Data leaders and their teams often struggle to deliver value due to limited budgets or allocations not fully aligned to business priorities and needs. Across industries, our data show that investment in business intelligence (BI) holds somewhat firm, and budget levels on average remain steady. However, degradation exists in some corners in 2024, with a slight increase in the number of organizations reporting reduced BI budgets and a small decrease in those with expanded BI budgets.
Historically, most BI budgets tilted heavily toward personnel costs, BI-related software, and infrastructure to support BI initiatives (such as database licenses, server capacity, and so forth). Allocations increasingly are shifting over time as infrastructure continues to commoditize and software licenses give way to cloud-based services.
BI budgets not spent in ways that optimally pay back against expected value increases the risk that data leaders and their teams may face cuts in their funding. In some cases, the budget overall is not well aligned to the needs of critical business outcomes, making it extremely difficult (if not impossible) for teams to justify maintaining or growing, let alone retaining, BI budgets.
Successful organizations are finding ways to stabilize and even grow their BI budgets. They most often achieve this by identifying gaps or weak points in their budget allocations, where the budget does not clearly support specific needs of critical BI initiatives.
An interesting and important trend is that a growing portion of BI investment goes toward externally facing use cases—where BI capabilities provide direct value to external parties, such as customers, partners, and suppliers. Successful data leaders are rebalancing their budget allocations to grow this highly impactful application area.
Regardless of the type of BI initiatives and the audience (internal, external, specific constituents, or business functions), engagement of business functional leaders remains critical. Without active engagement and buy-in from business leadership, no BI budget will be safe. Data leaders can best protect and grow their BI budgets by working closely with key business leaders to ensure budget allocations optimally support the business outcomes those leaders want to achieve.
By using insights about budget allocations and business initiatives from engaged business leaders, organizations can plan specific actions to reallocate or grow BI budgets. Through clear connection to business value in support of strategic business outcomes, data leaders and their teams can overcome the constant challenges and questions about the value they deliver through data and analytics. When organizations solidly justify their BI budgets in this manner, the chances of retaining and growing BI budgets increase dramatically.
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