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Analytics critical to business success, says IDC

According to IDC, New Zealand organisations now consider data analytics to be critical to gain access to the business and market insights necessary for effective decision-making.

IDC says NZ businesses that have not adopted analytics are finding themselves increasingly disadvantaged compared to those that do.

Where once only large organisations had access to these tools, IDC says the availability of outsourced analytics services is levelling the playing field between organisations having the capability to perform analytics in-house and those that do not.

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“Smaller organisations constrained by budgets, or larger organisations constrained by on-premise infrastructure are overcoming these constraints through utilising external providers,” the analyst firm says.

It estimates 46 percent of New Zealand organisations will invest in analytics or big data solutions in 2020 with most of this investment going to external analytics service providers.

“In 2019, 79 percent of New Zealand organisations used analytics services up from 65 percent in the 2017,” IDC says. “These trends demonstrate how analytics is rapidly shifting from a nice-to-have function to one of strategic importance.”

Chayse Gorton, A/NZ market analyst for IT services, said analytics providers that are able to deliver across the value chain of business analytics services, from information management and analysis, to business inference, will stand to gain a larger market share in 2020.

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“Organisations are already moving beyond viewing analytics as a traditional metric system, towards viewing analytics as an enabler of competitive differentiation, in comparison to their peers and competitors,” he said.

“Therefore, analytics providers who communicate their differentiating capabilities, particularly industry specialisation, will become highly valued.”

IDC estimates spending on analytics-related IT services will reach $261 million in 2019, and $468 million in 2023. It is forecasting analytics-related IT services revenue to increase its share of the overall IT services market increase from seven percent in 2019 to 12 percent in 2023.

IDC analytics revenue will grow much faster than the overall IT services market in this period: 15.7 percent CAGR compared to 1.7 percent.