Organizations that are increasingly investing in Business Intelligence (BI) technologies on their journeys towards data-driven decision-making find themselves facing tool proliferation and increasing costs of ownership, with a feeling of lower overall control. These themes are actively gaining CIO mindshares, and possible solutions are being discussed.
Over the past few years, businesses have invested in a variety of reporting, analytics and visualization tools (henceforth called BI tools in this post, for the sake of brevity) to get better insight about their management, financial, risk and operational reporting. Newer technologies have allowed for rapid development of dashboards and analytics solutions and have promised business the ability to rapidly build and use these solutions with minimal IT involvement.
However, organizations are increasingly finding that there is a proliferation of multiple BI tools within the enterprise. And while business has found it empowering to solve their own problems, it is also often the case that the right BI toolset might not have been applied to the right problem.
Also, the ongoing cost of these technologies is no longer insignificant when considered on an enterprise scale. On the other hand, open source based BI tools have made significant strides in the features they offer.
It is an opportune time for organizations to take inventory of the cost of BI solutions and create a structured tool selection process in this space.
In a series of posts, we discuss how organizations can move from an unstructured BI toolset selection and usage paradigm, to an efficient, focused low-TCO one, without necessarily taking away the independence and agility of the business functions in making these decisions.
The evolution of BI
There was a time when reports meant tables running into pages. No one paid any real attention to 'user experience' and 'insights' were restricted to calculating sums and differences in those tables (and percentages, if you were really lucky!).
And building new reports or making changes to existing ones meant putting requests in the IT department queue..and waiting..
The promise of a new day
The last few years have seen rise of tools that promise to help organizations move away from that IT-led BI paradigm. These tools enable both 'canned' and ad hoc reporting, data analysis through the use of statistics, easy-to-consume views of data and 'visual insights' and ways to access and manipulate data via intuitive front ends.
What's more, these tools provide the business user access to these features for day to day use, with minimal involvement from IT. While some of these tools are of a 'horizontal' nature (i.e., they provide features that each department or function can configure or customize to meet their specific needs), 'vertical' point solutions that serve a specific functional need are also increasingly being purchased (for example, dashboards and reports built specifically for the Marketing team).
Purchase decisions for these tools are also becoming more secular - while IT has a large say in selection and purchase decisions for the 'horizontal' tools, marketing, sales and other functions have started using their budgets to buy specific point solutions to meet their needs.
The technology sprawl
While this approach has enabled business to improve their speed to market, it has also created its own set of challenges.
In some organizations, this approach has led to a proliferation of tools - many with overlapping features.
A senior marketing executive in a large payments company told us how they use analytics technology to monitor their campaigns and other marketing activities. They have deployed a total of 4 different BI tools for this purpose (almost one for each marketing channel). They are now planning to implement yet another tool to collate the results from these other tools, so that they can get a complete view of what (just) the Marketing team does!
Paradoxically, the drive to let business have greater control over their reporting and analytics requirements might have led to reduced organizational control overall on these toolsets.
It is not uncommon today to have a discussion with IT in a medium / large sized organization in which they are not able to comprehensively list down the reporting & analytics tools that are being used in their organization, let alone provide details of who uses what features in them.
Whether the right toolsets are being used to address the problems at hand is also a subject that does not get sufficient talk-time.
Show me the money
In addition to difficulties in keeping track with a continuously rising tool inventory, the cost of maintaining that inventory is also not trivial. While many commercial tool vendors do claim to offer innovative licensing models to meet the specific needs of an organization, the purchasing, maintenance, human and other costs associated with the tools have a way of adding up fast.
"You name it, I am paying for it!" is how one CIO of a large wealth management company put it very succinctly in a conversation with us about the tools being used in his organization.
Interestingly, we have also observed that the buyers, both business as well as IT, might not be fully aware of all the available licensing options for BI technology, and their impact on costs.
It's a revolution!
An open source revolution has been underway for the past few years in the BI (indeed, the broader data management and presentation) space.
This revolution is characterized by low(er) TCO, a set of features that have started approaching those offered by best in class commercial products and very vibrant online communities. And organizations are increasingly awakening to the possibilities of benefiting from what these open source tools offer.
In the open source tool context, we not only include the likes of Jasper and Pentaho, but also technologies like R that were previously considered niche but are now seen as options that can be used to address a broader set of business problems.
For example, R now offers increasingly sophisticated charting capabilities.
No better time than now
Given increasing technology proliferation and rising costs on one side and the opportunities presented by open source technologies on the other, we think it is the right time for organizations to take a holistic look at their current BI technology stack and consider alternative solutions that they might have thought of as infeasible earlier.
In fact, once the move to this alternative paradigm is completed, such analysis should be made an integral part of BI technology selection process in the organization - both for business as well as for IT purchase decisions. This will require increased collaboration between business and IT.
This protocol will help ensure that the BI technology sprawl and associated TCO are being kept in check on an ongoing basis in the enterprise.
The Incedo Rationalization Methodology
We at Incedo have developed a robust methodology which organizations can adopt to address these issues. Our methodology focuses on building a structured data-driven reusable mechanism for BI tool selection, which drives their efficient usage with lowest possible TCO for the organization.
This methodology is discussed in detail in our subsequent posts in this series.
We have been speaking to our clients across multiple industries and also some practitioners in reporting, analytics, visualization and overall data management. During the course of these conversations, we have come across certain considerations and themes that seem to be common across client organizations - themes that are independent of industry, nature of business and also organization size, to some extent.
- FS Solutions Group