Data Visualization Software
BuyerView | 2014
Every year, Software Advice is contacted by hundreds of buyers looking for business intelligence (BI) software with a focus on dashboards and other data visualization tools. This provides us with unparalleled insight into the needs and requirements of these software buyers.
We recently analyzed a random selection of 385 of these interactions to uncover buyers’ most common pain points and their reasons for purchasing new software. This report outlines the trends we uncovered.
While many BI systems are helpful for joining disparate data sources and even mining that data for patterns and trends, the buyers included in this sample stipulated the need for visual reporting—the ability to create graphical or other representations of company data, generally in a dashboard format—as most important.
Thus, when asked which applications they wanted, 70 percent of these buyers said they were seeking dashboard or data visualization solutions with reporting capabilities.
Carl Forrest, the co-founder and director of business analytics at DataSetGo, a BI and analytics startup based in Washington, D.C., says that number may even be low.
“I would say 70 percent under-represents just how important data visualization [for reporting purposes] has become,” Forrest says. “[This] is the emerging topic of discourse in business intelligence and analytics, and for good reason … The end deliverable [of a BI project] oftentimes is a model, or a visualization or a dashboard.”
Forty-six percent of buyers also expressed interest in solutions that could generate and provide an overview of Key Performance Indicators (KPIs), which are general metrics often used for reporting, and are common attributes of dashboard and other data visualization software.
Meanwhile, 25 percent of buyers specifically mentioned the ability to “drill down” or “slice and dice” their data using visual methods (the “data management” category). While this may sound similar to the reporting functions mentioned above, these buyers were more interested in digging into their data on the back end, before presenting it, rather than in the ability to graphically present that data on the front end.
Meanwhile, 21 percent of buyers specifically mentioned they were seeking a data warehousing application, while 13 percent wanted a query tool to assist with managing data.
Another 13 of percent of buyers expressed interest in online analytical processing (OLAP), while 9 percent mentioned extract, transform and load (ETL) capabilities—both of which are common BI buzzwords that refer to different methods for data management and analysis.
Despite the fact that predictive or forecasting applications have gained popularity in recent years, only 8 percent of buyers in our sample expressed interest in them. However, Forrest says this is in line with what he’s observed about smaller businesses (which he defines as those with less than $1 billion in annual revenue).
“‘Big Data’ is the buzzword du jour, but the truth is, I don’t think most smaller businesses are ready for [predictive or forecasting features], or could even benefit from them,” he says. He adds that, as a trained economist, he’s familiar with how such predictive models can fail.
“While our capacity to forecast has greatly improved, there are still far too many unknown variables to accurately predict into the future at an aggregated level,” he says.
When asked about integration preferences for their new software, almost all of the prospective buyers we spoke to were interested in evaluating only an “integrated suite,” which in this case referred to a single BI system that houses dashboard or data visualization capabilities in addition to other, related applications.
Four percent of organizations said they wanted one “best-of-breed” solution—that is, a single BI application only for dashboards or data visualizations—and only 1 percent wanted multiple best-of-breed applications.
Surprisingly, 82 percent of the buyers we sampled had not yet made a decision on a deployment model. Among those who had, however, the decision was almost evenly split, with 49 percent preferring an on-premise solution and 51 percent preferring a Web-based model.
This was somewhat similar to BI software buyers overall, 84 percent of whom had not yet made a decision on a deployment model. Among those who had, 66 percent preferred an on-premise solution, while 31 percent preferred a cloud-based one. Three percent had not made a decision.
The manufacturing and healthcare industries were the most represented among prospective buyers, with each group making up 10 percent of our sample.
“The high representation of manufacturing makes sense, especially from a supply chain management perspective,” Forrest says. “I’ve spoken with a few manufacturers who are completely fed up with massive Excel spreadsheets and the headaches they can cause [with internal supply chain management systems]. Humans weren’t meant to analyze rows and rows of data. It all starts to look the same.“
Forrest says that tools such as Tableau (a BI tool that produces interactive data visualizations) can digest these large amounts of data and transform them into an easily accessible visualization.
Another 8 percent of buyers in our sample were from the banking and financial industry, while an additional 7 percent were from the software industry. Buyers from the government made up 7 percent of the sample, while businesses in the non-profit and retail sectors each comprised 5 percent of prospective buyers.
The "Other" category included industries that each, on their own, accounted for 4 percent or less of the sample, such as distribution, education and consulting.
While our research of buyers in the overall BI market revealed that the majority were not IT professionals, specifically looking at buyers who were evaluating BI products for their dashboard and other data visualization capabilities revealed the opposite.
Forty-six percent of these buyers listed themselves as IT professionals, and ran the gamut from IT managers to IT directors and consultants. Of these IT professionals, 34 percent (15 percent of of the overall sample) listed a BI-specific role, such as “BI manager” or “business intelligence analyst,” as their title.
The next-largest group of buyers (20 percent) held non-IT managerial roles, such as “operations manager,” followed by 9 percent of buyers who were C-suite executives. Buyers who listed a financial role, such as “accountant,” made up an additional 6 percent of the sample, while buyers in marketing or sales roles made up another 6 percent.
Titles that comprised the “Other” category included consultants, education specialists, industrial engineers and other diverse job titles unrelated to the categories listed in the above chart.
Forrest said he wasn’t surprised by these results, given what he termed “the historic communication disconnect between IT and the C-level.”
In fact, when it comes to deciding the specifics of a BI solution, Forrest says IT staff are often better-equipped than executives to make well-informed decisions.
He adds that because some legacy BI solutions can be “obtuse,” IT staff may be better suited to find solutions that are more exciting and can help “bring data to life.”
“Manipulating data should be fun and interesting,” he says. “I’ve never had fun in Cognos. I’ve never felt like Excel ever brought data to life.”
Thirty percent of the buyers we spoke to were trying to find more effective methods for managing the data their business or company had compiled.
Forrest says that this may be indicative of the way data visualizations and visual reporting are evolving: moving from static reports to far more interactive means of data discovery.
“Before, executives delegated visualization creation to analysts, who then conveyed their insights via static visualizations in Excel,” Forrest says. “This no longer cuts it.”
Static models only inform what the analyst sees, he explains. “In order to drill down and derive deeper insights than what an initial visualization might provide, the data needs to be bombarded from all sides to test the robustness of the visualization it illustrates.”
Another 26 percent of buyers said they were evaluating new solutions because they wanted more flexible visualizations than the system they currently had—most often an ERP, CRM or other BI system—was able to provide.
Corresponding to the emphasis on reporting applications, 18 percent of the buyers we sampled said they were evaluating new solutions primarily because they wanted better reporting functions than their current system was providing.
Eleven percent of buyers said they simply wanted to streamline or organize processes within their business; another 9 percent said they were looking for a system with greater “ease-of-use” than their current solution.
Six percent of buyers said they were evaluating new solutions due to company growth.
Thirty percent of the buyers we sampled were using an enterprise resource planning (ERP) or customer relationship management (CRM) system to keep track of their business information. Another 20 percent were using databases along with separate reporting software to keep track of their company data—and 15 percent were already using BI software, but were unhappy with it.
An additional 22 percent of buyers said that they were using spreadsheet software, such as Microsoft Excel, to manage their data, while 13 percent said they had no data management solution in place whatsoever.
Altogether, the vast majority of buyers (87 percent) were already using some type of software system—BI or otherwise—for business intelligence purposes, but were now looking to upgrade.
Broken down by annual revenue, our sample included buyers from a variety of business sizes. While this number was spread rather evenly from smaller annual revenues to larger ones, the sample did include more buyers from organizations with over $100 million in annual revenue than many of the other software markets we research (4 percent from organizations with $301-500 million; 17 percent from organizations with $101-300 million; 14 percent from organizations with $51-100 million).
Buyers from organizations with $6-25 million in annual revenue made up 20 percent of the sample—the largest single group. Buyers from organizations with $1-5 million in annual revenue made up the smallest group, at 3 percent.
Additionally, 36 percent of buyers in our sample were from organizations with between 101 and 500 employees, while another 26 percent were from organizations with over 1,000 employees. Organizations with six to 10 employees made up the smallest portion of the sample (just 1 percent).
Software Advice regularly speaks with buyers who contact us seeking new BI software with a focus on dashboards and other data visualization capabilities. To create this report, we randomly selected 385 of these phone interactions from 2012-2014 to analyze. These findings exclusively represent those buyers who contacted Software Advice for guidance on software selection, and may not be indicative of the market as a whole.
If you’d like to further discuss this report or obtain access to any of the charts above, feel free to contact me at firstname.lastname@example.org.