BI spending outpaces rest of IT market

Spending on business intelligence (BI) technology will outstrip the rest of the IT market this year as companies attempt to better understand their business data, according to analyst IDC.

Sales growth is expected to hit seven to 10 per cent this year and next, compared to a general IT growth forecast of five to six per cent. BI revenues hit $12.8bn worldwide in 2002-3, $3.8bn of which was in western Europe.

"The vast majority of enterprises using business intelligence are still focused on building up capabilities internally or buying off-the-shelf packages," Dan Vesset, IDC analytics and data warehousing research manager, told delegates at the analyst firm's Business Intelligence 2004 conference in London.

Vesset said a measure of the sector's success was its continued growth during the recent economic downturn, when every other IT sector declined. The growth in the use of predictive analytics for more granular BI would maintain this growth, he added.

IDC also said that best practices were emerging from the growing maturity of BI projects.

Business performance management projects involving process redesign were likely to give the best return on investment, followed by operational and production-related BI projects and those linked to customer relationship management systems.

Vesset urged organisations to secure executive-level sponsorship for BI projects and to be prepared to work on business process transformation programmes to reflect changes affecting internal processes and roles.

He also recommended that any company embarking on a BI project should do so incrementally, starting with a relatively small project.

"Many BI programmes are iterative in nature and have an almost viral take-up in an organisation once you realise what can be [achieved] when you share data in a collaborative environment," he said.

Earlier this month analyst Forrester also predicted more spending on BI this year as companies try to get more from their existing IT infrastructure, using BI to expose the data already collected and stored by IT.