When Netflix recommends your next binge-worthy show or Amazon predicts your next purchase, you’re witnessing the power of data and AI in action. These brands have mastered the art of data-driven personalization, using sophisticated algorithms to analyze millions of data points. Their success speaks volumes. Companies that effectively leverage data see a 19% improvement in customer satisfaction and up to a 10% increase in revenue, according to McKinsey. It’s a competitive edge built on insights, efficiency, and agility.
IDC’s latest report projects data and analytics spending to soar at a 16% CAGR, reaching $340 billion by 2027. This rapid growth shows that AI and data analytics are essential for businesses aiming to thrive in today’s fast-paced environment.
In this blog, we’ll explore more findings of the IDC report and discuss how organizations can stay ahead by strategically adopting these technologies.
The Role of Data and Analytics in a Digital Business World
Key Predictions on Data and Analytics
1. Data Valuation Initiatives
By 2024, data valuation efforts are expected to become standard, helping companies assess ROI for data, AI, and analytics projects. However, inconsistent methodologies may hinder intercompany comparisons.
2. Generative AI in Data Engineering
By 2025, the adoption of Gen AI-driven data intelligence and integration software is expected to boost productivity for data engineers by at least 25%, automating tasks such as data pipeline development and annotation.
3. Geolocation and Business Analytics Integration:
By 2025, geolocation data combined with business analytics will be widely adopted by G2000 companies, adding a valuable layer of precision and personalization to AI-driven solutions. Although geographic information systems (GIS) were once limited to specialists, AI advancements and no-code/low-code interfaces have made geolocation data accessible to general data scientists and business analysts. By embedding geospatial intelligence into analytics, companies can connect insights with location data, strengthening decision-making capabilities with contextually relevant information.
Insights: Why Data-driven Decisions Are Essential
With data and analytics woven into the fabric of business strategy, companies must prioritize real-time, data-driven insights to stay agile and competitive. Here’s why:
The Necessity of Enhanced Decision Velocity
Today’s businesses can no longer rely on retrospective analysis alone; decision velocity—the speed and accuracy of decision-making—is now a competitive differentiator. To meet evolving customer expectations, organizations need real-time insights that allow them to tailor products and experiences precisely and personally. For example, personalized customer interactions, supported by AI-enhanced data analytics, improve user satisfaction and drive loyalty, as demonstrated by brands like Netflix and Amazon.
Demand Drivers: The Digital Business Imperative
IDC’s report highlights the “digital business imperative,” which prioritizes data integration in every part of a company’s strategy. Organizations that embrace data-driven operations can quickly adapt to market changes, optimize processes, and identify new growth opportunities. This data-centric approach not only strengthens market positioning but also propels digital innovation, making it possible to introduce value-added products and services that distinguish a company in its industry.
To stay competitive, businesses need more than just data—they need actionable insights delivered at the right time and place. As data becomes critical for strategic planning, companies that effectively use analytics will lead the market, while others may struggle to keep up.
Key Predictions on AI and Generative AI
AI-Driven Business Intelligence Expansion
By 2025, AI-powered, headless BI and analytics systems will be adopted by 66% of G2000 companies, expanding access to contextual data and enabling natural language-driven interactions that streamline decision-making across teams.
Cross-Functional Planning with AI
By 2026, Gen AI is expected to facilitate the alignment of internal planning models with external economic data, doubling the number of cross-functional enterprise planning initiatives and improving strategic alignment across departments.
Insights: How Gen AI is Revolutionizing Data Control and Business Agility
Generative AI has transformed data management by automating time-consuming, manual tasks and improving the accuracy and reliability of data processing. Here’s why this is crucial:
1. Enhanced Data Control and Reliability
Gen AI technologies can automate data quality checks, annotate large datasets, and streamline data pipeline management, ensuring that businesses work with consistent and reliable information. This reduces dependency on manual data handling, which can be error-prone and slow.
2. Agility Through Automation
With Gen AI-driven data control, businesses can automatically update, monitor, and adjust data pipelines based on evolving requirements. This agility enables faster response times to changing market dynamics and customer needs, ultimately creating a more responsive business environment.
3. Cost Savings and Efficiency Gains
By automating tasks traditionally handled by data engineers and other staff, Gen AI helps reduce operational costs. This, combined with its ability to process vast amounts of unstructured data, makes it indispensable for organizations looking to scale efficiently.
Increasing Demand for AI in Operational Efficiency
As companies face pressure to reduce costs and enhance customer experiences, the demand for AI and Generative AI has surged. Organizations now recognize that AI-driven solutions enable them to optimize workflows, boost productivity, and create highly personalized customer interactions.
The Growing Importance of Data Automation and Workflow Efficiency
Key Predictions on Data Automation and Workforce Adaptation
Increased Investment in Reskilling
By 2026, the rapid adoption of AI-powered analytics will double organizational spending on reskilling and change management as companies work to equip employees with the skills necessary to leverage advanced data technologies.
Demand for Cross-Functional Planning
By 2026, Generative AI will help companies coordinate internal planning efforts with external economic data, doubling the number of cross-functional enterprise planning initiatives, which require automation and streamlined data workflows for efficiency.
Insights: Why Automated Data Workflows Are Essential for Business Success
1. Keeping Pace with Innovation
As AI and analytics technologies evolve, manual data handling becomes less feasible. Automation enables companies to continuously process, analyze, and act on data insights without adding pressure on teams.
2. Balancing Efficiency with Workforce Development
Automated workflows reduce repetitive tasks, allowing employees to focus on strategic, creative work that adds real value. However, as technology changes quickly, workforce development is essential to ensure teams have the skills to operate and optimize these automated systems.
3. Scalability and Flexibility
Automation allows businesses to handle growing data demands with minimal bottlenecks. This is especially crucial for organizations looking to scale operations without being limited by resource constraints or data management inefficiencies.
Unstructured Data and the Need for Enhanced Data Management
Key Predictions on Unstructured Data Growth and Spending
Shift in Data Spending
By 2027, organizations will equalize their spending on structured and unstructured data processing, driven by the growing use of Generative AI for handling unstructured data. This marks a major shift as companies increasingly recognize the untapped potential of data in various forms, from text and images to audio and video.
Emergence of Advanced Data Technologies
The integration of vector and graph databases will enable organizations to store and analyze unstructured data efficiently, optimizing AI models and driving more precise analytics. As a result, more companies will invest in these specialized data management tools.
Vast Opportunities with Rich Data Sources
Unstructured data includes a wealth of information that, when analyzed effectively, can reveal deeper insights into customer behavior, market trends, and operational efficiencies. Companies that succeed in utilizing this data can unlock insights that structured data alone cannot provide.
Advanced Technology Requirements
To harness unstructured data, organizations require advanced tools like Generative AI, vector databases, and graph databases. These technologies allow companies to organize and analyze vast amounts of diverse data, helping to streamline decision-making processes and support complex use cases in sectors like healthcare, finance, and retail.
AI-Powered Insights for Competitive Advantage
Generative AI, in particular, enhances the ability to process and interpret unstructured data, offering organizations the capability to analyze previously inaccessible information and gain a strategic edge.
Other Key Predictions and Insights from the Report
1. Regulatory and Compliance Pressures on Data and AI
As AI and data solutions rapidly expand, regulatory frameworks are evolving to ensure ethical and secure usage. The IDC report highlights the importance of compliance in response to regulations like the EU’s AI Act and GDPR, which enforce data privacy, transparency, and ethical AI standards. These regulations compel businesses to adopt robust compliance frameworks that safeguard data and ensure that AI applications operate within defined ethical and legal boundaries. Organizations that proactively establish compliance measures will not only avoid legal pitfalls but also build trust with customers and stakeholders.
2. Extended Tenure of Chief Data Officers (CDOs)
The report predicts that the tenure of Chief Data Officers will double by 2028, reflecting an increased emphasis on long-term data strategy leadership within the C-suite. As data becomes a central asset for businesses, the role of the CDO is evolving from a support function to a strategic one, essential for navigating complex data landscapes and driving AI and analytics initiatives. Longer tenures will allow CDOs to implement and refine data strategies more effectively, fostering a culture of data-driven decision-making that aligns with the company’s long-term goals.
3. AI and Data Literacy as a Business Requirement
The IDC report underscores a critical need for businesses to enhance AI and data literacy across their workforce. As AI and data tools become more integrated into daily operations, bridging knowledge gaps is essential to maximize their effectiveness. By investing in reskilling programs and fostering a culture of continuous learning, companies can equip their employees to use these advanced tools effectively. A workforce with a strong grasp of AI and data can drive innovation and improve operational efficiency.
4. Knowledge Management and LLMs (Large Language Models)
By 2028, IDC anticipates that 75% of G2000 companies will use large language models (LLMs) to create firm-specific ontologies, which will play a vital role in enhancing knowledge management and AI model training. LLMs can be trained on private, organization-specific data to develop a deep understanding of company concepts, workflows, and processes.
This application not only aids in effective knowledge management but also supports decision intelligence by providing employees with immediate, accurate insights. By leveraging LLMs, organizations can improve internal information flow, reduce knowledge silos, and create a cohesive, informed workforce.
Stay Ahead with Kanerika’s Future-ready AI and Data Analytics and AI-driven Solutions
Organizations that fail to integrate key technologies like analytics, AI, and automation risk falling behind, as data insights now drive critical decisions, customer engagement, and operational efficiency. Embracing these solutions not only improves responsiveness but also equips companies with the agility needed to adapt to market shifts and regulatory changes.
Kanerika can support businesses in this transformation. As a Microsoft Solutions Partner for Data and AI, we bring expertise in deploying advanced, custom-built solutions for your needs. Our solutions span multiple sectors, including retail, manufacturing, banking, finance, and healthcare, leveraging the best of technology to ensure that our clients can access the full potential of data-driven insights.
Beyond our technical capabilities, we prioritize data security and regulatory compliance, holding ISO 27701 and 27001 certifications. This commitment to security assures clients that their data is managed responsibly, aligned with stringent privacy and compliance standards. With a comprehensive suite of services in data analytics, AI, and RPA, we provide businesses with a seamless path to digital transformation. Our approach ensures that companies can harness the power of data confidently and effectively, driving sustainable growth.
Frequently Asked Questions
How is AI used in data analytics?
AI empowers data analytics through automation of data cleaning, pattern detection, and predictive modeling. It excels at processing massive datasets, identifying complex correlations, and generating insights through machine learning algorithms. AI tools can automate repetitive analysis tasks, create visualizations, and uncover hidden patterns that might be missed by traditional methods.
Which is better, AI or data analytics?
AI and data analytics are complementary rather than competing approaches. AI is a tool within the broader field of data analytics. Traditional analytics provides the foundation and methodology, while AI enhances these capabilities with advanced processing and pattern recognition. They work best when used together.
What is the future of AI in data analytics?
The integration of AI in data analytics will deepen, with more sophisticated automated analysis, real-time processing, and advanced predictive capabilities. We'll see improved natural language interfaces, automated feature engineering, and more accessible AI tools. The focus will shift toward explainable AI and ethical considerations in automated decision-making.
Will AI replace data analysts?
No, AI will augment rather than replace data analysts. While AI can automate routine tasks and handle large-scale data processing, human analysts remain essential for strategic thinking, context understanding, problem definition, and interpreting results. The role will evolve to focus more on AI oversight and strategic decision-making.
Which AI tool is best for data analysis?
The best AI tool depends on specific needs and use cases. Popular options include Python libraries like scikit-learn and TensorFlow, R packages, specialized platforms like DataRobot and H2O.ai, and cloud services from major providers. The choice should consider factors like ease of use, scalability, and specific analytical requirements.
Can ChatGPT do data analysis?
While ChatGPT can assist with data analysis by suggesting code, explaining concepts, and helping interpret results, it's not a dedicated data analysis tool. It lacks direct data processing capabilities and can't perform actual computations. It's best used as a support tool alongside proper data analysis software and platforms.
