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Are packaged business analytics tools right for your organization?

Packaged business analytics tools can help guide the process of aligning business and IT goals, but there are some drawbacks, according to analysts and technology professionals.

Technology professional Sri Vemparala believes that it’s important to choose analytics tools based on how well they support business needs. But he also understands that, oftentimes, the business doesn’t know exactly what it needs from analytic applications.

That’s why Vemparala, manager of reporting and business intelligence (BI) at Stanford University in Palo Alto, Calif., thinks that the emerging category of packaged business analytics tools could be a big help to some organizations. The packaged applications typically are pre-configured for different types of end users, sometimes in specific vertical industries. As a result, Vemparala explained, they can serve as an effective guide to analytics capabilities and potential uses for business professionals.

“Most times, business [users] don’t know what they want in the sense that you have to tell them what kind of data is available and all that stuff,” he said. “But when you demonstrate a pre-packaged application from a vendor, they can easily relate to it immediately.”

The number of bundled business analytics software packages available to users is growing, creating the potential for faster installations of analytics tools at organizations that can meet their needs with pre-configured applications.

The benefits and drawbacks of packaged business analytics tools
The packages, which provide sets of reports and analytic routines designed to be used out of the box, are usually less expensive and easier to deploy than the traditional “configure-it-yourself” versions of analytics software are, according to Vemparala and several IT industry analysts. However, they added that packaged analytics technologies do come with some drawbacks and that prospective customers need to take other considerations into account as well.

For starters, Vemparala said, packaged business analytics tools aren’t quite as easy to deploy as vendor marketing campaigns tend to suggest.

“Nothing works out of the box, as they say it does – every environment is different,” he noted. “We got some pre-packaged analytics for student data recently, but it took us a while to get [the software] up and running, definitely longer than what [the vendor] said.”

Getting pre-configured business analytics applications ready to use can require a great deal of effort on the back end, Vemparala said. For example, the software needs to be connected to an organization’s existing BI architecture via application programming interfaces. And some level of customization will always be necessary, he said.

In addition, Vemparala cautioned that before doing any customization work – or buying packaged applications in the first place – it’s important to know whether the changes would affect the software vendor’s technical support policy. “You need to do a thorough analysis of any [functionality] gaps and work with the vendors to understand what will happen to support if you decide to fill in the gaps,” he said.

Joshua Greenbaum, founder and principal of Berkeley, Calif.-based Enterprise Applications Consulting, said that packaged analytic applications can be a sensible choice, especially for organizations worried that they’re falling behind the competition in terms of analytics capabilities. Packaged software is also a good fit for small and midsized organizations that want to install a portfolio of analytics technologies without having to devote a lot of resources to the project, Greenbaum said.

Due diligence needed on packaged business analytics tools
But he added that BI and analytics teams need to do their due diligence to make sure that packaged business analytics tools will support internal BI needs and – in the case of industry-specific applications – that the software is based on current industry terminology and business models.

“It’s usually faster to acquire and implement pre-built analytics than it is to try and get into the queue at the IT department and have them build it for you,” Greenbaum said. “The flip side is that you can be seduced by the simplicity of the packaged solution, and it may really not be good enough for what you need. The business requirements need to drive the analytical solution.”

Many of the pre-configured analytics bundles being sold by vendors now are built around horizontal business processes – for example, sales, logistics and financial reporting. But Greenbaum thinks users increasingly will be able to get better insight – and business results – from packaged applications that are tailored to their particular verticals. “More and more, the real value in analytical apps is going to come from very specific analytics in your industry,” he said.

Software vendors have been pushing “BI for the masses,” or pervasive BI, for years – the idea being to make BI and analytics capabilities available to a wider group of business users within organizations. Because of their pre-configured nature, packaged analytic applications could help make pervasive BI more of a reality for companies.

But customers should avoid the temptation to over-buy, said George Goodall, a senior research analyst at Info-Tech Research Group in London, Ontario. For example, not everyone needs the ability to access multidimensional data cubes, Goodall said. He noted that potential analytics users fall into three general categories: managerial decision makers, business and data analysts, and “everybody else.”

“You need to deliver something for the managerial user, and you need to deliver something for the analysts, and those might be different tools depending on the requirements,” he said. For the rest of the organization, he recommended that purchases of analytic applications be based on the “bare minimum” requirements for analytics capabilities.

Packaged business analytics tools: More questions to consider
There are other questions to consider when weighing a possible purchase of packaged business analytics applications. Does your organization possess the skills to use the tools to their fullest? Is there a project management process in place to help you unleash the applications once you buy them? Is there sufficient data quality within the organization to deliver accurate answers to analytic queries?

“When we look at how some of these systems fail, it’s very rarely due to the underlying technology,” Goodall said. “The biggest issue I hear from people is the fact that [organizations] lack the capability and the IT maturity to effectively deploy these things.”

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