State and local government market analysis: Business intelligence/analytics solutions

Published: June 21, 2013

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Governments are increasingly looking at how data can assist in policy and decision-making to improve operations. This increase in demand for business intelligence (BI)/analytics solutions stems from the emergence of big data (large data sets) in government.
Once massive amounts of raw data are collected, they need to be made useful by being entered into BI/analytics tools to create digestible reports. The benefits and ability to pinpoint trends, measure performance and forecast outcomes based on these data sets makes business intelligence software and analytics solutions a must have for any government entity. State and local procurements for such software have not only grown in volume, but in scope as well. These solutions are being used in Medicaid departments, local school districts, transportation agencies, police departments and even in the budget formulation process.
Since 2009, solicitations seeking BI/analytics solutions and/or components have been rising steadily in the state and local market, with an average year-over-year increase of 36.5 percent.
*Numbers are based on opportunities captured in Deltek’s GovWin IQ state and local database*
State agencies are the biggest buyers of BI/analytics solutions and services due in large part to their data hub/compiler roles. Local entities are often tasked with collecting and submitting raw data to relevant state-level agencies who then synthesize the data into digestible visuals and actionable statistics. According to Deltek’s GovWin IQ database, state agencies released 52 percent of all BI/analytics solicitations in 2012, with local governments at 32 percent, and K-12 and higher education institutions encompassing the remaining 16 percent.
*Numbers are based on opportunities captured in Deltek’s GovWin IQ state and local database*
Based on solicitations captured in the GovWin IQ database, state and local governments releasing the most BI/analytics solicitations over the past three years (2009-2012) resided in the following states:
·         California (49 solicitations)
·         Texas (37 solicitations)
·         Virginia (27 solicitations)
·         Colorado (26 solicitations) 
·         New York (24 solicitations)
·         Illinois (22 solicitations)
In 2012 alone, state and local governments seeking BI/analytics solutions resided in:
·         Massachusetts (12 solicitations)
·         Washington (11 solicitations)
·         Ohio (9 solicitations)
·         Colorado (9 solicitations)
·         Maryland (8 solicitations)
·         California (8 solicitations)
BI/analytics solicitations have mostly been sought by departments in the general government (27 percent), health care (17 percent), and social services (15 percent) verticals. Under the general government vertical, most solicitations are pursuing solutions to complement enterprise data warehouses in IT departments and enterprise resource planning (ERP) systems. Most solicitations under the health care and social services verticals focus on records of public service recipients within unemployment insurance (UI), Medicaid, and TANF programs.
Solicitations released from K-12 and higher education institutions are expected to increase in the coming years. As student and teacher data initiatives continue to grow, such as the federally directed Statewide Longitudinal Data System program, the demand for more robust BI/analytics solutions will also increase for local school districts, education departments, and higher education systems.
*Numbers are based on opportunities captured in Deltek’s GovWin IQ state and local database*
Analyst’s Take
The rise of big data technologies in the state and local market represents the need to identify cost savings and improve government effectiveness. Government agencies are using BI/analytics tools across all verticals to determine how to close budget gaps, consolidate resources, stop fraud, reallocate funds, and better manage public funds and essential resources (time and personnel).
As you can imagine, BI/analytics vendors who have had success in the private sector have jumped out as leaders in the government market as well. The top five most awarded vendors captured in the GovWin IQ database for BI/analytics contracts include Microsoft, IBM, Oracle, SAP and SAS. However, solicitations requiring BI/analytics services such as training, implementation, maintenance/support services, and advisory consulting services offer broader opportunities.
Though vendors such as Deloitte, Accenture, Maximus and Unisys occupy a chunk of major contracts, smaller or less prominent contracts are up for the taking. The GovWin IQ database includes a list of more than 200 small-to-medium vendors who have also been awarded BI/analytics related contracts in the state and local market.
For more on the current state of the business intelligence/data analytics contracting market, see Chris Dixon’s Industry Analysis Report “Business Intelligence Market 2013” (Subscription Required).
GovWin IQ subscribers can read further about these projects in the provided links. Non-subscribers can gain access with a GovWin IQ free trial