Software companies must continually innovate, adding functionality, features and value, lest more nimble competitors overtake them. One critical competitive vector has become the extent to which software companies embed analytics into applications.

The latest State of Embedded Analytics Report (Logi Analytics) shows that software companies credit embedded analytics with dramatic improvements in win rates and reductions in customer turnover. 71% of respondents attribute increased revenue to embedded analytics features, and 62% report that adding embedded analytics to applications has improved their ability to differentiate themselves against the competition. That differentiation is apparent in the bottom-line sales: 68% of responding software companies charge more for their products specifically because they have invested in embedded analytics.

Companies have traditionally used business intelligence (BI) tools to inform strategic and operational decisions, pulling and sometimes correlating insights from multiple data sources. But sometimes BI has occupied a silo of its own. At best, this has meant that users must set aside time to pull reports from increasingly monolithic BI platforms. At some companies, entire departments have grown around BI software, contributing to the disconnect between the need for information and its provision.

For example, a salesperson wants to know which factors help close deals and which are a waste of time. Under the traditional model, they set aside the business application through which they generate sales and query the BI platform. They export the results of their BI queries and spend some time reworking them into a format they can easily consult when they’re able to return to their business application. Armed with some combination of PDFs and spreadsheets, and wishing their laptops supported four monitors, they’re finally able to bring BI to bear on the business of generating sales.

A generation ago, this scenario represented the cutting edge, but that’s no longer the case. Today’s most forward-thinking companies expect employees to make data-driven decisions and to produce quantifiable results. Toward that end, companies across all industries now rely on tools that embed BI directly within commonly used applications for improved employee efficiency.

The ability to visualize pertinent real-time data allows personnel in logistics, finance, sales and management to make better-informed, more profitable decisions more quickly and confidently than ever. Embedded analytics also allows more granular analytics at the functional level than traditional horizontal BI tools.

Some companies begin with tepid efforts toward embedding analytics that barely seem worthy of the term. Analytics can be embedded in three ways, not all of them terribly effectively:

  1. Separate reporting applications are embedded only to the extent that they’re able to share screen space—often uncomfortably—with business applications. Although they are simpler to use than full BI platforms, reporting applications fail to resolve the drawbacks of traditional BI silos.
  2. IFrames (inline Frames) are a slightly more advanced way to integrate data visualization tools into web-based business applications. IFrames are generated by discrete code unrelated to the web pages in which they appear; this renders them largely static and incapable of adjustment. Worse still, the means by which their code is added to their host pages can create security risks.
  3. Integrating analytics at the code level allows users to generate BI insights specific to emerging needs, and to apply those insights directly to strategic decisions. This approach conveys BI’s benefits while addressing the limitations of traditional BI silos.

Full code-level integration represents the future for businesses in nearly every industry and is quickly becoming a standard by which potential customers are judging software companies.

For successful software companies, embedded analytics are no longer an exotic added feature. As companies of all kinds increasingly rely on business applications to manage and inform day-to-day tasks, the value of embedded analytics will only grow. Successful software companies understand the dangers of feature creep, and tend to focus on supporting tightly related business functions with each application. Embedded analytics address questions generated across applications—those relating sales and inventory, for example—and present answers in ways that employees working in different roles can act on immediately.

Software companies that fail to meet these expectations are opening the door to their competition.