Pay as You Go: SaaS Business Intelligence and Data Management

Originally published May 20, 2009

It seems you can’t pick up an IT magazine, read a technical or business blog or attend a business intelligence (BI) conference without hearing about software as a service (SaaS) and the new model of software delivery. SaaS was used initially by small to medium businesses, but it is now being adopted more and more by large multinational corporations. Today we have a plethora of examples of SaaS companies serving all sizes of businesses.  Each has focused on helping their subscribers transform the way they do business, changing the way they bought or sold items, and giving them alternatives to standard in-house IT environments.

We define SaaS as:

“A software delivery model where a vendor hosts, operates and manages a software service for use by its clients on a paid subscription basis. SaaS can be used to support operational, BI and collaborative processing for use over the Internet or, in some cases, an extranet.”

This article is an excerpt from our research paper on SaaS business intelligence entitled “Pay as You Go: SaaS Business Intelligence and Data Management.” This research was sponsored by five vendors who provide SaaS BI and data management solutions. Following are short synopses of the case studies. Longer, more detailed versions can be found in the full report that will be available later this month on the BeyeNETWORK's research site, BeyeRESEARCH.

eSupply Systems (Solution provided by Blink Logic)

In today’s economy, more and more people are renting their homes rather than buying them, and turnover can be high. When an apartment becomes available, property management companies must respond quickly and cost-effectively to make the rental property suitable for the next tenant. In addition, these companies must clean the hallways, gardens, pools and other general areas on an ongoing basis. Indeed MRO (maintenance, repair and operations) activities comprise a multibillion dollar industry.

Unfortunately, this process can be fraught with miscalculated charges for supplies and services. Additionally, it is often difficult to appropriately allocate the costs of the maintenance for a particular apartment if more than one is being prepared for re-rental. Helping these companies determine whether a property’s maintenance is being performed appropriately is the mission of eSupply Systems.

eSupply Systems provides web-based maintenance supply chain support through a cost-effective ecommerce platform using a SaaS-based BI offering from Blink Logic to give property managers actionable information on their maintenance activities. The analytical system provides large residential management companies the ability to:
  • Analyze their overall spending

  • Compare property-to-property expenses to better understand where efficiencies could be made

  • Find out who was spending too much or too little

  • Determine trends of spending by particular geographic areas

  • Estimate what the costs should be for a prospective property
eSupply Systems has certainly seen great value in their SaaS-based MRO offering and specifically the analytics and reporting provided by Blink Logic’s BI solution. Not only did it take minimal effort and time, but also the easy and accessible nature of the web-based application is very appealing to their less technologically savvy property management customers.

Red Roof Inns (Solution provided by Host Analytics)

In 1973, Red Roof opened its first inn in the company’s headquarters of Columbus, Ohio. Over the years, the company has grown significantly to 345 hotels in 39 states serving millions of guests each year.  Throughout its growth, the management team has remained focused on ensuring the company’s leadership position in its market. That focus has accelerated in the current economic downturn.

In September 2007, Red Roof began the process of separating from its former parent organization, Accor North America. A budgeting application was needed by each business unit in the company; but, unfortunately, one was not included in the transfer of technology. This did not stop the need for budgets to be developed for 2009. This meant that the corporate office had to come up with its own from scratch and in a very short amount of time – without IT help! It fell to the finance department to create the budgeting application in only a matter of a few months. They turned toHost Analytics and its SaaS corporate performance management (CPM) solution.

Data is loaded monthly into the CPM system from an Oracle financial system, the company’s budgets and forecasts are then updated, and the results sent back to the Oracle system. Significant validation and restructuring of the original parent company data was required, and the support and help from Host Analytics was invaluable.

There were several advantages that contributed to the success of the solution:
  • Business users found the MS Excel-like interface easy to use and quick to learn

  • Host Analytics’ CPM solution comes with prebuilt solution templates

  • Red Roof employees can also create their own specialized templates

  • The ability to quickly estimate every expense and revenue for every property

  • Host Analytics resources met every deadline and made customizations quickly at no additional costs
Red Roof’s financial department has managed to implement a sophisticated budgeting solution quickly and efficiently by choosing the Host Analytics SaaS offering. Ease of use, flexibility, no maintenance or upgrade activities, Excel-like capabilities via a web-based interface and a customer-focused vendor are just a few of the characteristics that made for a successful project and happy customer.

Segmetrix (Solution provided by Kognitio)

Segmetrix is a business consultancy that turns complex data into true intelligence through their product, Match2Lists. The company provides an integrated analytical, data management and planning solution that gives its customers (large corporations in the business-to-business [B2B] space) a real competitive advantage. Its solutions capture large volumes of customer and financial data, available from both internal and external sources, and transforms it through sophisticated algorithms into execution-ready information. Segmetrix clients then use this information to improve their B2B sales, marketing and financial operations.

Segmetrix’ strategists and technical personnel also perform their own analytics on the data to improve the financial results and marketing behaviors of their clients. They help customers apply and utilize business intelligence in their business context rather than simply implementing the BI environment for the clients and leaving. Segmetrix’ expertise in best practices and data-driven execution helps clients to develop, implement and monitor integrated sales and marketing strategies.

Segmetrix turned to Kognitio to provide an integrated analytical, data management and planning data warehouse as a service (DaaS) infrastructure using WX2 RDBMS to store integrated, easily accessible data. The data is trickle fed into the data warehouse in mini-batches, thus providing low latency data for analyses. Now their clients receive the data, visual analytics, insights, and strategic and execution plans. These clients can determine:
  • How well they are performing within the context of their markets

  • Potential opportunities available to them

  • Where and when they need to spend resources for marketing and sales activities

  • Companies they should acquire

  • Customers they should up-sell and with what products

  • Marketing campaigns that are working and sales structures that have missed their targets

  • Compensation plans that have worked
Segmetrix has learned that by using Kognitio’s DaaS solution it is free to focus on its true core competency: providing sophisticated analytics, insights and guidance to its B2B clients. Having a predictable environment that is easy to use, is cost-effective, returns results rapidly and is simple to scale up or down means it has a significant competitive advantage over other consultancies offering similar solutions through more traditional means.

Distribution Market Advantage (Solution provided by PivotLink)

How do hospitals, schools, and large restaurant and hotel chains get food service items to their individual facilities in a timely manner? Usually it is done through a sophisticated network of distributors like Distribution Market Advantage, Inc. (DMA).  DMA is a national food service distribution company that delivers supply chain solutions for well-known multiunit restaurant and institutional customers. The company is a cooperative whose owners consist of several regional distributors. DMA needed a system to streamline the process of getting products from the manufacturers to its distributor facilities and, ultimately, to its customers’ locations.

DMA’s technology platform, e-Advantage provides food service operators with industry-leading order entry, data analytics, inventory visibility and price verification tools. The company needed to add a BI capability to the e-Advantage system to improve reporting to its clients. They had significant supply chain management expertise, but limited knowledge of business intelligence so they selected PivotLink’s SaaS BI system to complement their data warehouse (built by another SaaS vendor). PivotLink provided a pure-web based solution (with no plug-ins or downloaded controls) that could be branded with DMA’s own logos

Now, DMA’s clients can access data from the low-level transaction detail to high-level aggregates. The application supplies reports that are universally utilized by everyone, but each customer also has the ability to develop their own customized reports. Through the solution, they can:
  • Change fields to fit their vocabulary

  • Create aggregated reports

  • Add new parameters

  • Create specific customer folders to house these customized reports
PivotLink satisfies the more technical users as well by offering complex features that allow them to perform complicated analytics. Within PivotLink, DMA sets up customized reports to be automatically delivered via email in a variety of output formats specifically for users who might be intimidated by the application.

Like any business with low margins, the ability to control costs is critical. DMA has managed this by giving its distributors and customers invaluable insight into overall supply chain management. The tangible and intangible benefits from these insights have been significant and have increased everyone’s satisfaction with DMA.

RapidAdvance (Solution provided by SAP BusinessObjects)

In today’s economic crunch, staying in business means you must have access to money; but with credit getting tighter, many companies are finding the availability of cash scarce. Where can they get money to buy new inventory, invest in new equipment, bolster them for a seasonal trend, pay off a short-term debt, deal with emergency funding or any of myriad other cash needs?

Enter RapidAdvance. The company provides business capital in the form of an unsecured cash advance for any business need, allowing its customers to expand their businesses. The company operates as a specialty finance business for small to mid-sized businesses that use credit cards in their business. Their customers simply pay the cash advance back through a percentage of their future credit card sales.

Due to the nature of their cash advance requirements, RapidAdvance must understand its customers in a timely manner to determine which companies are suitable for these advances. Unfortunately they had silos of information, data quality concerns and limited analytical information through the usage of Microsoft Excel spreadsheets and manual reporting. RapidAdvance needed to create a scalable and automated reporting solution in seven weeks but with limited IT resources. To do this, they chose SAP BusinessObjects crystalreports.com SaaS solution that was used in conjunction with RapidAdvance’s existing Salesforce.com SaaS deployment.

The implementation team (only three people) was able to immediately recreate dozens of the manually maintained reports in the crystalreports.com application without the assistance of additional staff or IT support. Everything was pushed to the web for access; and once a report was created, it was automated and distributed to the appropriate employees.

The team has expanded upon this beginning with substantially more reports, an enhanced layer of security, the addition of more internal and external users, the creation of more complex analyses and all of the company’s deal pricing models. RapidAdvance now has close to 1,000 reports used both internally or externally. All reports are automatically delivered via the web to employees, partners, etc. And these are still being produced and maintained by the original small team.

RapidAdvance has leveraged these reports to improve its overall business by:
  • Reporting on deal and underwriting statuses to its external partners

  • Providing commission reporting

  • Analyzing portfolios

  • Generating internal management reports for in-house usage

  • Generating account status and risk levels

  • Creating virtual due diligence reports for investors to review on site
RapidAdvance has implemented a sophisticated reporting and analytical environment for its executives, employees and partners. The short implementation time, cost-effective nature of SaaS solutions, flexibility in the creation of reports and analytics, and crystalreports.com’s ability to expand as the company does were decisive to the overall success of this solution. With crystalreports.com in place, RapidAdvance can now focus on running a profitable and growing business.

Summary

The case studies gave us great insight into the need for and benefits from SaaS implementations in the business intelligence area. We discovered two predominant uses for SaaS: business-specific BI applications focusing at present on customer-facing solutions and larger scale data warehousing and BI projects.

We also gathered fascinating information from a survey we ran. From it, we found that nearly 60% of the respondents were either already using or planning to use SaaS BI and data management solutions. They cited the low cost of the solutions and their faster implementation times as the top two reasons for choosing these solutions. Almost as popular was the business focus, not IT focus, of these solutions and their easy maintenance. Our survey uncovered concerns about SaaS implementations as well with the need to understand the SaaS approach, integration with existing IT systems and security concerns leading the way.

Finally, from our case studies as well as from the SaaS vendors themselves, we discovered significant information regarding the relationship and level of involvement between the two parties.  It is important for SaaS customers to remain involved with the future of the SaaS company in terms of giving direction to the technological road map, providing input into trouble areas, and demonstrating new ways for using the application’s features and functions. In return, the vendors should supply their customers with input into the technological directions of the company as well – that is to their benefit as much as it is to their customers.

  • Claudia ImhoffClaudia Imhoff
    A thought leader, visionary, and practitioner, Claudia Imhoff, Ph.D., is an internationally recognized expert on analytics, business intelligence, and the architectures to support these initiatives. Dr. Imhoff has co-authored five books on these subjects and writes articles (totaling more than 150) for technical and business magazines.

    She is also the Founder of the Boulder BI Brain Trust, a consortium of independent analysts and consultants (www.BBBT.us). You can follow them on Twitter at #BBBT

    Editor's Note:
    More articles and resources are available in Claudia's BeyeNETWORK Expert Channel. Be sure to visit today!

     

  • Colin WhiteColin White

    Colin White is the founder of BI Research and president of DataBase Associates Inc. As an analyst, educator and writer, he is well known for his in-depth knowledge of data management, information integration, and business intelligence technologies and how they can be used for building the smart and agile business. With many years of IT experience, he has consulted for dozens of companies throughout the world and is a frequent speaker at leading IT events. Colin has written numerous articles and papers on deploying new and evolving information technologies for business benefit and is a regular contributor to several leading print- and web-based industry journals. For ten years he was the conference chair of the Shared Insights Portals, Content Management, and Collaboration conference. He was also the conference director of the DB/EXPO trade show and conference.

    Editor's Note: More articles and resources are available in Colin's BeyeNETWORK Expert Channel. Be sure to visit today!

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Posted June 11, 2009 by adam gelles agelles@theammgroup.com

Great Overview of the SAAS BI business. I think there is one more layer missed here which is SAAS BI as organized by business functions (e.g., finance, hr, operations, marketing, sales, etc.).  What we are seeing is this the key future of SAAS BI companies as it allows Business Decision Makers have access to tools that normally take 6-12 months to ramp in a short cycle and can quickly impact a companies top or bottom line.

In our case, for example - we focus on the marketing function, we see our customer base optimizing their marketing performance by 5-10% which is material given they are spending $100s of millions on marketing activities.

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