Imagine a top-brand company dropping the price of its high-end product to one fourth its original price. What thoughts would come into your mind? Will it be reliable? Will it last long? Will it have all the required features? Will it meet all my needs? Because it’s cheap, will it be of inferior quality? The answer is a big no. A few years back, cheap meant bad. Any product that was sold cheap would be considered of low quality. For example, it was awkward to tell your colleagues that you are wearing a cheap shirt as it meant you couldn't pay for a better brand. Things are different now. For some it may seem cheap, but for others, it's just the right price. Could you resist buying a brand new car for just $2,500?
Recently Tata Motors, an Indian based auto company, launched the world’s cheapest car called Nano. The car is a four-door, five-seat hatch, powered by a 30 HP Bosch 624 cc four stroke engine. The Nano is capable of 65 miles an hour. There is a small trunk, big enough for a duffel bag. The Nano, which cost just $2,500, will change the face of not only the Indian car market, but the global auto industry. It is the best example for other industries like IT at a critical time when worldwide they are straining all effort to come with different ways to stay competitive in declining market conditions. This is a very interesting innovation that has taken place. These other industries need to see from this how they can give the best value to their customers at an unbelievable price. There is slowdown in the U.S. economy after years of exhilarating growth. The IT industry is facing the scene of a slowdown due to U.S. economic worries triggered by the subprime mortgage crisis. In such a tight economy, it is very crucial to innovate different ways to stay competitive. The IT industry needs to provide their customers a dream-come-true experience, like the Tata Nano has given to their customers. They need to create more opportunities that their customers can afford in this weak market condition. The IT industry has to thrive to deliver the best value at low cost if they want to survive in this economy. What is this magic that could bring down the cost of BI solutions drastically without compromising on the quality? We will see in this article the levers that Tata used to reduce the cost of its car. We will compare those levers with possible levers in business intelligence implementations for cost reduction.
State-of-the-Art Design: The Secret Lever
The fact that Nano is the cheapest car ever made does not mean that it is either low quality or a knock-off copy of some high-quality variant. The cost-effectiveness and quality have been achieved by understanding the specific critical customer need in that segment and creating the design accordingly. It is providing what the customer wants by first eliminating what is not required. Similarly offering a low-cost BI solution does not mean inferior quality architecture equipped with only the basic components. It does not mean that such implementations would be supported by less experienced or graduates fresh out of college. What will deliver such efficient low-cost BI solutions are inexpensive technical solutions produced using state-of-the-art design and components. The design would be sleek and will map to exact customer needs. Low costs in BI could be engineered by designing the slimmed-down version of information needs within the organization. It will be achieved by efficiently leveraging existing infrastructure components, resources, technology, processes and innovative designs. It is about designing your BI solution based only on the prioritization of the key user needs of your enterprise. These basic needs have to then be converted into critical success factors by management buy in.
Data Management: The Central Lever of Cost Reduction
When we talk about BI, it’s all about data and how to transform it into information, and this in turn would help to make better business decisions. BI systems are like the eyes of an organization that help them to see things around before taking any step rather than taking decisions blindly. If you walk down the aisle of any organization, you would always hear employees unhappy as they find is difficult to get the right data to make their business decisions. At the same time, if they get the data, they are not very confident if it is accurate. It is very interesting to see how most organizations get into this kind of situation. The root cause of this problem is lack of data management and data governance in most organizations. A Forrester consulting survey of 407 senior IT decision-makers at companies with more than $250 million in annual revenues found that manual efforts remain the dominant approach for integration of data silos.1 Due to this, there is a huge unmanaged accumulation of data over a period of time. Multiple versions of the same data get created from different sources. After that, there is a big confusion as to which is the most accurate data. This leads to data quality issues which at times run out of control. On average, if you are looking for particular information within an organization, you are bound to find at least four to five instances from where you can obtain the same information. Almost 90 percent of the time you will find that there are data discrepancies in all the four to five instances of the same data. It is very important for most organization to get rid of unwanted data and at the same time move less critical data to low-tier storage. The very first thing organizations need to do is to lose weight by rationalizing their data and eliminate redundancies created by unwanted data. This is very similar to Tata Nano’s central approach for its car. It has kept the base minimum that would be required for its customer to make a comfortable ride. This not only reduces the cars cost but also improves miles per gallons.
