Business intelligence will be the top spending priority for IT executives in 2007, as enterprises emphasise the need to gather data and analyse company operations, a survey released this month shows.
Business intelligence was the third biggest priority in 2006, and the fifth biggest in 2005, according to annual surveys by research firm Saugatuck Technology and BusinessWeek Research Services.
Businesses have lots of information about customers in separate data sources and want to combine that data into a “single view” of their customers, says Judith Hurwitz of the research and consulting firm Hurwitz & Associates.
Data spread across several departments are “isolated from each other. In order to do business appropriately, you have to look at all aspects of that in a unified way,” Hurwitz says. “That’s the issue that’s keeping a lot of organisations focused on business intelligence and their data.”
Investments in business intelligence, such as improving data standardisation, reporting, communication and decision making, help make companies more agile “as they move towards real-time, on-demand business and IT environments,” Saugatuck notes.
Saugatuck’s worldwide survey polled 230 IT executives at companies with at least US$1 billion in annual revenue. After BI, the top spending priorities, in order, were ERP software upgrades, data warehousing, new custom applications, portal and collaboration software, security software and services, network upgrades, application integration, database software and upgrades, and business process management.The list shows that IT executives “plan to focus their 2007 investment strategies on leveraging existing data and information assets to provide better business insight and management,” states a research alert written by Bruce Guptill, a managing director of Saugatuck.
At least eight of the top 10 spending priorities will improve integration and availability of existing data and applications, he writes.
Network upgrades are the seventh highest priority listed by IT executives. Hurwitz says this recognises that internet infrastructure is the main driver behind business-to-business commerce.
“Organisations need to make sure they have the infrastructure to support the growing demands. People are continuing to refresh infrastructure whether it’s their line-of-business applications or their networks, or their data.”
Service-oriented architecture, an approach to building IT systems that’s centred around the deployment of reusable application components, fell from fifth to 11th as an IT spending priority in this year’s survey.
Hurwitz, co-author of the recent book Service Oriented Architecture for Dummies, says this does not indicate an actual drop in companies pursuing SOA. Application integration and other items on the top 10 list are directly related to SOA, which is too broad a category to be encompassed by a single item on the list, she says.
“SOA is sort of an architectural approach and you apply it to a lot of different problems,” she says.
Guptill writes that a broader emphasis on new custom applications is, in large part, caused by the increased deployment of SOA and supports the trends of integration, efficiency and effectiveness.
These trends “suggest a continued user investment focus on project-based IT, and imply a continuation of strict financial controls over IT spending for user firms — and continuation of a tough sales environment for IT vendors,” Guptill writes. “Vendors need to continue to improve margins even as they face smaller opportunities — although, more opportunities are likely to emerge.”