Several weeks ago, in preparation for the Text Analytics Summit, I deployed a short survey about the state of text analytics. I supplemented the end-user survey with vendor interviews. Here are some of the end-user findings.
First, a few words about the survey itself and who responded to the survey.
- I wanted to make the survey short and sweet. I was interested in company’s plans for text analytics and whether the economy was affecting these plans.
- Let me say up front that given the topic of the survey and our list, I would categorize most of the respondents as fairly analytical and technology savvy. Approximately 50 companies responded to the survey – split evenly between those companies that were deploying the technology and those that were not (note that this is a self selecting sample and does not imply that 50% of companies are currently using text analytics). The respondents represent a good mix across a number of verticals including computing, telecommunications, education, pharmaceuticals, financial services, government, and CPG. There were also a few market researchers in the mix. Likewise, there was a mix of companies of various sizes.
- Here’s my caveat: I would not view the respondents as a scientific sample and I would view these results as qualitative. That said, many of the results paralleled results from previous surveys. So, while the results are unscientific, in terms of a random sample and size, I believe they probably do reflect what many companies are doing in this space.
Kinds of applications, implementation schemes
I asked those respondents that were deploying text analytics, what kinds of applications they were using it for. The results were not surprising. The top three responses: Voice of the Customer (VoC), Competitive Intelligence, and eDiscovery, were also in the top three the last time I asked the question. Additionally, many of the respondents were deploying more than one type of application (i.e. VoC and quality analysis). This was a pattern that also emerged in a study I did on text analytics back in 2007. Once a company gains value from one implementation, it then sees the wider value of the technology (and realizes that it has a vast amount of information that needs to be analyzed).
I asked those companies that were planning to deploy the technology, the top applications being considered. In this case, VoC and Competitive Intelligence were again in the top two. Brand Management and Product R&D were tied for third. This is not surprising. Companies are quite concerned with customer feedback and any issues that impact customer retention. Companies want to understand what competitors are up to and how their brand is being perceived in the market. Likewise, they are also trying to get smarter about how they develop products and services to be more cost effective and more market focused.
How Text Analytics is being deployed
I also wanted to find out how companies were deploying the technology. In particular, we’ve heard a lot this past year about organizations utilizing text analytics in a Software as a Service (SaaS) model. This model has become particularly attractive in the Voice of the Customer/Competitive Intelligence/Brand Management area for several reasons. For one thing, this kind of analysis might involve some sort of external information source such as news feeds and blog postings. Even product R&D would draw from external sources such as trade journals, news about competitive products, and patent files. Additionally, the SaaS model generally has a different price point that enterprise solutions.
In fact, SaaS was the model of choice for implementing the technology. The SasS model does offer the flexibility and price point that many companies are looking for, especially in some of the above-mentioned areas. However, that is not to say that companies are not deploying text analytics in other ways (note the values on the X axis). Interestingly, companies are starting to deploy text analytics in conjunction with their content management systems. I think we will see more of this as the technology continues to become more mainstream.
Just as an FYI, all of the companies that had deployed text analytics stated that the implementations either met or exceeded their expectations. And, close to 60% stated that text analytics had actually exceeded expectations.
What about those companies that aren’t deploying the technology?
Equally important to understanding the market are those companies that are not deploying text analytics. I asked those companies if they had any plans to utilize the technology. Eleven percent stated that plans had been put on hold due to funding constraints. Twenty-eight percent stated that they had no plans to implement the technology. Another 28% stated that they planned to implement the technology in the next year and 33% said they planned to implement it in the next few years.
Reasons cited for not implementing the technology included not understanding enough about text analytics to implement it. Other companies just never considered implementing it, or had other analytic projects on the radar.
What about the economy?
There have been numerous articles written about whether certain technologies are recession proof, with various BI related technology vendors stating/hoping/praying that their technology falls in to this category. And certainly, companies do feel the need to gain insight about operational efficiency, their customers, the market, and the competition with, perhaps a greater urgency than in the past. This has helped keep business analytics vendors moving forward in this economy.
The 11% number is relatively small. However, I wonder what part of the 61% that said that they would be deploying it in the future, might actually fall into the hold category. When I asked text analytics vendors (mostly private companies) whether the economy was impacting the sales cycle, they pretty much said the same thing. Existing customers were not dropping projects (there is too much value there, as supported by this survey). However, sales cycles are longer (companies are not necessarily rushing) and potential clients may be looking for creative financing and contracting options.
I am participating in an analyst panel at the Text Analytics Summit in June. I have more to say about the topic, as I am sure, do the other analysts who will be participating.
Filed under: BI innovation, Business Intelligence, Content Management, Text Analytics, text mining, Uncategorized Tagged: | Business Analytics, eDiscovery, recession, survey, Text Analytics, Voice of the Customer