Do you have an idea on how businesses get valuable information about their consumers? If each country has a highly secretive intelligence agency to monitor threats to their nation, businesses also have something similar. It is called business intelligence and analytics and the sole purpose of this process is to gather information about consumer purchases. Business intelligence (BI) is heavily invested upon by companies.
Business Intelligence and Analytics is part of the IT sector, one of the fastest growing sectors today. The IDC has researched that the IT sector will earn over $50 billion by 2016. This is due to consumers and companies willing to spend more than $200 billion in total from 2013 to 2016. But, what does BI have to do with the increase in spending in the IT sector?
Chief Intelligence Officers (CIO) are really not baffled with this information. Business intelligence and analytics is not cheap. To fund the resources needed, a good deal of money will be involved. CIOs know that to gather business data as well as consumer data, companies must be prepared to spend a lot. However, what's surprising here is that companies will overspend for business intelligence and analytics.
The estimate of the increase is 20 percent which is around $40 billion. This amount is simply for business intelligence and analytics. To be more specific, here are the areas companies will be overpaying for:
* There will be overspending on software licenses as companies will pay higher than market prices. With the demand, vendor prices are inflated.
* Business intelligence project implementation will become more complex. Hence, implementation will need more funding.
* There will be spending on yearly costs that increase yearly as well. Such costs include subscription costs, maintenance and support.
* There will be overspending on enhancing the functionality of the business intelligence system. Companies will always want to upgrade it.
This begs the question, will companies be willing to overspend on business intelligence and analytics? Most likely, they are. BI and analytics are very powerful tools for any company and it's a worthwhile investment. However, to optimize its benefits, companies must be prepared to pay or shall I say, overpay.
On the other hand, a wise company can always develop a strategy to prevent overspending. Before paying for renewals and improvements, companies can always do some research on the fair market prices. After all, their current BI and analytics should help them gain insight to save on projects and expenditures.
Business Intelligence and Analytics is part of the IT sector, one of the fastest growing sectors today. The IDC has researched that the IT sector will earn over $50 billion by 2016. This is due to consumers and companies willing to spend more than $200 billion in total from 2013 to 2016. But, what does BI have to do with the increase in spending in the IT sector?
Chief Intelligence Officers (CIO) are really not baffled with this information. Business intelligence and analytics is not cheap. To fund the resources needed, a good deal of money will be involved. CIOs know that to gather business data as well as consumer data, companies must be prepared to spend a lot. However, what's surprising here is that companies will overspend for business intelligence and analytics.
The estimate of the increase is 20 percent which is around $40 billion. This amount is simply for business intelligence and analytics. To be more specific, here are the areas companies will be overpaying for:
* There will be overspending on software licenses as companies will pay higher than market prices. With the demand, vendor prices are inflated.
* Business intelligence project implementation will become more complex. Hence, implementation will need more funding.
* There will be spending on yearly costs that increase yearly as well. Such costs include subscription costs, maintenance and support.
* There will be overspending on enhancing the functionality of the business intelligence system. Companies will always want to upgrade it.
This begs the question, will companies be willing to overspend on business intelligence and analytics? Most likely, they are. BI and analytics are very powerful tools for any company and it's a worthwhile investment. However, to optimize its benefits, companies must be prepared to pay or shall I say, overpay.
On the other hand, a wise company can always develop a strategy to prevent overspending. Before paying for renewals and improvements, companies can always do some research on the fair market prices. After all, their current BI and analytics should help them gain insight to save on projects and expenditures.
About the Author:
Joseph B. Kappernick specializes in helping Fortune 500 companies save money. He recommends that you visit NPI Financial to learn more about telecom cost management service
The Communication Blog
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