APPLICATIONS

Today, AMR Research released a report that found North American companies will spend $23.8B in 2007 on business intelligence (BI) and performance management (PM). The report, which buckets spending into software, hardware, labor (internal and external), and integration services for BI and PM, notes that spending is expected to increase by nearly 9% this year. AMR Research defines business intelligence and performance management (BI/PM) as a set of tools, applications, and processes that helps companies control and manage business and operational performance. It combines strategic goal-setting and alignment with planning, forecasting, modeling capabilities, analytics, and tactical reporting. "We are nowhere near the business intelligence and performance management saturation point," said John Hagerty, vice president and research fellow at AMR Research. "The vast majority of companies say they will expand their purchases this year. While BI tools are still the largest area of spending and could be considered the meat and potatoes of this space, analytics applications as well as dashboards and scorecards are growing at a healthy rate." The report looked at five main categories of performance management and business intelligence, which are listed below with expected spending in 2007:

• Business Intelligence ($6.6B): Tools that help gather information and provide analysis capabilities
• Dashboards and scorecards ($5.5B): Tools and/or applications that enable businesses to track key performance indicators and view how an organization is performing
• Analytics infrastructure ($4.3B): Infrastructure to store, organize, and prepare the system of record for enterprise reporting and analysis
• Planning, budgeting, and forecasting ($4.1B): Applications that provide a business with a high degree of flexibility to model and align resources, activities, and finances to meet strategic objectives
• Analytics applications ($3.4B): Applications that accurately gather, unify, coordinate, and analyze content-specific information

Though the overall spending plans are strong, 18% of companies report that a lack of resources to work on BI/PM is the primary challenge impacting expansion within their businesses. Even so, organizations report they plan to spend less on external services this year, offsetting scarce consulting resources with significantly higher internal headcount spending. For more information about AMR Research's business intelligence and performance management market report, please contact Kevin Reilly at kreilly@amrresearch.com.