The benefits of embedded analytics
The top business benefits of embedded analytics and BI include improving sales, gaining competitive advantages and getting maximum value from data to improve performance.
Traditional business intelligence platforms are designed to be used by expert users, data scientists or statisticians. These valuable employees wind up spending too much time producing routine reports, and access to key data and insights is limited and slow.
Embedded analytics upends this paradigm, putting analytics inside the applications end users spend their time in. James Housteau, data scientist at Capgemini, said embedded analytics gets the information to the difference-makers.
"The key word there is embedded," Housteau said. "It is getting the analytics into the hands of those who can make it actionable."
According to a 2021 survey of software developers and IT leaders by Reveal BI, nearly half of companies saw an increase in the use of data and analytics in the previous year -- only 15% reported a decrease.
Part of the reason was the pandemic-related acceleration of digital transformation efforts, the report said, and part a natural progression and evolution of the analytics market. The survey also revealed growing adoption of embedded analytics.
Gain competitive advantage
According to the Reveal BI survey, 33% of respondents cited the most common use case for embedded analytics was to help companies gain competitive advantages.
SaaS platforms have long been embedding analytics into their systems, said Doug Henschen, analyst at Constellation Research. In recent years, enterprise application vendors including Infor, Microsoft, Oracle, SAP, Sage and Salesforce have also added prebuilt dashboards and reporting capabilities to their applications.
But today, all kinds of companies, not just software vendors, are embedding analytics.
Financial firms will add tools to their apps and websites to help customers analyze their spending, for example. Utilities can help customers track their usage patterns and compare themselves with similar households.
"A quick look at the web and mobile applications with which most people do business every day confirms that customer interactions and customer relationships are now decidedly digital and data-driven," Henschen said.
Using prebuilt embedded analytics means companies can add this kind of unique, differentiating functionality without having to reinvent dashboards and other analytical features from scratch. Henschen said this reduces the need for specialized developers and expensive data engineers.
"It also speeds overall product development and thus reduces time to market," he added.
According to the Reveal BI survey, the second most common use case for embedded analytics was that it enabled robust visualizations and analytical functions, cited by 26% of respondents.
Enable users to make data-driven decisions
Another use case for embedded analytics was to enable users to make data-driven decisions. This was cited by 23% of respondents to the Reveal BI survey.
Companies have lots of data, said Taylor Adams, leader in U.S. enterprise performance management at EY Technology Consulting.
The question they need to ask, Adams said, is "now how do I answer questions off of it?"
One very relevant example today is modeling different possible business scenarios. This can help companies deal with pandemic-related supply chain disruptions, the bottom suddenly falling out of their business or a sudden spike in demand.
"At the onset of COVID-19, everyone was trying to run different scenarios," Adams said. "Let's look at things that could happen so we don't get caught off guard again. The increasing interest in scenario modeling is hitting every aspect of the business right now because business as usual has been thrown off so much."
Over the past few years, many enterprise systems have been adding this functionality, he said. Supply chain management is one major area, another is finance, and a third is sales.
"It's easier for a user to just stay within the tool to answer questions," Adams said. "You no longer have to go outside the application."
According to a report released last year by the Harvard Business Review, 87% of business executives said their organization would be more successful if front-line workers were empowered to make important decisions in the moment, and 86% said front-line workers need better technology-enabled insight to be able to make good decisions.
In addition, 72% said productivity has increased from empowering front-line workers, but only a fifth have equipped their front-line workers with the technology they need.
A simple instance of embedded analytics that have long been available in e-commerce systems is product recommendations. A customer looking at an item can see suggestions of what other customers have bought or other products they might want to look at.
Companies are increasingly augmenting this basic information with real-time supply chain data, said Amaresh Tripathy, global leader of analytics at Genpact.
For example, a particular part might be back-ordered, and the customer portal would provide information on when it might be available -- or what other parts do the same thing and are more quickly available. Or it might offer expedited shipping at an additional price, Tripathy said.
"We're seeing interaction between supply chain and CRM happening," he said. "And between finance and supply chain."
These kinds of embedded analytics aren't just for customer portals, he added. In many business-to-business companies, much of a salesperson's job involves customer management instead of selling. They're following up on the status of orders, for example.
Integrating supply chain information and other data into the salesperson's workflow can make the salesperson more efficient and lets them spend more time actually selling, Tripathy said.
Get value from their data
According to a survey of senior executives released earlier this year, the value of data is universally acknowledged. Today, 99% of companies are investing in data initiatives, and 96% report measurable business outcomes.
But that doesn't mean they're getting all the value they can out of that data: The survey found only 24% report that they've become a data-driven organization. The biggest obstacle? Culture. In fact, 92% of companies say that people, processes and change management are their biggest impediments to becoming data-driven organizations.
Embedding analytics into existing business processes allows employees to get the benefits of the analytics without requiring a great deal of training on new platforms.