Elana Roth This is a summary article. Read the complete company’s BI budget guide here.
Every year when budget time rolls around, many organizations find themselves asking the same question: “what are we going to do about our data?” Organizing scattered and large data sets is one of the top business challenges that companies face, but one that many regularly put off.
With each passing year, the challenge of analyzing large, growing data sets becomes increasingly urgent. Additionally, the amount of data which organizations are collecting is growing at breakneck speed, with more data created in the past two years than in the entire previous history of the human race. Yet with this surge in data, many organizations are either not able to draw insights from their data, or are not able to do so quickly enough. It is estimated that of all data collected, only 0.5% is actually analyzed and used.
The problem becomes this: while businesses have become masters at collecting data, investing in the proper business intelligence and data analytics solution to make meaning of all the data is often put on the back-burner. Why? Usually, it’s as simple as trying to fit BI into an approved budget.
The good news is that you can stop procrastinating and start doing: We have teamed up with VentureBeat to create the decisive guide on how to build business intelligence into your company’s budget, which serves as a springboard for businesses eager to face data challenges head-on and make some major waves.
The 4 Signs That It’s Time to Invest in a BI Solution
Can you manage without business intelligence just a little longer? Is this the year to invest in a dedicated BI solution or can you put it off for another year? Though this question is often asked by companies who are on the fence about a BI investment, after some honest “self-reflection”, their need for a data analytics tool becomes even more glaring. Here are the most common indicators companies see (and struggle with) before establishing a need for an investment in BI.
The 4 signs include:
- Reporting is done manually in Excel and is time consuming
- Difficulty pulling and joining data from multiple data sources
- Inability to access and utilize the data collected to see insights
- Need for data visualization in real-time
There aren’t many sophisticated businesses today that don’t need business intelligence to understand their data and gain a competitive edge. Who is still using Excel to crunch their large, scattered and unstructured data sets? So 2005. No one has a week to kill making data speak the same language. Now there is always data to be had that can offer an eye-opening look at your company’s performance.
Outline Your BI Project to Form a Budget
The more time you spend on assessing your project needs up front, the less time you’ll waste stressing if your project will be in the budget. Ask very specific questions like: How quickly do you need the project completed? Do you want every department to have access to BI and dashboards? Should clients also have access to your generated reports? The breadth of your BI project will most likely reflect your needs and help to determine a budget.
Decide on Project Roll-Out
There’s more than one way to approach a BI roll-out and employee/company involvement, and each of the different alternatives will incur separate costs and require different services. Make sure to identify which approach your company wants to take and then create a short list of BI vendors based on that decision. Here are some of the most common ways companies go about it:
- The Phase Approach: BI systems are launched within your company, department by department until the entire company has access. This may extend to client access as well.
- Company-wide: Your company is in dire need of BI and wants to implement an effective BI solution for the entire company.
- Executive Dashboards: The BI project is limited to those at the C-level to offer a real-time and big-picture look at how the company is performing.
- OEM, Embedding and White-labeling: BI is added to a current software choice within your company as embedded analytics to expand functionality.
Consider Both Present & Future Needs
It’s essential that the scope of your BI project be broad enough to help you fully achieve all of your goals — both present and future. The scope should offer real solutions that can “adapt” to your current business need which includes considerations like:
- Data size, complexity (structured or unstructured) and location (multiple sources)
- The number of people running simultaneous queries
- The number of licenses
- Usability and level of ease of software (for business users or IT needed)
Scalability and flexibility of software determines the longevity of the software. Opt for a scope that is too narrow, and you could see your BI strategy hit a roadblock in just a few years (or even months) as data size and sources grow, and your company requirements change. Start out by considering how much data you’ll have in the next 3 years. Remember, scalable is better.
What Can You Expect to Pay for a BI Solution?
It’s important to understand that when it comes to BI solutions, the sticker price you’ve been quoted is not necessarily the final price you can expect to pay (commonly referred to as the total cost of ownership, or TCO). Many business intelligence tools today simply do not offer a holistic solution for data preparation, querying and visualization – each of which is a necessary part of data analysis. You may be surprised to discover that a bright, new and shiny looking BI tool is perfect for creating beautiful visual reports, but if you need to use complex data, the accuracy of these reports can no longer be trusted and you will need additional data transformation \ ETL tools, or in severe cases – a data warehouse.
The main takeaway is that not all BI tools are created equal. Software with a lower sticker price may be useful for basic use cases, but you will need to understand how many BI tools you will actually need in order to arrive at a TCO. Identify your needs in advance, to understand whether you need a front-end, full-stack or Single-Stack™ solution.
The Hidden Costs of BI
Do you want to know what the real cost of a business intelligence solution is? In that case, you’ll need to consider not just the software license fees, but also any maintenance fees, hardware costs, and services for implementation. Ideally, the BI vendor you select should be recognized in the industry for providing cost-effective end-to-end BI software that is easy to implement and that offers ready-to-go self-service for business as well as technical users. Any extra costs beyond the software license fees are then minimized. By comparison, a vendor trying to sell cheap licenses, but with multiple paying services to install, configure, commission, test, and finally run its solution, could end up costing you much more.
It is true that the hidden costs of not using BI mount up quickly, with insights missed, delays in decisions, extra effort, and lost profit. But there is no point in jumping out of the frying pan into the fire because of the total price of BI. Dig into the BI solutions that make it into your short list and ask:
- Will you need any additional technical infrastructure, and if so, how much?
- Will you need to pay consultants to help you adapt the BI software to your needs?
- Do you need to hire new staff to run and maintain the software, and help non-technical users?
- How much is the software support and maintenance fees charged by the vendor?
- Will your end-users need training to be able to use the application, and if so, how much?
- Will it be necessary to take existing staff off your current revenue-generating activities, to get the BI software operational?
When you assess the cost of a business intelligence solution, remember also to evaluate the individual cost of business analytics. This cost depends on how quickly you can use the solution to change to new analytics and generate new insights and reports. For instance, a BI application that makes you spend a month each time you want to change your BI can be far more expensive in terms of missed opportunities and user frustration, than a flexible, user-friendly solution that lets you do it in just one day.
The Cost of Cloud BI
When the right business intelligence application is also available as a cloud solution, it can offer you the following advantages in the overall price of BI:
- No need to invest in your own IT servers or additional data center facilities
- The application is immediately available for use with no lead time for ordering, installation, or deployment
- No need to assign or hire your own employees to tend to the application, the vendor’s staff does this for you
- The subscription fee already includes support, maintenance, and upgrades
- You pay for the level of service you need from the cloud, not for unused capacity sitting on your site
The Price of BI and Budgeting Your BI
Read about the costs in our free guide “How to Build BI Into Your 2019 Budget” which outlines:
- 4 direct costs of BI
- 4 hidden costs of BI
- Establishing value before purchase with a POC (proof of concept)
- Launching a POC on your own data in minutes
- Typical BI implementation timeline
- Project roll-out approaches