds and software enhancements will continue to drive even more sophisticated applications of analytics. Analytical and database environments will continue to converge, and the trend will accelerate, IIA said.
7. Newer analytical methods in the areas of text analytics, survival mining, time series mining, net-lift modeling, and data visualization will grow in use. Data management, social media analytics and other areas like the effectiveness and need for sales promotions will be big areas, the group said.
8. Consolidation of analytics software players will continue; entry of specialized analytics software and service providers will accelerate. "The few remaining independent analytical software firms, such as SAS and KXEN, will see increasing interest from large IT firms who don't have a significant analytical capability," such as HP and Oracle. IBM will continue to make analytics acquisitions, Davenport said on the conference call, and SAP could also seek to improve its analytics capabilities.
9. Regulatory and privacy constraints will continue to hamper growth of marketing analytics. The Fair Credit Reporting Act and web tracking and analytics will dominate U.S. regulatory and legislative initiatives, while Europe "will continue to lead in the development of relatively restrictive customer data and analytical policies," IIA said. "Paradoxically, the comfort caused by these policies will likely lead to consumers to part with more information than in the U.S."