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Reduce the Total Cost of BI Ownership

Are you confronting higher-than-expected business intelligence expenditures? A new Aberdeen Group report reveals how best-in-class companies are controlling BI costs from deployment through ongoing system maintenance.
CAPABILITIES AND ENABLERS (continued)

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BIC Back-end Technology Enablement
Technology Management. Based on the difficulties with data integration discussed above, it's important to analyze the current use of back-end technologies from a Best-in-Class perspective. Research for this study explored the technologies involved in building BI solutions, from initial data collection, integration and cleansing, to metadata management, data model/cube building tools, as well as the services associated with implementation consulting and IT/technical staff training. The research reveals that in each case, Best-in-Class companies are more likely to have made an investment in these back-end tools and services. In fact, in the case of metadata management tools, Best-in-Class companies are more than two-and-a-half times as likely as Average performers to use this technology. Meanwhile, before data can be managed, it must be clean. Best-in-class companies are twice as likely as their industry peers to have some form of data cleansing capability enabled (see "BIC Back-End Technology Enablement" at right).

Meanwhile, respondents also exhibit different levels of investment in front-end technologies designed to deliver information to the right people at the right time. Once again, Best-in-Class companies have exhibited specific technology adoption and usage characteristics that distinguish them from their Average and Laggard counterparts. In fact, with one exception, the Best-in-Class are more likely to have made greater investments than their peers across all of the front-end enabling technologies studied.

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BIC Front-end Technology Enablement
The one exception is the use of spreadsheets as a primary BI tool. While use of spreadsheets is still prevalent, particularly within workgroups that are underserved or inappropriately provisioned with access to BI capabilities, Best-in-Class companies are 17% less likely to allow this approach. Moreover, Best-in-Class companies are more than twice as likely to implement operational-BI reporting and analytics solutions that address day-to-day business activities and transactions rather than taking a high-level, trending view over large expanses of time (months/quarters/years) (see "BIC Front-End Technology Enablement" at right). Technology Licensing and Deployment. The approach to licensing BI software does not necessarily become a question of which path leads to Best-in-Class performance. While traditional "per-seat" user licensing is still the most dominant style of licensing in use, other approaches are rapidly beginning to encroach. Foremost among these is Server-based licensing, followed by Concurrent user licensing. Interviews with respondents reveal that concurrent licensing is the most desired, but unfortunately is not offered by all solution providers. Best-in-Class companies are more than twice as likely as all others to license BI in this fashion, which suggests they have likely made this an important item on their buying criteria wish list.

Open source licensing is also seeing increased interest. While it remains at a lower adoption level than other more traditional licensing approaches, Best-in-Class firms are also more than twice as likely to be adopting open-source BI solutions as their counterparts. The most prominent finding here is that Best-in-Class companies are far more likely to be using open source software across the entire range of BI capabilities, and are particularly more likely to be utilizing open source data cleansing tools. Meanwhile, Average performers are investing resources more heavily toward the development of open source reporting tools and are slightly more apt to be developing open source dashboard solutions.

Until recently, open source options have not been abundant across the spectrum of BI capabilities. Best-in-Class companies are far more likely to be early adopters of new open source offerings and are twice as likely to be developing full analytic applications with open source tool sets. Open source has traditionally been considered a "build-it" approach rather than a "buy-it" approach, characterized by tool kits that developers use to produce reporting and analysis applications. Increasingly, open source solution providers are offering capabilities with far more end-user interface controls and wizards, and are also beginning to offer "in the cloud" services or platforms from which BI solutions can be built.

Finally, deployment options are also factoring in heavily when it comes to managing the total cost of ownership of a BI implementation. In this instance "Deployment" refers to the methods that BI technologies are made available to customers and users. For the first time in 22 research studies conducted by Aberdeen's Business Intelligence research practice, the Best-in-Class use of traditional on-premise deployment is now lower than that of all other respondents. Best-in-Class performers are now turning to alternative deployment options, including a tendency to opt for SaaS BI deployment at twice the rate of all others, and higher adoption of both Hybrid and Appliance approaches as well.

Why is this important? As companies have matured with their BI implementations (Best-in-Class companies are far more likely to have been implementing BI for four years or longer), they have found that the skill sets required to manage, maintain and support the solutions are in short supply, and the associated direct and indirect costs are high. The growing trend toward managed services is being driven by these factors and has resulted in a slow retreat from traditional on-premise deployment.

In addition to these deployment styles, there is one other method that deserves to be called-out in relation to the findings of this study. Respondents have clearly indicated that they expect their enterprise application solution provider to deliver BI capabilities, and increasingly, Aberdeen research is finding that this is the case. The delivery of BI capabilities within enterprise applications leads to a greater pervasiveness of BI within the organization. It also supports faster deployment as, typically, the data integration issues are tied only to the source data within the enterprise application itself. Also, users accustomed to the application interface are less likely to be jarred by the introduction of a new BI application with a different look and feel.

Performance Management. Finally, all of the capabilities and technologies discussed above are not going to produce value unless the results are measurable. Top-performing companies are significantly more likely than Average companies to track the costs associated with BI implementations. In order to achieve top performance when it comes to completing BI projects on-time and on-budget, the execution of these activities must be visible to decision makers. Best-in-Class companies are more likely to measure their abilities than are Average and Laggard firms.

REQUIRED ACTIONS

Whether a company is trying to move its total cost of ownership management from Laggard to Industry Average or from Industry Average to Best-in-Class performance, the research points to the following actions to help spur improvement:

  • Make an investment in back-end data integration and data cleansing technologies and corresponding skills,
  • Dedicate time and FTEs to defining user requirements and then match BI tools with end-user skill sets,
  • Investigate new licensing and deployment options including concurrent user licensing, open source software, SaaS and hybrid approaches.

Aberdeen's full, 28-page "Managing the Total Cost of Ownership of Business Intelligence" report offers seven detailed "steps to success" for Laggard, Average and Best-in-Class firms. The report also includes more than 15 charts and tables with in-depth findings not included in this executive summary article. To download the full report at no charge, click here (registration required).

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