Business intelligence cost concerns shouldn’t stop midsize companies

Read about business intelligence cost myths for midsize companies and learn about the advantages that midsize businesses can get from in-memory analytics and other BI technologies.

In this excerpt from the book The Shortcut Guide to Achieving Business Intelligence in Midsize Companies, written by Don Jones, readers will learn why the business intelligence cost equation is actually quite affordable for many midsize companies and find out how to keep the price of business intelligence software in their ballpark. Readers will also learn about the unique advantages that BI technologies can provide to midsize companies,...

including the use of in-memory analytics, advanced reporting and BI tools deployed on mobile devices.


Table of Contents:

* Looking at the benefits of business intelligence for midsize companies
* Myth: Midsize companies need specialized business intelligence skills
* Business intelligence cost concerns shouldn’t stop midsize companies


Myth 3: BI Is Expensive
 

When I’ve worked with big companies, there was no question that BI was a pricey proposition. But isn’t everything in a big company expensive? That’s part of the deal of being “big.” But you can’t use big-company pricing to draw accurate conclusions about BI costs for midsize companies. Your midsize company didn’t spend as much on, say, a CRM solution as a gigantic enterprise—why would BI be any different?

Expensive Acquisition Costs
There are two main costs associated with a BI implementation, and one of them is obviously the cost of the BI software. That is what it is, but a midsize company shouldn’t expect to pay anything like what a huge enterprise would invest. The vendors that produce these solutions aren’t stupid; they know perfectly well that they need to offer different price points for different-sized businesses.

Many of these vendors do so by offering different packages or “editions” of their solutions and toolsets. Just as Microsoft offers an “Ultimate” edition of their Office productivity suite, they assume only power users would purchase that edition. Other editions—“Home & Student,” “Professional,” and so forth—all provide different price points, and functionality packages, for users with different needs. Today, BI solutions aren’t really that different: Your midsize company can get the functionality you need in an “edition” that’s much less expensive than what a big enterprise would need and be willing to pay for.

Expensive Consulting Services
The other main cost associated with a BI implementation is the hordes of consultants who will spend months and months researching, planning, implementing, and training before your BI solution is officially online—in a big company, at least; as I’ve already discussed. Midsize companies can benefit from prepackaged solutions that require little or no consulting services. Sure, you’ll probably spend some time speaking with a salesperson and a technical expert, selecting the right feature set for your needs, and making sure that the solution you eventually purchase will do what you expect it to. But in many cases, these prepackaged solutions are prepackaged in every sense of the word: You don’t need to have a bunch of outsiders come in and install it for you.

Notice I said need. You certainly can have consultants handle your BI implementation, and there are some valid business reasons for doing so, such as an IT staff that simply doesn’t have time for the project regardless of whether they have the right skills. But with BI solutions targeted specifically at the midsize market, you’ll find that even the consulting expenses—should you choose to use consultants for your implementation—are much lower than what a big company would expect to pay. You’re looking at weeks of implementation, not months; you’re dealing with a BI solution that’s intended to be installed using fewer specialized skills (meaning less-expensive consultants), in less time, and with less effort.

Don’t Like Negotiating with Vendors?
There’s another thing I find about midsize companies who are exploring BI options: They hate dickering with salespeople. There’s this feeling, nowadays, that every business software purchase is going to be like buying a car. You have to haggle over the basic license pricing, then haggle over the maintenance fees. The salesperson is trying to figure out exactly how much he can squeeze before you kick him out of the conference room, while you’re trying to figure out how low you can drive the price before the salesperson gives up and walks away.

Some businesspeople love negotiating, and there will always be salespeople willing to do so. But some BI vendors—especially those targeting the midsize market—realize that a lot of midsize businesspeople don’t have the time or inclination for protracted negotiations. They’re buying a prepackaged solution, after all; why can’t they pay a prepackaged price?

You’ll find that many BI vendors—again, especially those targeting the midsize market—provide simple, fixed pricing on their midsize business BI solutions. You’re just buying a piece of software, not a piece of real estate, so they try to make things easy as well as affordable.

Unique Advantages of Midsize Business BI
There are a few things that midsize companies can typically do with BI that is actually a distinct advantage, giving midsize companies a real benefit that is more difficult for larger companies to achieve.

In-Memory Analytics
One example is in-memory analysis. As I described in the previous chapter, it’s a growing trend to use in-memory analytics because they’re fast, can often access more up-to-date (or even real-time) data more readily, and ultimately because they provide faster answers to questions. They allow more rapid exploration of “what if” scenarios because you don’t have to wait for reports or other output to be generated.

Big companies can certainly use in-memory analytics, but it can often be expensive for them (remember, everything a big company does seems to be expensive). Because their business models deal with so much data, they need a lot of computing power—especially memory—to make in-memory analytics possible. Some big companies choose to live without it, while others make the investment. Midsize companies often deal with a smaller volume of data, meaning in-memory analytics is more immediately approachable. Computer hardware costs the same no matter how big your company is, and a midsize company will often need much less of it to enable in-memory analytics—a distinct advantage given the benefit in-memory analytics can have on business decisions.

Consistency
Big companies are…well, they’re big. They have lots of divisions with different needs, and that can make BI difficult. People wind up looking at different, customized reports, and drawing different conclusions from what they see. Another advantage of midsize companies is that everyone tends to be a little closer to the actual line of business, so everyone tends to be a little more consistent in their needs. Prepackaged BI solutions capitalize on this by making consistent BI output available across the business, in the form of reports, dashboards, and so forth. By getting everyone literally on the same page—something a midsize company can have an easier time doing—you can make more consistent business decisions and get everyone moving in the same direction more easily.

What’s Good for Big Business Is Kind of Good for You Too
Hopefully, I’ve convinced you that BI isn’t just for big businesses, and that many of the common perceptions about BI are in fact misperceptions. BI doesn’t have to be expensive, doesn’t have to involve an army of consultants, and doesn’t require your business to slam on the brakes and disrupt itself.

But in using terms like “prepackaged,” I may have given you the impression that midsize business BI offerings are somehow less capable or flexible, and I need to address that. Although BI solutions targeted at midsize companies often do include a subset of the features found in a “big company” BI solution, that’s typically because many of the “big company” BI features are specific to a major enterprise environment and those features often do require the specialized skills and training midsize businesses are less likely to have or want to acquire.

That does not mean that prepackaged, midsize business BI solutions are inflexible, “one size fits all” programs that will force you to change the way you do business in order to “fit” the solution’s preconceived model. Modern software is, fortunately, much more flexible than that.

Business Model Flexibility
Every BI vendor knows that they can’t force you to remodel your business to fit the vendor’s notions of how your business works. If they tried, you’d simply never by their product, and they’d fail. The value of BI can only be realized when the BI solution maps itself to your business model, not the other way around; that’s why large businesses typically have customized BI solutions built for them.

It’s the similarity of midsize businesses that make prepackaged BI solutions feasible; nobody expects midsize businesses to be identical. BI solutions targeted at the midsize market can be incredibly flexible, and exploring a solution’s ability to map to your business model is one of the first things you should do when evaluating solutions for your business.

Advanced Reporting
“Midsize” doesn’t mean “dumbed down.” Midsize business BI solutions typically include powerful, customizable reporting capabilities. A difference, however, is that these capabilities are typically exposed in a much friendlier, more intuitive way. BI data is often stored using a common metadata model that uses standard business terminology rather than tech-geek-speak, making the BI system more understandable to business users. Midsize BI solutions typically include lots of built-in reports for the most common business needs, and these reports can serve as the basis for additional, customized reports that are shared—through a central repository—across the entire business. As users gain experience, they can usually begin writing their own custom reports, again sharing these through the BI solution with the other users in the company.

Data-Everywhere Accessibility
 

Big businesses were among the first to invest heavily in mobile workforce technologies, and that investment—like all the others big businesses have made in IT over the decades—pays off for midsize companies. Having created “data everywhere” capabilities for their big-company BI solutions, BI vendors moved quickly to bring the functionality to their midsize business offerings as well.

And any business can certainly benefit from “data everywhere.” The popularity of mobile devices such as Blackberries and iPhones proves that business people love to be connected to their businesses all the time—and being connected to your BI solution is no different. Midsize business BI solutions can provide robust mobile support, including the ability to access reports, dashboards, and scorecards from mobile Web browsers, dedicated mobile applications, and even through mobile email (see Figure 3.4).

Figure 3.4: BI solution being used from a mobile device.

Mobile devices aren’t the only part of “data everywhere” that you should look for in a BI solution. Simply being able to access reports, dashboards, and analysis tools from a home office, from a hotel room while traveling, or in the conference room of a business partner are all valuable usage scenarios. Most midsize business IT solutions accommodate these scenarios by standardizing on powerful, modern Web-based interfaces for much of their reporting and analysis functionality. Figure 3.5 shows an example of a Web-based analysis/reporting interface—something that users could access using any Web browser from any computer in the world.

Figure 3.5: Web-based interfaces are accessible from anywhere.

Coming Up Next…
The next and final chapter in this book will outline a roadmap for successfully adding BI to a midsize company. Now that you’ve learned what BI is, how it works, and what isn’t true about it, you’re ready to see how to bring it into your company. I’ll start by reviewing some of the main challenges presented by BI, and some ways in which you can address those challenges in a uniquely midsize company fashion. I’ll look at ways to bring BI into the company without turning it into a giant, never-ending implementation—and without breaking the bank. I’ll show you how BI can be made to work within the scope of your current IT resources, without needing expensive consultants camped out for the next 18 months. Finally, I’ll look at how to do BI in a way that complements, rather than disrupts, your business environment. I’ll wrap up this book by explaining a few of the things that big businesses deal with when it comes to BI and how some of those things aren’t good for midsize companies; I’ll then show you how to avoid them.


More on the benefits of business intelligence for midsize companies:

 

This was first published in May 2010

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