Business owners, tech executives and big business executives are spending significantly more on the analytics and analytics services they need to stay ahead of the competition, according to a new report.
Businesses have spent $11.4bn on analytics services, up nearly five per cent from $9.7bn in 2016, according a report by the McKinsey Global Institute.
It said the surge was largely driven by the rapid growth of analytics-focused businesses, as well as the emergence of companies using analytics in the big data economy.
The McKinsey report, titled Business Analytics: The Future of Information, Analytics, and Analytics, said the rise in data analytics services was largely the result of a number of factors, including the growth of cloud computing, which is used to store huge amounts of data, and increased use of artificial intelligence in big data applications.
“As data becomes a dominant source of information, it is becoming increasingly difficult for large organizations to meet the data analytics needs of their clients,” McKinsey said in the report.
“The shift towards analytics has brought about new challenges for large companies and has added pressure on those businesses who still rely on traditional approaches to information management.”
The McKinseys report also noted that a number the data companies were able to track had been acquired.
“There are some interesting trends emerging,” the report said.
“For example, many big data companies now rely on analytics tools to manage and analyse data in order to generate insights into the performance of their services and to improve their business.”
The report said that while data analytics is still the most used analytics technology, other types of analytics have emerged, including machine learning and predictive analytics.
“This means that the amount of time and money that businesses spend on analytics will likely continue to grow over the next several years,” the McKinseys said.
McKinsey is a global think tank that is based in New York.