Take a Balanced Approach to BI Budget Allocations to Deliver Strong Results and Achieve Long-Term BI Success

Only a minority of organizations (less than 5 percent) allocate 51 percent or more of their business intelligence (BI) budgets to categories other than internal headcount and subscriptions for user BI software. In general, this diversity and balance in the distribution of planned BI spending reflects that, overall, organizations realize a planned, balanced, systematic / programmatic, and longer-term approach to implementation and use leads to success and value from BI. In other words, BI is not something an organization can simply buy, turn on, and start seeing instant results and returns.

Uneven or inconsistent BI spending ultimately could misalign a BI program in such a way that significantly and negatively impacts the organization (for example, fewer services provided, less analytic data availability, or slower and less-informed business decision making). To ensure the ongoing health and well-being of a BI program, a data leader needs to identify and then track minimum investments required, and then ensure BI spending exceeds these levels in all categories.

In 2023, a majority of respondents (52 percent) report increasing BI budgets for 2024, with 16 percent of these organizations indicating this growth results from reallocation of budget from other initiatives (see the Research Insight “Taking an Enterprise View Can Optimize Analytics Spending and Increase BI Budgets”). Even with positive indications for 2024 BI spending, data leaders looking to ensure optimal performance from their data and analytics programs need to scrutinize their BI budget allocations.

Data leaders should first benchmark their BI budget allocations, and identify and modify spending that may not align well with this target. Those not already doing so should leverage Dresner Advisory Services’ data as benchmarks against which to compare BI budget allocations. Our data show that, in general, the distribution of spending in BI budgets does not show extreme areas of concentration. Data leaders that find pockets of high budget concentration should analyze in detail the reasons for this, and proceed if justified but be prepared to modify plans if a compelling business reason is lacking.

Organizations that report positive results from their BI programs—BI success, increasing budgets, more frequent and higher levels of data-driven decision making, higher rates of data literacy, and an easier time finding and leveraging analytical content—balance their BI spending across all categories. Although exceptions to this exist, for most organizations, the planned-spending data indicate that taking a more balanced approach to BI spending tends to deliver strong positive results and best positions BI programs for long-term success.

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