Business Intelligence / Analytics M&A Has Exploded in the Last 2.5 Years



September 21, 2022

2021 and 2022 have seen a huge surge in M&A transactions in the BI/Analytics market as companies seek more efficient ways to gather useful data across business operations and customer behaviour.

2020 saw 127 deals here with a total valuation of $1.4B. This skyrocketed in 2021 to 210 deals with $11.3B total value. 2022 has seen a further massive increase with 191 deals as of mid-September with a total value of $16B.

The last 2.5 years have seen increased focus by organizations on gathering usable business intelligence to drive better decision-making and catch potential issues or areas of concern that need to be corrected. With an economy that is showing signs of instability and unpredictability, long-term business resiliency is of the utmost importance.

According to S&P 451 Research, the expected benefits of being more data-driven have become highly strategic. Today’s top expected benefits of being more data-driven include improving/automating business processes (41%) and increasing agility of decision-making (40%). These speak to long-term business strength, as opposed to before the pandemic, when the top-ranked responses of lowering costs and increasing sales were associated with immediate business performance.

Underscoring this shift in the importance of data is the emergence of the chief data officer (CDO) role to organizations. Today, 39% of survey respondents report that their organization has a CDO, and of that group, 47% say the CDO reports directly to the CEO. In the survey, respondents were asked to report to what extent strategic decisions within their organization are currently data-driven (i.e., determined by or dependent on the collection or analysis of data). Overall, 64% of respondents in this current survey are from a data-driver organization, 33% are from an organization where few decisions are based on data (called data-drifters), and a very small remainder does not know how data-driven their organization is.

Strong growth in the CDO position shows that organizations are growing into this new data-driven decision process and are supporting the CDO role that can equally coordinate strategy for minimizing data risk and maximizing data leverage by overseeing initiatives such as data privacy and self-service analytics.

The biggest barriers to implementing data-driven decision in an organization include:

  • Data quality and consistency
  • Data exchange requirements with external parties
  • Data privacy
  • Availability of skilled resources or talent
  • Availability of budget
  • Support or guidance from senior leadership

Data driver organizations tend to adopt technology earlier and are subsequently more attuned to the potential challenges faced here such as security and data privacy. Only 27% of data drifters report having the framework in place associated with enterprise-wide integration and delivery of data. Less than half (47%) of data drifters report having a dedicated data engineering function – the function most often tasked with building and maintaining data pipelines that feed into common environments where data is consumed. Self-service programs are closely linked to a solid data culture, where data is leveraged across the organization to drive business strategy.

S&P 451's data suggests that CDOs who report directly to the CEO may be more strategic in their roles, with higher overall budget and a less-defined scope of projects. These roles are often well-suited to data driver organizations and businesses that are further along on the data maturity curve. However, CDOs that report to the CIO or CTO tend to be more tactical and project-oriented, which is often ideal for organizations looking to quickly assemble the basic building blocks of a data-driven strategy.

Technology providers selling into both data-driven and data-drifter organizations need to understand the approach needed for each of these target audiences based on where they are on the technology adoption spectrum, who is leading the project, and each group's unique needs. Vendors who understand this and have crafted well-articulated messages that resonate with each of these organizations (or even within an organization) are likely to find more success.

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