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.
Think about your own data stores: You have more data every year, every month, every day than ever before. Analyzing large, growing data sets isn’t just an urgent demand; it’s an emergency! The amount of data 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, less than 1% is actually analyzed and used. Companies are sitting on a data gold mine, and they’re barely scratching the surface of its value!
Your data is a gold mine and you’re barely scratching the surface of its value!
Why? Money. Trying to fit your business intelligence cost into an existing budget is an uphill battle for many organizations.
If you’re fighting that battle at your company, we have some assistance for you! We teamed up with VentureBeat to build the decisive guide on how to build business intelligence into your company’s budget. Once you’ve gotten your business intelligence cost figured out, you’re one step closer to empowering your organization with insights to make smarter, data-driven decisions.
The four signs it’s time to invest in a BI solution
BI is no longer “optional.” Organizations have too much data. It’s coming in from too many sources and stored in too many places. Getting value from that data is the key to surviving and thriving in the future. Here’s a list of some of the most common indicators companies identify (and struggle with) to tell them it’s time to invest 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
Again: business intelligence is no longer optional for understanding data and gaining a competitive edge. No competitive business is still using Excel to crunch large, scattered and unstructured data sets? Those days are over. No employee has a week to kill cleaning up data so it all makes sense together. You need a robust BI solution to simplify the process and serve up insights. Once you’ve figured out your BI software pricing and gotten it into your organization’s budget, you’re that much closer to getting your hands on the analytic tools that will empower your organization to make smarter decisions and draw new revenue from your datasets.
Outline your BI project to form a budget
The more time you spend assessing your project needs up front, the less time you’ll waste stressing over whether or not your project will make it into the actual budget. Ask very specific questions like: How quickly does the project need to be completed? Will every department need access to BI and dashboards? Should external audiences also have access to your generated reports or maybe embedded analytics? The breadth of your BI project will reflect your needs and help determine your budget.
Decide on project rollout
There’s more than one way to approach a BI rollout and employee/company involvement and each of the alternatives incurs unique costs and requires different services. Make sure to identify which approach your company wants to take and then create a shortlist of BI vendors based on your needs. Some common rollout strategies include:
- The phase approach: BI systems are launched department by department until the entire company has access. This can even extend to client access as well.
- Companywide: If time is a factor, an effective BI solution can be rolled out immediately across the entire company.
- Executive dashboards: BI access is limited to the C-level, providing execs with a real-time, big-picture look at company performance.
- OEM, embedding, and white-labeling: Your company’s software choice is enhanced with embedded analytics, expanding functionality, increasing stickiness, and providing new revenue opportunities.
Think long- and short-term
Balancing immediate needs and long-term growth is important when considering the scope of your BI project. It needs to be broad enough to help you fully achieve all your goals right now and lay a solid foundation for future growth. The scope should offer real solutions and have the potential to adapt over time. Some considerations include:
- Data size, complexity (structured or unstructured), and location (multiple sources, cloud, on-prem, or hybrid)
- The number of people running simultaneous queries
- The number of licenses
- Usability of software (for business users or IT needed)
Your software’s scalability and flexibility are a key to its longevity.
Scalability and flexibility of software determine its longevity. Keep your focus too narrow, and you could get stuck with a product that hamstrings your BI strategy, leaving you searching for a new platform in less than a year (or even a few months) and your company requirements change. Start out by considering how much data you’ll have in the next 3 years (spoiler alert: it’ll be a lot). Remember, scalability is key to your survival.
What can you expect to pay for a BI solution?
As you build your budget and consider how much business intelligence cost you can handle, keep this in mind: the sticker price you’re quoted and the long-term cost (often called “Total Cost of Ownership” or TCO) are not the same thing. Many business intelligence tools today simply do not offer a holistic solution for data preparation, querying, and visualization — each a necessary part of data analysis. A bright, shiny BI tool that’s perfect for creating beautiful visual reports might be a dud when it comes to tackling complex data. Or maybe the reports it generates need additional data transformation/ETL tools, necessitating IT assistance every time you want to run a new analysis.
There are a lot of BI tools out there, and a lot have similar features, but they’re not all the same. A budget BI solution with a lower sticker price may be useful for basic use cases, but will it prove robust enough to power your business’s growth? Or will you be shelling out over and over again for add-ons to stay competitive, driving up your 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
Ready to bite the bullet and calculate the real cost of a business intelligence solution? You need to go beyond the software license fees and add any maintenance fees, hardware costs, and charges for implementation services. When choosing a BI vendor, you want a recognized industry leader that provides cost-effective, end-to-end BI software that is easy to implement and that offers ready-to-go self-service for users of all skill levels. This helps reduce extra costs beyond the software license fees. Be wary of vendors peddling cheap initial licenses with additional fees to install, configure, commission, test, and finally run the solution.
The opportunity costs of not using BI also mount up quickly, with insights missed, delays in decisions, extra effort, and lost profit. However, a hasty buying decision that doesn’t take into account the total price of BI could be costly as well. Once you’ve got your BI solutions shortlist picked out, ask yourself:
- 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 nontechnical users?
- How much are the vendor’s software support and maintenance fees?
- Will your end users need training to be able to use the application? If so, how much?
- Will it be necessary to shift existing staff away from revenue-generating activities to get the BI software operational?
When you assess the cost of a business intelligence solution, remember to evaluate the individual cost of business analytics. This cost depends on how quickly you can use the solution to generate new insights and reports. For instance, a BI application that makes you spend a month each time you want to change your analysis can be far more expensive in terms of missed opportunities and user frustration than a flexible, user-friendly solution that lets you do that in just one day.
The cost of cloud BI
The future of data and analytics is in the cloud. When pricing out your new BI solution, it can be useful to see if it’s also available as a cloud solution, which can offer you the following advantages when it comes to the overall price of BI:
- No need to invest in your own IT servers or additional data center facilities
- Application immediately available for use; 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
- Subscription fee already includes support, maintenance, 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
Check out our free guide “How to Build BI Into Your 2021 Budget” and understand:
- The 4 direct costs of BI
- The 4 hidden costs of BI
- How to establish value before purchase with a proof of concept (POC)
- Launching a POC on your own data in minutes
- Typical BI implementation timeline
- Project rollout approaches
Jack Cieslak is a 10-year veteran of the tech world. He’s written for Amazon, CB Insights, and others, on topics ranging from ecommerce and VC investments to crazy product launches and top-secret startup projects.