Evaluating Packaged BI Solutions

Radha R would like to thank Krishnan Raman, a program director with the business intelligence practice at MindTree Consulting, for contributing this month’s column.

A decade ago not many people would have considered it worthwhile to discuss packaged business intelligence (BI) solutions. A large majority of the BI solutions, if not all, were custom implementations tailored specifically to meet the needs of the organization. A lot of things have changed in the last ten years and packaged BI solutions have shot into prominence.

Speed seems to be of primary importance in today’s world and packaged BI solutions are found to satiate this need for rapid implementations. In addition, more often than not, buying a vendor-supported software package is found to have a lower total cost of ownership (TCO). Because of this, whenever there are viable buy options, the build versus buy decision is becoming an important consideration in an IT systems project. The conventional wisdom that buying has a lower TCO than building is, however, based on the presumption that the purchased solution meets business needs of today and the foreseeable future. If it doesn't, the cost to customize prebuilt software, or worse still, the costs of changing your business to fit the software can seriously impact the supposedly lower TCO.

A few other critical drivers apart from accelerated implementation and lower TCO proponents of the buy option highlight in include:

Adaptability to changes in the environment. Bought-out applications typically have additional functionality that goes beyond meeting current needs of the business and can be leveraged to meet the emerging needs as, and when, the business grows or adopts fresh business models radically different from the existing models. For example, take the case of a consumer durable goods manufacturer adopting a direct Internet-based channel for distribution of its goods instead of the existing intermediary assisted distribution channel. Information needs from the new channel will be fundamentally different, and if a custom solution has to scale to meet the new needs, it will require some serious engineering. If a packaged application has been used that supports alternate channel options, it might be relatively easier to cater to the information needs. Thus, packaged options, if rightly chosen, provide insurance to environmental business model changes.
Inherent standardization potential. The overarching drive to adapt to the package with minimal customization, inherently acts as a governing mechanism to drive towards standardization. This steers the organization towards standardization across the organization. Packaged BI solutions often include prepackaged business content that acts as a guiding star for the definition of critical measures and dimensions. In the absence of a dire business need, these get adopted in the organization, driving standardized metadata definitions within the organization.
Best Practices. Most of the packaged BI solutions have industry benchmarked best practice key performance indicators (KPIs), predefined reports and dashboards addressing critical business scenarios and alignment with industry standards that help organizations align themselves to better business practices and improve process efficiencies.

Considering the compelling business proposition and the rapidly maturing packaged BI solutions, it is increasingly likely to face a situation where one has to evaluate such a solution for the BI needs. A myriad of questions will cross the mind on how to make that critical decision.

How does one decide between the plethora of prepackaged BI solutions available?
What are the key considerations/questions one must ask?
What are the answers that help a decision maker identify the right prepackaged BI platform?
What are the trade offs that can be made while picking up a prepackaged BI platform?

There are many aspects to be considered when evaluating a package, including vendor stability, customer success stories, technical standards (specifically openness of the these standards and usage of newer technology), time and effort (a commercial comparison based on TCO). However, as suggested earlier, the tipping point for a buy decision is the fact that buying has a lower TCO than building based on the assumption that the purchased solution meets business needs and is the single biggest factor.

For the purpose of this discussion, I will limit myself to the most crucial evaluation dimensions for prepackaged BI solutions. Tackling the question, “How well suited is the prepackaged BI solution for my industry?” I find it useful to consider the five dimensions highlighted in Figure 1.