Business Analytics will Bridge the LOB-IT Divide and Drive Real Enterprise Transformation in 2011, says IDC

Singapore and Hong Kong – March 3, 2011 – Organizations are realizing that their success or failure depends on making optimal decisions at the right time. By increasing the collaboration between IT and line-of-business (LoB) departments, the process of effective decision making can be achieved. Since business analytics (BA) has shown that it can improve decision making and drive revenue growth, IDC expects BA to take center stage for Asia enterprises in 2011. In the enterprise applications (EA) space, IDC believes that growth in software-as-a-service (SaaS) will significantly outpace traditional software product delivery in the region. More insights are revealed in the report, “IDC Asia/Pacific (Excluding Japan) Enterprise Applications 2011 Top 10 Predictions” (Doc # AP2670103T).

"Today, more than ever, enterprises are required to fix the IT-LoB divide in order to adapt to new market conditions. As a result, IT will shift focus from managing data to helping LoB managers derive true business insights from data residing within the enterprise”, says Daniel Zoe Jiménez, Program Manager for Enterprise Applications and Information Management at IDC Asia/Pacific.

As Asia enterprises adapt to the era of information overload, they are becoming more and more pressured to improve time-to-market to better serve the ever-changing needs of the customer. As such, there is an increasing need to improve collaboration across all areas of the organization.

Jiménez adds, "Organizations are becoming more aware of the importance of understanding volatility –context-based data– in the process of decision making. In a time where everything and everyone are becoming data generators and customer needs change very rapidly, making decisions based on repeated business patterns does not always guarantee success. IDC believes that the need to gain deeper visibility into internal and external business processes will lead to accelerated demand for decision management platforms. These tools will help organizations manage the process of decision making, from the most trivial day-to-day decisions to the most strategic."

In the EA space, IDC observes that the industry is going through a major transformation. Game-changing models (e.g., the cloud, socialytic applications, smart pricing) are radically changing the marketplace. These models are increasingly being viewed by organizations as facilitators to help them compete more efficiently. The cloud model, for example, brings undeniable benefits as a new sourcing strategy for organizations.

Jiménez comments, “While some would argue that the cloud is just a new way of looking at the long-standing debate around whether to keep applications in-house or to outsource them to a third party, IDC believes that the accelerated growth of SaaS in the region will cannibalize traditional software revenues in the future."

The following are IDC’s top 10 Asia/Pacific Enterprise Applications predictions in 2011. These are drawn from the latest IDC research and internal brainstorming sessions amongst IDC's regional and country analysts. The list includes factors that we believe will have the biggest commercial impact on the EA and BA markets across APEJ in 2011.

1. Socialytic Applications Will Transform the Enterprise Application Market: Its Viral Spread Will Need to Be Controlled by a Corporate Information Guardian 

Although widespread adoption of enterprise social software is immature and many IT executives are still unsure of the ROI that these initiatives can generate for an organization, IDC believes that social business software is poised to experience rapid growth across Asia enterprises, moving from enterprise trial to implementation. Furthermore, IDC expects virtually all types of business applications (e.g ERP, CRM, SCM) to undergo a fundamental transformation in 2011through the incorporation of analytics and social media tools. This will dramatically increase enterprise-wide collaboration and help organizations better understand customer needs and predict future opportunities. In addition, with the uptake of socialytic applications, IDC expects organizations to start paying more attention to information leakages, as employees get into a Facebook-like state of mind within the enterprise.

2. Cloud Service Advisors Will Help Plug the Wikileaks Effect 

The Wikileaks incident showed us that even data that resides in the most perceived secured location, whether physical or virtual, is at risk of leaking. This is regardless of where that information is located, be it private cloud, hybrid cloud, public cloud or even on peoples' minds. While IDC believes that there is clear evidence that Asia enterprises are becoming more receptive to the idea of adopting SaaS as part of their sourcing strategy, there are several concerns related to security and data control that need to be overcome. In light of this, IDC expects cloud service advisors to flourish, as end users begin to focus more on cloud service contractual agreements and shop around for solutions that best meet their requirements.

3. The Data Warehouse Appliance Will Come of Age as an Alternative Delivery Model 

In 2010, the market witnessed an uptake of the data warehouse appliance as an alternative delivery model due to the immediate benefits that it brings, including lower cost of ownership, higher performance and simplicity. The combination of hardware and preconfigured software bundled together has already proven successful in the region with Oracle's Exadata gaining traction and Netezza, which was acquired by IBM, targeting departmental workloads. In addition to this, acquisitions such as Microsoft-DATAllegro, EMC-Greenplum and recent product launches such as SAP's in-memory appliance, HANA, show increased vendor interest in this space to address customer demand for appliance-based data warehouse solutions. While IDC expects data warehouse appliances to cannibalize high-margin services revenue, we don't foresee that it will significantly hinder the advancement of this model in the region.

4. New Decision–Making Platforms Will Emerge, Building the Bridge Between Business Process Management (BPM) and Analytics 

In the era of information overload, deciding what is critical, relevant or irrelevant is a difficult task. But, making decisions based on large amounts of data from multiple sources is even harder. As a result, organizations in the region are becoming more aware of the importance of the actual process of making decisions, or decision management. In line with this, IDC expects that a newer wave of platforms that combine the benefits of both analytics and BPM tools will emerge. These platforms will help Asia organizations achieve improved operational responsiveness, and thus, moving the process of decision making from the "art of deciding" to the science of decision making.

5. Community Clouds Will Form, Bringing Significant Benefits to SMBs in the Region 

The shared services model is commonly used by organizations looking to achieve economies of scale and greater flexibility by joining together in cooperative type environments. IDC believes that as Asia enterprises explore cloud services and decide whether to use a private, hybrid or public cloud for their requirements, a shared services model extended to the cloud, or community cloud, will resonate particularly well among SMBs.

6. Mobilution: 2011 Will Set the Scene for True Enterprise Application Mobility 

Although enterprise mobility has been in the CIO's mind for a long time, most enterprises have only explored the possibilities of mobility in the areas of voice, messaging and email. Today, the need to improve customer service is driving the adoption of enterprise mobility across the industries. Furthermore, the combination of the cloud, media tablets like iPads, large-screen smartphones and new enterprise applications is creating a true enterprise application mobility revolution or Mobilution. While IDC predicts that 2011 will be a catalyst year for true enterprise mobility, we also expect CIOs and IT managers to revise their Information and Communication Technology (ICT) policies, in particular, governance, risk management, and compliance (GRC) at the same time.

7. Emerging Asia Enterprises Will Drive Pervasive Business Intelligence (BI) 

Today, there is a flood of information from multiple sources such as transactional systems, emails, sensors, and social networks. Indeed, these provide superbly rich mines to be tapped, analyzed, and utilized for quicker and better decision making. The emerging Asian Enterprise(1) is well aware of the information assets it has and is turning to BA to help gain critical insights from them to enable it to compete more effectively. In light of this, IDC believes that the emerging Asian Enterprise will drive usage of BI or BA in order to enable faster decision making and achieve faster growth.

8. Intercloud and Cloud-To-Ground Integration Offerings Will Help Drive Mainstream Cloud Adoption 

The emergence of the cloud has introduced multiple usage and delivery models to organizations, providing greater flexibility. Organizations have clearly understood that not one delivery model meets all requirements; hence, there is a need for a hybrid approach with the “best of various worlds” working seamlessly. As the complexity of an organization’s IT environment increases, IDC expects middleware solutions to become increasingly important –due to their orchestration and provisioning capabilities– for organizations as they strive to achieve data interoperability with enterprise wide systems integration (SI) in 2011.

9. The Need to Gain Faster ROI Will Drive Vertical-Specific Frameworks Adoption 

Traditionally, organizations will build their IT systems by department and function, resulting into data silos. Continuous dilemmas around IT purchasing decisions, such as buy versus build, best-of-breed approaches and the lack of a unique purchasing strategy have led to the heterogeneity of IT systems. IDC believes that industry-specific frameworks, combining preconfigured software and services, will resonate well with larger enterprises looking to achieve faster and leaner enterprise transformation.

10. Platform as a Service Will Help Simplify the "Application Spaghetti" 

The need or preference for custom-made applications as opposed to acquiring package software is common among certain organizations and markets across the region, particularly in North Asia (e.g. Japan and South Korea). Today, companies across the region are realizing that a flexible platform to build, deploy and integrate applications across multiple departments will have a significant impact on their "competitiveness". As a result, IDC expects that in order to gain market share in an increasingly competitive Asia market, the PaaS (Platform-as-a-Service) model will become a significantly more attractive option as opposed to the traditional on-premise license software.

For more information about purchasing this report, "IDC Asia/Pacific (Excluding Japan) Enterprise Applications 2011 Top 10 Predictions: The AA Power of Analytics and Socialytics Applications Accelerates the Charge Toward ROI-Led Transformation" (Doc # AP2670103T), please contact Sheryl Fuertez at +65-6829-7758 or sfuertez @idc.com. For press enquiries, please contact Lay Fang Tan at +65-6829-7731 or lftan@idc.com.

(1) IDC terms an emerging Asian enterprise customer as an entity that is headquartered in Asia, is hungry for growth and geographical expansion, agile and recognizes the importance of increasing time to market with the aggressive use of disruptive technology models.

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