What do shopping for an advanced analytics solution and Chutes and Ladders have in common? For prospective analytics buyers, trying to sort through the market is a bit like playing the game: just when they think they’ve made progress, they often find themselves tumbling right back where they started, as far away from their goal as when they began their efforts. All that progress wiped out in an instant.
So why do companies get this sliding, tumbling feeling when trying to nail down requirements for analytics? A number of factors contribute, and we’ll get into a few key ones here. It starts with the fact that over the past decade the field of business intelligence has evolved significantly and done so under the umbrella of analytics. Added to that are the step-change advancements being made in the emerging market of advanced analytics, driven by Industrie 4.0, the Industrial Internet of Things (IIoT), and the massive digitization occurring across many aspects of business.
Emerging Market Syndrome Meets Confusing Marketing Syndrome
Let’s start with emerging markets. Very few business situations are ripe for confusion quite like emerging markets. After all, by simple definition they tend to be: http://www.dictionary.com/browse/emerging.
In emerging markets, new means for solving problems are being offered, often by new market entrants and entrepreneurs, and end users are still trying to understand how they work. As they gain a better understanding of what these new solutions can do, end users then get more detailed in what they ask for and vendors shift their solution positioning accordingly.
The advanced analytics market is no different. End users are trying to sort it all out. Solutions are being dubbed predictive and prescriptive, offered as applications and platforms, and marketed with a mix of confusing terms such as adaptive algorithms, cognitive analysis, data models, machine learning, and many more.
Solution providers are also grappling with pricing, sales cycles, service levels, deployment models, and roadmaps. Investors, such as venture capital firms, are pushing solution providers to maximize a return on investment. This often means solution providers are chasing markets and use cases for which they are not completely prepared. All of these dynamics are clearly evident in the advanced analytics market.
Adding to the complexity is the fact that even as new markets emerge, existing ones don’t stop moving. In this instance, advanced analytics is, of course, the emerging market while business intelligence is the existing one.
For the last decade, vendors have worked diligently to improve their business intelligence solutions. They moved from basic performance reporting—providing tools that harness data to describe what is occurring (or has)—to increasingly sophisticated but easy-to-use ways of visualizing and drilling down into that data. The improvement in visualization and drill down enabled workers to discover the relationship between data, outcomes, and some root causes. This means of using data, quickly dubbed “analytics,” often was offered within standalone applications and then was embedded into core operational systems. These solutions are now often sold as “embedded analytics,” and these types of analytics are often lumped in with more advanced ones.
There is another element of confusion being added to the mix, too. While business intelligence and advanced analytics aren’t the same thing, there can be a direct relationship between the two. Many advanced analytics providers leverage or integrate into legacy business intelligence solutions for visualization. Buyers are then left puzzled as to where business intelligence ends and advanced analytics picks up, or if that’s even a valid way to view the market and many solutions being offered.
As if there aren’t enough confusing factors to deal with, the analytics market (for both business intelligence and advanced analytics) is very competitive, which makes for a marketing nightmare. The noise is garbled and deafening, with many solution elements being described imprecisely. As a result, it’s very difficult to strip away the marketing spin. It leaves the buyer skeptical about what tools are being bought, how they work, and what effort it requires to obtain the benefits proffered.
Sorting it all out
The overall result—an emerging/existing market mashup—is what many end users are wading into today. It’s like peeling back the proverbial many-layered onion. That is, if someone first cut it up into 1000 pieces and threw it into a big pot along with 100 similarly diced onions.
What pieces of the onion do you pay attention to? Or, are they all equally important? Effectively answering these questions requires some education coupled with conversational persistence with solution providers. From an education perspective, it doesn’t mean you need try to become a data scientist or wade into complex mathematical concepts. Instead, it’s more about determining what specific elements of analytics solutions are most relevant to the business environment and how solutions differ in managing those elements. Some of these elements and related questions on which to be educated include:
- The model: Are certain model creation approaches more appropriate and accurate for my environment? How does model customization or retraining impact solutions?
- Data integration: I’ve been integrating data sources for a long time, why is this different? Or is it?
- Role of cloud: Why do I need cloud, or do I? How does the role of the cloud change as analytics get closer to the edge?
- Data scientists and subject matter experts: Do I need both, and when? How do I determine my level of organizational effort?
- Platforms and applications: How will platforms and applications evolve? How do I factor that into the buying process?
Armed with some knowledge on these key concepts, you can confidently engage advanced analytics providers to determine if and how well the various solutions being offered might benefit you.
ARC is clarifying the advanced analytics market
In our ongoing commitment to deliver vision, experience, and answers for industry, ARC continues to provide guidance on the topic of analytics.
We will continue to blog (here is another recent post on the topic) and speak at conferences across the globe about analytics. Additionally, in the coming months, we will release multiple strategy reports, some industry-specific and others agnostic. As well, we will continue to work with clients on technology and supplier selection projects, a number of which are already underway.
At our 21st Annual ARC Industry Forum in Orlando in February of 2017, we will also host multiple sessions that will dig more deeply into advanced analytics. The Forum will include a workshop on how to determine requirements for an advanced analytics request for proposal (RFP) process. For information on any of the above, please contact your client manager, send us a note indicating your interest, or shoot me an email.