September 9, 2023 | Jan Witte, Associate Intern, BGV
The age of Artificial Intelligence (AI) is upon us, and its impact is reverberating across various sectors. A staggering metric from McKinsey suggests that in the next decade, AI will be responsible for the emergence of $5.8 trillion in GDP, particularly disrupting the Analytics market. But the question that looms large is: How will Generative AI specifically reshape the Business Intelligence (BI) landscape?
The Current Limitations of BI Tools
Business Intelligence tools, as they stand today, seem outdated. They are not equipped to handle the rapid pace of the AI landscape. Here’s why:
- Speed: The value of data diminishes quickly. According to a survey conducted by business intelligence firm IDC, 75% of business professionals believe most data will lose its values within days, if not hours, of collections. For data to be useful, it needs to be swiftly transformed from raw data to information and then to actionable knowledge. Many organizations struggle in these areas, as studies have shown. The inability to use analytics across all employee levels delays the deployment of analytics or reporting dashboards – time that companies can ill afford to lose.
- Accessibility: The scope of data has expanded. It now spans across entire organizations and needs to be accessible to all employees, not just a select few. This shift towards data democratization means that customers also expect to harness the power of data. They want to download and track performance data to measure their success.
- Editability: Modern BI tools need to cater to a wider audience, including those without technical expertise. Low-code/no-code solutions are essential so that even low-level employees can edit, provide feedback, and update the data stack. Gone are the days when specialized teams were the sole gatekeepers of data.
- Smart Recommendations: Access to data is just the beginning. To truly compete, businesses need their BI tools to provide logical next steps based on the data. In essence, these tools should function as recommendation engines.
A Journey Through Three Generations of BI Tools
The BI landscape has seen a significant evolution, marked by three distinct generations:
- 1st Generation: Traditional BI focused primarily on reporting.
- 2nd Generation: The era of Self-service BI brought with it a multitude of attributes to measure.
- 3rd Generation: AI-enabled BI, also known as Augmented Analytics, came into play.
Over time, the focus shifted from merely describing events (what happened) to diagnosing causes (why did it happen), predicting future events (what will happen), and finally, offering solutions (what actions should be taken).
Generative AI Heralds A New Generation of BI Tools
As the Business Intelligence landscape undergoes a seismic shift with the advent of Generative AI, certain characteristics will set the winners apart from the rest:
- Speed and Accessibility: In the fast-paced world of AI, speed is of the essence. Organizations, and the employees within those organizations – no matter the department – will no longer be bogged down by cumbersome processes, or require development resources or engineers to access specific data in formats they can digest; instead, they’ll have swift and efficient tools at their fingertips, easily accessible with the speed and urgency they need.
- Editability and UI/UX: The leading BI tools powered by Generative AI will not only be faster but will also prioritize no-code and low-code solutions. This ease of use, combined with seamless integration capabilities with existing workflows and tech stacks, will be the most significant differentiator. The user interface and experience (UI/UX) will play a pivotal role in the success of these tools. But it’s not just about aesthetics or user-friendliness. The winners in this space will offer platforms where even those without technical expertise can easily edit and customize their data views. This combination of editability and top-notch UI/UX will ensure that a broader range of users can harness the power of Generative AI without feeling overwhelmed.
- Smart Recommendations with Conversational Interfaces: The future of BI is not just about presenting data; it’s about making that data actionable. The leading tools will incorporate conversational interfaces, allowing users to interact with their data in intuitive ways. For instance, a sales manager might engage in a dialogue with a bot, asking it to highlight the most crucial KPIs for their sales team. But it won’t stop there. These advanced interfaces will also provide actionable recommendations, such as strategies for improvement in the upcoming quarter. This blend of smart, prescriptive, and actionable insights will revolutionize how businesses approach decision-making.
Let’s look at some concrete examples:
- Microsoft Copilot: This tool exemplifies the future of BI, as it is no-code/low-code, editable, and embedded. As you draft documents, you can engage the bot directly, asking it for supporting data, new ideas, or to pull specific information from other files in your Microsoft Office suite. The seamless integration showcases the potential of such tools.
- Conversational Bots: Imagine a sales manager conversing with a bot to pull crucial KPIs on their sales team, seeking actionable recommendations for the upcoming quarter. This is the future of smart and prescriptive recommendations.
With these characteristics in mind, it’s clear that the future of Business Intelligence, powered by Generative AI, will be both transformational and user-centric.
Enterprise 4.0 and The Primacy of Data
At BGV, we’ve championed an investment thesis focused on Enterprise 4.0 technology innovation, meaning a new wave of B2B startups that combine AI, intelligent automation and proprietary data to deliver actionable insights for enterprise businesses. Nowhere is this case made clearer than with Generative AI powered business automation and embedded analytics tools.
Generative AI has ushered in a transformative era for business intelligence by amplifying the importance of previously untapped and specialized data sets. Historically, analyzing niche and specialized datasets imposed prohibitive costs and were a significant challenge for organizations, limiting their ability to glean insights from myriad sources. However, with the advent of generative AI, businesses now possess powerful tools that can effectively process and interpret even the most specialized or once mundane datasets, allowing for the extraction of unique and valuable insights that are often hyper-tailored for industry-specific use cases.
As a result, this new era favors companies who are domain experts in a given vertical, or have unique access to hyper-niche datasets. Whether it’s deciphering intricate market dynamics, understanding consumer behaviors in niche industries, or unraveling the mysteries of esoteric trends, generative AI empowers these organizations to glean invaluable insights from their data that were once deemed too daunting to explore. This newfound capability to extract immediate value from data not only broadens the horizons of business intelligence but also empowers enterprises to make data-driven decisions that are finely tuned to the nuances of their specific domains, setting the stage for innovation and competitiveness in today’s dynamic business environment.
Generative AI represents a pivotal shift in the BI landscape, addressing the challenges of speed, accessibility, editability, and smart recommendations. The democratization of data will be instrumental in driving data-driven decision-making throughout organizations and enterprises. While established tech giants may lead the charge, niche players with vertical integration may well carve out their own spaces where they boast distinct advantages, typically in terms of more intimate understanding of embedded workflows and/or proprietary access to data. As the industry evolves, we can expect increased integrations, partnerships, and innovative solutions to emerge on the horizon, all empowered by Generative AI, shaping an entirely new generation of BI tools with unparalleled potential for business success.
