The boom in business intelligence (BI) deployments is fostering the classic debate in both business and information technology (IT) circles: Which is the best route to take, build or buy? Newly available research from The Data Warehousing Institute (TDWI) indicates that a happy medium may be achieved by choosing both options. "The Rise of Analytic Applications: Build or Buy?" scrutinizes all aspects of the "buy vs. build" debate and points to the emergence of a new BI market segment, analytical development platforms, as a bridge to help enterprises exploit the most flexibility, functionality and economies of scale from both customized and packaged BI applications.

Analytic applications enable business users to access, analyze and act on information relevant to business processes they participate in or manage. According to IDC, the market for analytic applications is expected to reach $6 billion by 2005.

The report draws on a comprehensive survey of 578 current users of analytical applications and interviews of industry experts. "There is a lot of talk about analytic applications, but not a lot of clarity about what they are, what value they provide and how best to deliver them," said Wayne W. Eckerson, director of education and research for TDWI. "The report hopefully will clear up this confusion."

Greater Strategic Value and Functionality Key "Build" Advantages

Due to customization, companies choosing to build analytical applications usually achieve a higher level of functionality and the applications tend to deliver more strategic value to their organizations. In many instances, there simply are no applicable packages available and two-thirds of respondents build to get the functionality they need. Most companies with built analytic applications use a combination of analytic tools and hand-written code. Forty- seven percent of organizations surveyed or interviewed with analytic tools indicated that at least 50 percent or more of their analytic applications were coded.

Most frequently mentioned drawbacks to building analytic applications were time (58 percent), managing expectations (53 percent) and project scope (51 percent). For these reasons, building completely customized analytic applications challenges resources. "When anything is possible through customization, users request more personalized features and can increase the project's scope, affecting the project time and budget," says Eckerson.

Buying Can Take Just as Long to Implement, But It's Still a New Market

The primary reason for buying packaged analytical applications is speed, but in practice implementing the package takes almost as long as building. Survey results indicated that the average deployment time was 8.3 months for bought applications and 9.1 months for built applications. Eckerson contributes at least a month of the bought applications' deployment time to disparities in data models; thus organizations must often build or retool a data warehouse when deploying a package for the first time. Another major deterrent to buying is price: cost of entry for most analytical packages can begin at the hundreds of thousands and can reach into the several millions. However, packages are a newer entity than built analytic applications. This is reflected in the higher percent of "unsure" answers in the buying respondents. These individuals may not have been through a full maintenance cycle upon completion of the survey.

Analytic Development Platforms: The Bridge Between Buy and Build

A new breed of analytic applications, analytic development platforms, is emerging to help companies capitalize on the best attributes of customized and packaged applications. These enable developers to build custom analytic applications using predefined components, services and/or starter kits in a graphical environment that minimizes coding and facilitates rapid prototyping and deployment. As Eckerson states, "Ultimately, analytic packages and analytic development platforms will converge, giving users the best of both worlds. The `build versus buy' debate will eventually mutate into a `buy and build' fiesta."

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