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Data Analytics and Data Management Market

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Companies' investments in digital platforms are becoming pervasive, thus moving businesses into a new era. They first moved from a functional orientation to a process orientation and are now fundamentally shifting to a platform orientation. Digital platforms are already changing companies, whether they recognize it or not. The implications of platform thinking are very deep. Data are the lifeblood of a digital platform. But the implications of what companies must do to be able to apply their data in a timely way is significant.

The Gold Is Now Data

Businesses are becoming data-driven organizations, and companies that master how to apply their data are creating the most wealth. Five of the top 10 Fortune 500 companies are platform firms. I believe the market for data management and data analytics will explode. Our Everest Group assessment is that the global market for data and data analytics will be $135 billion by 2025. Furthermore, data management and data analytics will be one of the most important services and at a top function leading to the success of next-generation companies.

Business Management Implications

Process thinking and process organization focuses on the tangible results of a business process. To remain competitive today, companies must focus on the experience of their customer and employee ecosystems. Through digital platforms, companies can now support improving these experiences. As they grapple with this objective, at every level companies must modernize their operations.

The change from functional thinking to process thinking unleashed significant change, and change management efforts, in companies. It’s the same now with the shift from process to platform thinking. It’s hard to estimate how much time, effort and money companies will be forced to go through to find, cleanse, manage, secure and apply their data in a timely way.

Modernization dramatically necessitates increasing automation and realigning organizations along experience lines and away from process lines. This is happening today at the competitive level (in relationships with customers) and at the functional level (focusing on a mailroom function to improve the employee experience and data ingestion, for example).

The power of analytics is great when applied to customer and employee experience. But it’s only great if the company has the data. The problem is current technology estates and data vehicles are not designed for a data-driven world. They were designed to support a process world or a functional world. The result:

  • Data is dirty
  • Data is not robust
  • Data is partial, focusing on a specific activity or process, not focused on a unique customer or employee.
  • Data is not readily available; in most companies, some of the most actionable data sits in silos or is spread across multiple systems, making its access and use difficult and expensive.

When a company shifts to a platform perspective, the importance of data management moves to a different level that is an order of magnitude more difficult than data gathered in old process-oriented structures. The company must rethink how it captures data, how it cleans data, how it builds and stores data to be accessible by the broader platform, not just the piece of the technology estate that is dealing with it. The fact that platforms are not homogenous but are composed of many different pieces also complicates this.

Digital platforms are happening at every level in the company in a pervasive way to create flexibility, agility and crush the cost of current operations. Platform thinking requires cloud and big investments in automation.

Data Services Implications

Instead of organizing around business processes, companies are now starting to organize around data capture, data management and the application of data into and across the various platforms they are building. This causes a seismic change in terms of where companies spend money. Data’s importance is now many times what it used to be, and the importance is growing. Consequently, the amount of money that companies will spend on managing data will be many times what they currently spend.

Data management doesn’t happen by accident, and companies will need to spend a ton of money on data management. It’s inevitable. What companies can do with data analytics is incredibly powerful, but inconveniently, it’s also expensive.

Recognizing that data is no longer a byproduct but, rather, the product and how they operate, companies are scrambling internally with how to come to grips with data implications and platform thinking. One of the problems companies face is an acute talent shortage of data management and analytics skills.

The new market is apparent to vendors, as is the talent challenge. Service providers are scrambling to invest in talent and reposition themselves to get a slice of this very large and potentially lucrative marketplace.