MONETIZING ANALYTICS FEATURES: Why Data Visualizations Will Never Be Enough
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- Joanna Watts
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1 MONETIZING ANALYTICS FEATURES: Why Data Visualizations Will Never Be Enough Go beyond basic embedded dashboards to differentiate your application and maximize the value of embedded analytics.
2 Table of Contents Data Visualizations Have Gone From Rare to Ubiquitous 1 If DataViz Is Old News, What s the Future of Analytics? 2 It Starts with Better Experiences: Embed More than Visualizations 3 Which Sophisticated Capabilities Will Carry Your Application Into the Future 4 Achieving Analytics Maturity: Build, Buy, or Both 6 Future Trends: What s the Next Differentiator? 8 Conclusion 9
3 Data Visualizations Have Gone From Rare to Ubiquitous Five years ago, data visualizations were a powerful way to differentiate a software application. Companies like Tableau (which raised over $250 million when it had its IPO in 2013) demonstrated an unmet need in the market for visually stunning dashboards. In turn, end users were thrilled with the bells and whistles of charts, graphs, and dashboards. With these capabilities came revenue: Five years ago, embedding even basic visualizations was often enough for product teams to charge more for their applications and set them apart from competitors. Today, though, free visualizations seem to be everywhere. Two trends in particular are forcing application providers to rethink how they offer analytics in their products Data visualizations are no longer driving revenue: Everyone from Google to Amazon now provides low-cost or no-cost visualization tools that drive down the perceived value of data visualizations. Users are coming to expect sophisticated analytics capabilities at little or no cost. End users expect more from analytic applications: Data visualizations are not only everywhere, they re better than ever. Data insights are frictionless, integrated into everything from daily driving performance (Progressive, State Farm) to home energy usage (Nest, Belkin). As rich, data-driven user experiences are increasingly intertwined with our daily lives, end users are demanding new standards for how they interact with their business data. When visualizations alone aren t enough to set an application apart, is there still a way for product teams to monetize embedded analytics? Yes but basic dashboards won t be enough. Read on for new ways to monetize your embedded analytics offerings. 1
4 If DataViz Is Old News, What s the Future of Analytics? Like every other feature in your application, the world of embedded analytics is not static. The outer bounds of capabilities are constantly evolving. At the same time, older capabilities like data visualizations which used to feel modern and innovative have become commoditized. UNIQENESS OF IMPLEMENTATION (doing something totally original The Shifting Requirements of Analytics Basic requirements are no longer enough to set your application apart. More advanced requirements are enough to differentiate you for now especially if you implement them in a unique way. As time goes on, the capabilities that were once revolutionary will be commoditized and no longer enough to differentiate your applicaiton or satisfy customers. Modern, sophisticated capabilities will set your application apart even if you implement them in a way that everyone else is doing. They re advanced enough to keep you competitive for years to come. BASIC CAPABILITIES: Dashboards, Data Connection, Visualizations ENHANCING THE BASICS: Single Sign-On, Security Integration STARTING TO DIFFERENTIATE: Embedded in Applications, User Interface Integration, White-Labeling ADVANCED CAPABILITIES: Workflow Integration, Write-Back to Database, Users Stay in the Application FUTURE-PROOF FEATURES: Embedded Self- Service, Seamless User Experience Ten years ago, standalone analytics tools were the epitome of capabilities. Today, the most advanced capabilities are embedded self-service with features like workflow and write-back and more features and functions are being added every year. In the future, new levels may incorporate emerging capabilities like smarter data preparation, predictive and prescriptive analytics, and even artificial intelligence. And as these innovative features become more commonplace, they ll earn placement on this chart and today s capabilities will be labeled basic. Get a Framework for Modern Analytics Capabilities 2
5 It Starts With Better Experiences: Embed More Than Visualizations Unlike traditional business intelligence (BI) tools, which require users to open a separate application for analysis, embedded analytics puts data in context of the applications users already love. By embedding analytics so deeply within your application that it all but disappears, you create a fluid user experience and encourage users to stay in the application. Deeply embedding analytics has three key benefits 1 Satisfy unmet user demand The State of Analytics Adoption Report found that demand for analytics is expanding beyond what standalone analytics tools can provide. Eighty-four percent of business users say they want access to analytics within the applications they re already using. This comes as no surprise, since users are primed by their consumer experiences. As more users have relevant information at their fingertips to book flights, purchase consumer goods, and shop for houses, they bring similar expectations to their workplace and specifically to their applications. In the next seven years, of business users 90 % will interact with analytics at least once per day but only 15 percent will realize it. Anne Moxie, analyst for Nucleus Research Augmenting Intelligence with Embedded Analytics TWEET THIS 2 3 Increase user adoption and engagement Users are not just demanding embedded analytics, they are adopting it at higher rates than traditional standalone BI. The same survey found that users find traditional BI tools difficult to use. They don t like switching from their usual applications to log into a separate tool, and they don t have easy access to analytics tools within their workflows. That s one reason why embedded analytics sees such a high adoption rate 60 percent of end users who have access to embedded analytics actually leverage those tools on a regular basis. That s compared to a 21 percent adoption rate of standalone self-service analytics tools. What s more, 82 percent say time spent in the application increased after they added or improved their embedded analytics offerings. Charge more for a better user experience In the recent State of Embedded Analytics Report, more than 78 percent of ISVs with a paid commercial application say they charge more for their analytics offerings. And 98 percent say embedded analytics contributes to revenue growth. For companies that don t charge for analytics, it s often because their competition has a stronghold and they need analytics either to keep up or catch up. 3
6 Which Sophisticated Capabilities Will Carry Your Application Into the Future? Embedding dashboards and reports as deeply as possible is just the first step in differentiating your application with analytics. As you integrate everything, also consider the specific features and capabilities that make up your analytics offerings. Going from basic dashboards to sophisticated capabilities will help you win more discerning users now and into the future. These are the sophisticated analytics capabilities that can set your product apart and drive more revenue from customers both today and for years to come. Custom Styling Completely white-labeled inline analytics not only look and feel like the rest of your application, they provide unique interactions for each user based on their roles and rights. Integrated Workflow By integrating analytics in the host application s workflow, users can share findings with colleagues and click a button to kick off a process directly within the application. Write-Back Capabilities With write-back, end users are able to update information from within the analytics interface. They can also update source systems in the same context as their analytics since application components all work together. 4
7 Embedded Self-Service Empowering users to ask new questions and explore the data for the answers without help from your technology team can make your application stickier and increase its overall value. Flexible Security Application teams have already invested plenty of time and effort building a scalable security model and setting up different levels of data access. Flexible security means engineers don t have to recreate or replicate authentication and authorization information in the application s analytics. In the competitive software world, customers are always ripe for churn. As product teams differentiate their applications by embedding more advanced capabilities with seamless UI, integrated workflow and write-back, in-app self-service capabilities, and advanced predictive and prescriptive analytic tools they re able to win over new customers and keep their current ones. In fact, 72 percent of application teams are planning to invest more in their embedded analytics capabilities within the next 12 months. 72 % of application teams are planning to invest more in their embedded analytics capabilities within the next 12 months. See more findings and trends in the new report: 2017 State of Embedded Analytics 5
8 Achieving Analytics Maturity: Build, Buy, or Both When it s time to enhance the analytics offerings in your application, you have three options: Build your own solution Buy a third party solution Combine efforts: Buy a platform and build unique IP on top of it Companies that want to drive value through their embedded analytics recognize that building on their own is unsustainable. Buying helps you embed deeper without the burden of all the heavy lifting. But the best method is a combined approach. Companies that rely on a combination of coding and third-party tools tend to embed the deepest, as shown in the State of Embedded Analytics Report. A full 64 percent of companies that combined build and buy embedded at Level 3 or 4. Comparatively, only 51 percent of companies that coded it all themselves reached Level 3 or higher, and only 34 percent of those that just bought a solution reached the same level. A combined approach gives companies the best of both worlds. By coding some elements themselves, they make the application their own and get exactly what they need. And by partnering with an embedded analytics platform that focuses on sophisticated capabilities, companies can get to market faster and more easily keep up with shifting requirements and new, modern trends in analytics. 6
9 Achieving Analytics Maturity: Build, Buy, or Both PRO PRO BUILD BUY COMBINED APPROACH Total control over functionality and customization Control over integration with your application Faster time to deployment (especially pertinent to commercial applications where time-to-market is crucial) Frees up resources so your development team can focus on the core application Faster time to deployment than building, although likely longer than buying a pure COTS Total control to customize components and ensure your embedded analytics have the same look and feel as the rest of your application PRO If analytics fit within your company s core competencies and if your internal skills can t easily be replicated elsewhere then consider building analytics Fewer resources needed since coding is minimal You focus on your core application while your vendor keeps up with the latest analytics trends, adds new features, and scales your solution for the future PRO Minimal ongoing administration overhead Partnering with an expert in embedded analytics gives you access to new, sophisticated capabilities that most COTS products simply don t offer CON Longer time to deployment Depending on the vendor, you may be limited to basic dashboards and reports with few options to add more advanced capabilities Requires a moderate amount of developer resources CON Building analytics is codeintensive, which means it requires more developer resources than other options Many COTS products have limited (or zero) customization options, meaning your embedded analytics may look like your vendor s brand, not yours Development time will depend on the ease to develop on your chosen third-party platform (for faster TTM, look for a rich set of out-of-the-box capabilities, robust library, data source connectors, etc.) CON Higher total cost of ownership: platform, ongoing maintenance, research and development, and so on Higher potential for integration issues 7
10 Future Trends: What s the Next Differentiator? We ve covered the benefits of deep embedding and sophisticated capabilities. But organizations that want to differentiate their applications for years to come need to be focused on the future. So what s the next differentiator? These 4 predictions should get you thinking long-term 1 Infused analytics will be the standard. Consider the Analytics Maturity Model we outlined earlier. As the capabilities at Levels 0, 1, and even 2 continue to fade into the background, Level 3 (Infused Analytics) will start to be the base level at which every application starts. Consider what capabilities should be on your roadmap now to keep you competitive in the future More users will demand embedded self-service analytics. Without self-service capabilities at their fingertips, users will send ad hoc requests to application teams to get the data they want which leads to an unnecessary expense of developer time and resources to keep up with demands. More non-technical users are showing a preference for visualizing data on their own and creating outputs by themselves. This means embedding self-service capabilities (Level 4 on the Analytics Maturity Model) as soon as possible will be key to both staying competitive and reducing the burden on your IT team. The outer bounds of analytics will keep stretching. Beyond descriptive analytics ( what is ) and diagnostic analytics ( why it is so ), more application providers are looking into predictive ( what will be ) and prescriptive ( what you should do about it ) analytics. Wide adoption of prescriptive analytics is still much further out, but it s worth tracking now to plan for the future. Advanced analytics are on the horizon. Advanced analytics has been the next hot thing for a while now, but it s still primarily the domain of analysts who mine data, create models, and test their hypotheses. Over the next five years, we expect these capabilities to become widely available to all users as a component of embedded analytics platforms. Get a Step-by-Step Blueprint to Enhancing Your Embedded Analytics Offerings. 8
11 Conclusion The bottom line? Embedding modern analytics means long-term revenue. Weaving analytics into the fabric of your application and maturing the features you re offering makes your application stickier and leads to better adoption ultimately translating into higher sales and renewals. The key is to plan now. Companies that wait to enhance their embedded analytics may end up scrambling to improve their offerings after they lose key customers to the competition. By going beyond canned visualizations and dashboards, you can uniquely position your application in the market and base your offerings on new analytics capabilities that empower users to do their jobs better, smarter, and faster. Take the Next Step: Download the BI Evaluation Guide for Embedding Analytics in Your Software About Logi Analytics Logi empowers companies to embed analytics into the fabric of their organizations and products enabling anyone to analyze data, share insights, and make informed decisions. With Logi, product teams create analytic applications that are purpose-built to users unique roles and skills and infused within existing workflows and security models. More than 1,800 customers worldwide rely on Logi Analytics. The company is headquartered in McLean, Virginia. Learn more at LogiAnalytics.com and join the 9
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