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Originally published January 20, 2009
This is an interesting time for business intelligence (BI) technology. Consolidation in the industry continues causing customers to wonder what new ownership of their BI technology will mean for them. New business intelligence players continue to emerge even though consolidation is often an indicator that a market has matured. But what I see most inside of companies using business intelligence is an interest in what I call “low-cost” BI, business intelligence that is cheaper, faster and less difficult than the traditional or market-leading BI technologies.
The idea of lowering BI costs is attractive, and every organization should look at ways of lowering these costs. However, too often the assessment of low cost is based on the acquisition cost of the technology rather than considering the total cost of ownership – the costs associated with using and maintaining the technology – which can undermine the objective of reducing BI costs. The strategic way to think about this is to consider the costs associated with the people and processes as well as the technology.
Let’s begin by looking at a few (this is not meant to be an inclusive list) of the low-cost BI technologies. Some examples are:
Low-cost business intelligence is here to stay and hopefully will drive down the prices of the leading BI suites. In the meantime, are these technologies really low cost?
It is clear that the cost of these technologies is less than that of market leading BI technologies. However, there are three key aspects that are important to consider in evaluating any technology:
What technology capabilities are important for you? A technology becomes a market leader by offering a long list of technical capabilities to meet the needs of a widely diverse customer base. The low cost technologies may not have all the technical features of a market leading product; but if one of these has the features you need, then you’re buying just what you need and not paying for features you won’t use.
What skills and competencies does the technology require? This is more than those needed to make use of the tool. It includes skills and competencies necessary to manage the technology and the work product created with it. For example, many low-cost ETL tools provide graphic mapping capabilities for extracting, transforming and loading data, just like the leading ETL tools. However, they tend to lack multi-developer management, version controls for iterative development or enhancements, impact or data lineage analysis, and other capabilities that are important to consider. Similarly, reporting and OLAP capabilities for data security, user management and data delivery are important and must be assessed. These are not reasons to avoid low-cost BI; rather, they require the people and processes needed to provide these capabilities to be evaluated. For the most part, the people and processes affected are in IT, so it is critical that the necessary support for using the technology going forward from its initial implementation is thought through and made a part of the total cost of ownership. For some organizations, low-cost business intelligence will be the answer. For others, it won’t.
Will the technology be where you need it to be in the future? One of the challenges with low-cost business intelligence is that its market drivers are different. Market leaders compete on their technical capability, which causes them to consciously focus on expanding the robustness of their offerings. In my discussions with low cost BI vendors, I have found that capabilities essential in significant BI installations “are being worked on” and will be a part of “an upcoming release.” Well, time has passed, and they have not been included in upcoming releases. When cost is the selling point, development or additional features is not always a high priority, a point I have emphasized with Gartner Research in their Magic Quadrant evaluations of BI vendors. With any technology, but especially with low cost vendors, it is safest to assume that the product you buy is the one you will live with. Consider any new features as icing on the cake.
What is the bottom line? Low-cost business intelligence is attractive and an important element in the market. As I said earlier, an outcome I look forward to is lower prices across the board for all BI technology. In the meantime, it is important to make sure that business needs are met, responsiveness to changing business needs is planned for, and BI is developed into a successful tool for enhancing the business.
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